The operating performance is temporarily under pressure and the profitability is enhanced. 23H1 achieved a revenue of 788 million yuan, down 10.47% from the same period last year, and a net profit of 12 million yuan, an increase of 784.54% over the same period last year. 23Q2 achieved revenue of 395 million yuan, down 18.23% from the same period last year, up 0.37% from the previous year, and the net profit from its mother was 11 million yuan, down 54.86% from the same period last year and up 949.06% from the previous year. The company's 23H1 revenue decline is mainly due to the downturn in the panel industry, reflective materials market competition intensified, light guide materials, reflective materials market revenue fell 49 million yuan, 68 million yuan respectively. 23H1's gross profit margin was 20.25%, an increase of 4.57pcts over the same period last year; the net profit margin was 0.48%, an increase of 1.17pcts over the same period last year. The company actively reduces costs and increases efficiency, promotes the simplification of production processes, optimizes management processes, increases the proportion of products with high gross profit margin, and controls costs.

It is proposed to spin off the business of reflective materials and focus on micro-nano optical technology and products. The revenue of the 23H1 micro / nano optics / reflective materials / equipment / other business is respectively RMB 156max 0.23mm, accounting for 76% of the total revenue, 20% and 3% of the total revenue, respectively. In June 2023, the company announced that it planned to transfer 100% equity of Huarisheng for 550 million yuan. After divesting the business of reflective materials, the company will concentrate resources on developing micro / nano optical technology and products.

Self-developed scanning projection lithography equipment, electroplated copper lithography equipment can be expected in the future. Electroplating copper adopts the cost-reducing technology of non-silverization, and the metal copper is deposited on the surface of the substrate to form copper grid wire by electrolysis, so as to collect the carriers caused by photovoltaic effect. The copper plating scheme can reduce the shading loss of the front of the battery, reduce the resistance loss of the grid line, and improve the efficiency. In the field of photovoltaic copper plating graphic equipment, the company has developed scanning projection lithography equipment, which has the advantage of high speed and low cost, is carrying out related verification work with downstream customers, and has a broad space for growth in the future.

Nano-lithography equipment and nano-imprint equipment have unique advantages to promote the industrialization of waveguide lenses. As one of the few domestic manufacturers with large-format high-precision nano-lithography equipment and high-fidelity nano-imprint equipment, the company has batch production capacity in the field of AR optical waveguide lenses, and is expected to fully benefit from the rapid growth of the AR industry. At the same time, the field of vehicle AR-HUD actively cooperates with the industry giants and has a broad space for growth in the future.

Give "overweight" rating: the revenue from 2023 to 2025 is expected to be 2.464 billion yuan, the net profit is 2.21 million 2.54 billion, and the corresponding PE is 354 million times that of 26-23-16.

Risk tips: downstream demand is lower than expected, product verification, profit and valuation judgment is lower than expected.