Event: according to Dashi's semi-annual report of 2023, the company achieved 1.657 billion yuan in operating income in the first half of the year, up 13.43% from the same period last year; the net profit returned to its mother was 77 million yuan, down 13.49% from the same period last year; and 60 million yuan was deducted from non-net profit, down 19.35% from the same period last year.

Investment increases and gross profit margin fluctuates in the short term. The company's overall gross profit margin in the first half of the year was 25.14%, down 3.54pct from the same period last year. During the reporting period, income from investment and operation projects of smart hospitals with relatively low gross margins in the company's smart space operation services and other businesses increased, while rental income with higher gross margins decreased. Superimposed smart space products and technical services business was affected by rising raw material costs of some hardware products, resulting in short-term fluctuations in the overall gross profit margin. The company continues to invest in research and development, as of June 30, the company actually invested a total of 272 million yuan. With the help of the fixed increase of funds raised, the company's core platform and key systems have been put on the market and verified, and the competitive advantage has been continuously improved. a number of products have been used in Shenzhen Metro Line 14, Jindieyun Building and other projects.

The amount of the project decreased, and the macro-environmental impact continued. As of June 30, the total amount of projects signed and awarded by the company totaled 1.445 billion yuan, down 51.76% from the same period last year. Due to the impact of the macroeconomic environment and market environment, some key tracking projects postponed bidding; 2. In order to promote the healthy development of the company's main business, the company continues to strengthen the screening of intended projects and implement an one-vote veto system for customers with higher payback risk and projects with more stringent payment methods.

Get rid of the predicament and make efforts to innovate the plate business. Under the influence of downstream real estate customers, the company plans to withdraw large amounts of bad debts at the end of 2021 and recover more than 3000 million yuan by the first half of 2023. In recent years, the company has continued to shrink the revenue share of real estate customers, accounting for less than 10% in 2022, and such customers are mainly central state-owned real estate companies. The company continues to focus on development strategy, and further optimize the company's technical solutions, marketing methods, management processes and other aspects of work. At present, the company's product and solution innovation, business development model innovation and management process innovation have achieved remarkable results. In the market segment for enterprise headquarters and park in the first half of 2023, the contract and bid-winning amount of the company's innovative building and park solution projects increased by 94.33% over the same period last year. Those that have won the bid, signed or delivered include the intelligent project of Anxin Financial Building in Shenzhen and the headquarters building project of Shanghai Paineng Energy Technology.

Investment advice: the company basically got rid of the impact of bad debts brought by real estate customers, but due to the impact of the macro environment, the amount of winning projects still declined. The superposition company continues to invest, and the gross profit margin fluctuates in the short term.

We are optimistic that the company will continue to invest in the research and development of core platforms and key systems through fixed growth, strengthen the company's core competitiveness, and make breakthroughs in the innovation sector and other business. We are optimistic about the development of the company and predict that the company will achieve revenue of 4.069 billion yuan, 4.577 billion yuan and 5.072 billion yuan in 2023-2025; net profit of 214 million yuan, 259 million yuan and 302 million yuan; and EPS 0.10,0.12,0.14 cores PE 34X, 28X, 24X, maintaining the "buy" rating.

Risk tips: increased competition in the industry; technology transformation is not as expected; the landing of orders is not as expected; industry policy changes.