Event: the company releases three quarterly reports in 2023

In the first three quarters of 23, the company realized operating income of 1.52 billion yuan, an increase of 4%, a net profit of 61 million yuan, a decrease of 4%, and a non-net profit of 48 million yuan, a decrease of 21.6%. 23Q3 realized operating income of 461 million yuan, down 38.2%, net profit of 11 million yuan, down 77.5%, and deducting non-net profit of 11 million yuan, down 77%. The decrease in 23Q3 revenue is caused by the divestiture of the oil drilling and production business and the backward recognition rhythm of the revenue of lithium power equipment, and the profit reduction is due to the loss of the oil drilling and production business and the impairment of assets taking into account inventory decline in the same period.

Stripping inefficient assets to accelerate the transformation of lithium high-end equipment, electrolytic foil equipment + consumables order support certainty is still strong 1) peel off traditional inefficient assets, accelerate the transformation of electrolytic copper foil equipment. On October 12, the company plans to sell 100% equity of Suzhou Dawson drilling and Mining equipment Co., Ltd., a wholly-owned subsidiary, to Luhai Holdings at a transaction price of 323 million yuan. Through this transaction, the company further stripped off inefficient assets and focused resources on the transformation and upgrading of high-end electrolytic copper foil equipment manufacturing business. 2) Deep ploughing electrolytic copper foil equipment, electrolytic foil equipment + consumables order support performance is still strong.

Hongtian Technology is one of the few domestic suppliers of electrolytic copper foil equipment, with a leading market share of about 30%. In addition to well-known domestic copper foil manufacturers, Hongtian Technology has also established a cooperative relationship with overseas customers, which is expected to contribute overseas revenue next year. In addition, the anode plate, as a high-value consumable material, is expected to match the company's equipment shipping rhythm and continue to contribute to revenue. 23Q3 contract liabilities of about 1.16 billion yuan, month-on-month increase of 9.3% over 23H1, on-hand orders are more sufficient, performance certainty is strong.

On the eve of the industrialization of composite copper foil, the company accelerates the localization of high-end lithium electric vacuum coating equipment 1) following the use of composite current collector in polar krypton 009 in April 23, this time M9 may become another application case of composite current collector to speed up the industrialization of composite current collector, or accelerate the landing of orders for catalytic upstream equipment. 2) the composite copper foil magnetic control all-in-one machine is progressing smoothly, and the company accelerates the localization of high-end equipment. The core technology of the company comes from overseas PVD leading enterprises, and the composite copper foil integrated machine equipment has been officially ordered by customers such as Hansai Xinliao and Nord shares, which is expected to continue to promote the localization of high-end lithium power equipment. 3) the company is assembling the magnetron + evaporation all-in-one machine and is expected to be available by the end of the year. The equipment has the advantages of high yield of dry process, uniform particles and strong peeling resistance, and is expected to greatly reduce the production cost of composite copper foil.

Sufficient production capacity both offensive and defensive, in conjunction with Dalian Technology to build vacuum magnetic spatter all-in-one platform 1) sufficient production capacity both offensive and defensive. The company plans to produce 20 sets of composite current collector equipment in 23 years and 100 sets in 24 years. After the new plant is put into production in 25 years, it will further enhance the production capacity of composite copper and aluminum foil equipment. 2) the vacuum magnetron platform is built by the combination of strong and strong forces. PVD is widely used in the field, and the company has reached an integrated industry-university-research cooperation with Dalian Technology, and the two sides have jointly built a joint research center, focusing on building a vacuum magnetron sputtering all-in-one business platform and broadening the new business track in multiple dimensions.

Investment suggestion: taking into account the impact of lithium downstream pressure on the delivery of upstream equipment, adjust the company's net profit on 23-24-25 to 2, 370, 000.

Risk tips: the development of new energy vehicles is not as expected; the development of capacity expansion products is not as expected; material price fluctuations and so on.