Performance summary: In the first three quarters of 2023, the company achieved operating income of 370 million yuan (+35.2%), net profit attributable to mother of 0.73 million yuan (+32.6%), corresponding basic EPS of 0.18 yuan, net profit of 63 million yuan (+36.3%); of these, the 2023Q3 company achieved operating income of 130 million yuan (+32.4% YoY, -7.0%), and realized net profit of 30 million yuan (+30.3% YoY, +37.5% YoY). , +13.1% month-on-month); Additive manufacturing applications have exploded, and cost performance factors have increased: Since the third quarter, additive manufacturing industry applications have accelerated, from the folding screen hinge cover of Honor phones using titanium alloy 3D printing, to Apple Watch or 3D printing technology, additive manufacturing applications will gradually move from the aerospace field to consumer electronics, medical implants, etc., and form large-scale applications at the level of one million pieces. We judge that applications in these fields will effectively open up the industry ceiling, increase industry popularity, and accelerate the penetration rate of additive manufacturing in the manufacturing field; at the same time, Increased cost sensitivity among end users is also driving the industry to make active adjustments. On the one hand, more cost-effective domestic components are gradually being applied. On the other hand, sales of high-efficiency, large-volume printing equipment have increased, bringing new trends in the industry; the company's performance was in line with expectations, and profitability remained stable: the revenue growth rate for the first three quarters was 35.15%, which was at the top of the forecast of previous performance disclosure announcements (23.7% to 35.12%), in line with expectations. The main reason is that the company has made progress in diversified additive manufacturing applications. By the end of the reporting period, it had accumulated sales of additive equipment. More than 950 units, including more than 500 metal additive manufacturing equipment; in terms of profitability, the 2023Q3 company had a gross profit margin of 51.8% (flat month-on-month), a net profit margin of 23.3% (+7.5pcts month-on-month), and the net interest rate increased more than gross margin, mainly due to better control of the cost rate during the period (-3.5pcts, -3.3pcts), and received government subsidies (6.176,000 yuan) during the reporting period; financial data: Compared to the beginning of the year, the company's inventory rate was better controlled during the period. increase 45.1%, negative cash flow from operating activities, is mainly due to the expansion of the company's operating scale since the beginning of the year, and the increase in equipment parts procurement and a sharp increase in employee remuneration; the number of projects under construction increased by 65.6%, mainly due to the company's investment in construction capacity; the industry will enter the Matthew effect, and the competitiveness of leading enterprises will continue to increase: Entering 2023, the financing progress of leading companies will accelerate, and leading companies represented by Huashu Hi-Tech will have a leading edge in financing costs, payment terms, and market popularity. After listing, the company carried out production capacity construction, and after completion, the equipment production capacity reached 720 units/year. We judge that the advantages at the above level will enable leading companies in the industry to continue to expand their advantages at both the supply and demand levels; the company actively expands industrial customers, and consumer electronics opens the market ceiling: During the reporting period, the company actively promoted diversified applications of additive manufacturing in different fields. Among them, important industrialized customers used 3D printing in the consumer electronics field, which solved problems such as titanium alloy processing difficulties and low yield, and effectively opened up the additive manufacturing industry ceiling; we judge that due to the large scale of single products in the consumer electronics field, leading companies are like Huashu Hi-Tech will have more opportunities to meet demand and enjoy industry dividends; Investment advice: As a diversified and international additive manufacturing equipment manufacturer, the company achieved rapid growth during the reporting period. With the company's continuous breakthroughs in aerospace, medical care, automobiles, molds, and consumer electronics, the company's performance will maintain a relatively rapid growth rate. We expect the company to achieve operating income of 600 million yuan, 820 million yuan, and 1.18 billion yuan in 2023-2025, up 32.2%, 35.4%, and 44.1% year-on-year net profit of 130 million yuan, 190 million yuan, and 270 million yuan, with year-on-year increases of 31.2%, 41.9%, and 47.7%, corresponding to PE103X, 72X, and 49X, giving it a “buy” rating.

Risk warning: Risks such as changes in market supply and demand, increased industry competition, risk of gross margin fluctuations due to overseas import and export policies, project construction falling short of expectations, replacement of localized parts falling short of expectations, and falling downstream promotion falling short of expectations