2023H1's revenue and profits increased, orders on hand advanced smoothly, and the exhaust gas business grew significantly. 2023H1 achieved operating income of 300 million yuan, + 14.22% compared with the same period last year; realized net profit of 47 million yuan, + 50.16% compared with the same period last year; and realized gross profit / return net profit rate of 34.75% / 15.70%, + 2.73pct/+3.76pct, respectively. From a sub-sector point of view, the business income of low-temperature vacuum dehydration and drying integrated technology and equipment is 113 million yuan, + 10.74% compared with the same period last year, and the income of exhaust gas purification technology and equipment is 87 million yuan, compared with 949600 yuan in the same period in 2022. The sharp increase is mainly due to the smooth implementation of the project on hand under the elimination of unfavorable factors. The operating service income is 82 million yuan,-46.49% compared with the same period last year, which is mainly due to the fact that the old port temporary sludge treatment service project has completed its major performance obligations at the end of 2022.

The implementation of the main business project is smooth, and the industrial field continues to be developed. In the first half of 2023, the company continued to strive for progress in stability, and local projects were successfully implemented. in the field of municipal administration, projects such as Shanghai Zhuyuan Phase IV, Guangzhou Luogang Project and Shenzhen Fuyong all carried out project completion and acceptance. In the industrial field, a number of fine gasification slag dehydration and drying projects undertaken by the company in the coal chemical industry, such as Weihua Group Binzhou, heavy Chemical, Jieneng Company and Zhejiang Petrochemical Company, have been successfully implemented, and the Anhui methanol and coke oven gas comprehensive utilization project is being implemented. Lithium electricity field to undertake ternary cathode material dehydration drying demonstration production project implementation acceptance.

2023H1 has newly signed orders in the fields of coal chemical industry and lithium electricity, which plays a good exemplary role for the company to further expand the industrial special materials separation market.

It is proposed to set up a hydrogen energy business operator in Shanghai to promote the deep coupling of hydrogen storage technology and existing technology.

On July 11, 2023, the company announced that it signed the Supplementary Agreement on Equity Investment Agreement with Platinum Land hydrogen Energy to set up a hydrogen energy business operator in Shanghai in order to further concentrate superior resources and speed up the application of hydrogen storage technology projects. Platinum Luhydrogen is committed to the research and design of safe and efficient hydrogen storage materials and hydrogen storage devices, the development of hydrogen storage equipment operation management system and the application and promotion of hydrogen storage materials, the company plans to deeply couple the safe hydrogen storage technology of platinum hydrogen energy with the company's sludge treatment, waste gas purification, high temperature water source heat pump and other technologies to form a comprehensive utilization and overall solution.

Start a new round of equity incentives to demonstrate the management's confidence in development. On September 12, 2023, the company announced that it intends to grant about 1.8345 million restricted shares to 70 people, accounting for about 1.8% of the company's total share capital at the time of the announcement. The award price is 10 yuan per share. The performance evaluation target value is 2023x2023-20232023-2025, the average growth rate of gross profit is 48%, 56%, and the average growth rate of net profit is 48%, 50%, 54%. Demonstrate the management's confidence and determination to the company's future performance growth.

Profit forecast: maintain the "overweight" rating. From 2023 to 2025, we expect the company to achieve an operating income of 907 million yuan and a net profit of 1.63 million yuan, corresponding to 13.43x/11.34x/9.42x, respectively, with a net profit of 194 million yuan.

Risk tips: domestic and foreign macro-situation changes exceed expectations, technology and product competitiveness are not as expected, order acquisition and business expansion are not as expected, profit forecasting and valuation models are not as expected.