[Investment points]

Performance continues to grow steadily, and downstream applications continue to expand. In the first three quarters of 2023, the company achieved revenue of 371 million yuan, +35.15% year-on-year; net profit of 72,82219 million yuan, +32.66% year-on-year; and net profit of 63.034 million yuan, +36.32% year-on-year. Among them, Q3 achieved revenue of 130 million yuan, +32.37% year-on-year; net profit of 3031.56 yuan, +30.25% year-on-year; and net profit after deduction of 237.399 billion yuan, +26.36% year-on-year, and achieved steady growth in performance. In the first three quarters of 2023, the company's global sales volume of 3D printing equipment has exceeded 950 units. Currently, its products are widely used in aerospace, automotive, medical, industrial molds and other fields. Among them, the automotive sector can be used for optimized design, R&D and verification of auto parts, and small-batch manufacturing. In the future, with the continuous expansion of downstream application fields and application scenarios, the company is expected to enter a fast track of performance growth.

Increase research and development to enhance product competitiveness, and open up room for growth with diversified layouts. The company's Q3 gross margin was 20.12%, +1.95pct/+3.63pct y/y; net profit margin was 23.26%, +7.53pct month-on-month, and profitability continued to increase. In addition, the company's R&D investment continued to increase, with R&D expenditure of 57.9916 million yuan in the first three quarters, +43.24% over the same period last year. The company's self-developed flight technology has the characteristics of high precision and high efficiency, which can simultaneously reduce production costs and improve product quality.

In the future, the company will be guided by marketization and industrialization, tailor cost-effective solutions for customers according to specific application scenarios, and lay out diversified market segments to further open up room for growth.

New products empower large-scale manufacturing, and international competition has an advantage. In September 2023, the company unveiled four major 3D printers (FS1521M, FS1211M, FS811M-U, UT252P) and an intelligent polymer powder post-processing equipment (PMS) at the 2023TCT Asia Exhibition, empowering large-scale industrial manufacturing. Recently, the FS621M series was successfully ordered by a senior European industry user and is scheduled to be exhibited at the Formnext exhibition in Frankfurt, Germany on November 7-10. The launch of the new product highlights the company's strength in the field of technological innovation. In international market competition, the company has certain advantages in various aspects such as equipment size, production costs, intellectual property system, and software self-development, laying a solid foundation for its future exploration of broader international development.

[Investment advice]

In the short term, the company has sufficient orders, and product delivery is progressing in an orderly manner; in the medium to long term, with the completion of the first phase of the new material base, the construction of phase 2 and 3, and the completion of the 3D printing equipment expansion construction project, the company's production capacity on the materials and equipment side will increase significantly, building a solid foundation for it to expand the global 3D printing industrial market. On the demand side, the company is based in China and has established close cooperation with many leading customers in the global industry. It is expected to seize the opportunities of industrial transformation and seize the tide of technological development. We maintain an estimated 2023-2025 revenue of 744/10.68/1,429 million yuan, net profit of 1.55/2.16/286 million yuan respectively, corresponding EPS of 0.37/0.52/0.69 yuan/share, and corresponding PE value of 95/69/52 times for 2023-2025, respectively, maintaining the “increase in holdings” rating

[Risk Reminder]

Downstream customer expansion falls short of expectations

Production of new fund-raising projects fell short of expectations

Technology iterations fall short of expectations

High risk of dependence on imports of key components

Market competition heightens risk