Incident: The company announced its 2023 performance forecast. In 23, the company expects to achieve net profit of 1.85 to 225 million yuan, an increase of 73.80%-111.37%; to achieve non-net profit deducted from mother of 125 to 150 million yuan, an increase of 41.56%-69.87%. The company's high net profit growth was due to the subsidiary Hongtian Technology, which accelerated the shipment of electrolytic copper foil equipment in 23 years. At the same time, the company increased its holding ratio to 81% and increased its share; non-recurring profits and losses were due to government subsidies and profits and losses from the company's divestment of Dawson Oil Drilling's traditional business.

Traditional copper foil equipment: Electrolytic copper foil equipment release, anode plate consumables can be expected to increase 1) The company's volume of electrolytic copper foil equipment was successfully transformed into new energy equipment manufacturing. We expect Hongtian Technology to achieve revenue of 1 to 1.2 billion yuan in 23, which is estimated to be due to the volume of domestic cathode rollers and foiling machines. 2) The net interest rate of the subsidiary Hongtian Technology remains at a high level. Hongtian Technology's net interest rate was about 22% in '22, and is expected to remain around 20% in '23. 3) The company is actively expanding overseas markets, and traditional electrolytic foil equipment may still be supported. The upstream expansion of domestic electrolytic copper foil production is slowing down, and the company has begun to actively break through overseas. It is expected that the increase in anode plate consumables can be expected in 24 years based on ongoing orders 4). Anode plates are important consumables for electrolytic copper foil equipment, and the net profit level per unit is high. It is expected that orders for electrolytic copper foil equipment will continue to be implemented in 24 years, and anode plates are expected to show flexibility in performance.

Composite copper-aluminum foil equipment: The magnetron sputtering all-in-one test went smoothly, waiting for the all-in-one magnetron sputtering and evaporation machine to land 1) There are sufficient orders for composite fluid collection equipment. According to the company, there are currently orders for equipment from NORD and Han Yi. 2) The all-in-one magnetron sputtering machine is progressing smoothly, and the company expects to complete a 10,000-meter roll in the near future. 3) The theoretical cost advantage of magnetron sputtering and evaporation all-in-one machines is obvious, and new orders are expected to be launched after commissioning is completed. According to the company's disclosure, the design speed of the all-in-one magnetron sputtering evaporation machine is 12-15 m/min, and the theoretical cost is expected to be lower than the level of electrolytic copper foil. The assembly has now been completed, and a new order is expected to be placed after commissioning is completed. 4) In the development of composite aluminum foil evaporation equipment, it is expected to be put on the market 24H1.

The “Struggler” incentive plan works hard to build an ultra-precision technology joint research center with Dalian Science and Technology 1) The total amount of capital raised in the current employee shareholding plan is not less than 0.26 billion yuan to motivate the core backbone. The performance assessment targets are not less than 15/20 billion yuan in 2024/25. At the same time, any of the following goals must be achieved: the total number of Hongtian patent applications in 24 years is not less than 30, or the Nanjiangdu plant is officially put into operation. 2) Qiangqiang joined forces to build an ultra-precision vacuum coating center. The company cooperated with 9 experts and scholars including Academician Guo Dongming of Dalian Technology, Professor Zhou Ping, and Professor Huang Hao to jointly build a joint research center for ultra-precision technology. We believe that this cooperation will accelerate the development of the company's ultra-precision vacuum coating equipment and high-end copper foil production equipment, and it is expected that domestic replacement of advanced equipment will be realized as soon as possible.

Investment advice: The company's electrolytic copper foil equipment+anode plate consumables are safety pads, and composite copper and aluminum foil equipment is expected to contribute elasticity, maintaining a profit of 2/37/500 million yuan in 23/24/25, corresponding to 27/15/11 times PE, maintaining the purchase rating.

Risk warning: New energy vehicle development falls short of expectations; capacity expansion product development falls short of expectations; material price fluctuations, etc.