Matters:

According to the resolution and announcement of the company's board of directors, the company plans to increase capital by 15 million yuan to acquire 15% of Suzhou Daniu's shares; to invest 37.5 million yuan to establish a subsidiary with Anhui Ruishi Microintelligence (Dawson holds 75% of the shares); and plans to launch a financial derivatives preservation business of no more than 15 million US dollars in fiscal year 24.

Commentary:

Suzhou Daniu New Energy: Established in 2015, specializes in ultrasonic welding equipment from the United States. It also develops and sells equipment related to ultrasonic roll welding technology in the field of composite fluid collectors, which can provide overall solutions for efficient roller welding and welding quality inspection. Dawson Co., Ltd. increased its capital by 15 million yuan to Suzhou Daniu, holding 15% of its shares.

Ruishi Micro Intelligent Technology: Established in 2013, it is a national high-tech enterprise focusing on machine vision and intelligent equipment, providing professional products and technical services for customers in the FPD, PCB, new energy and semiconductor industries.

The joint venture is tentatively named Hongrui Microelectronics. Dawson shares invested 37.5 million yuan and held 75% of the shares. Ruishi Micro invested in core technology and held 25% of the shares at the price of intangible assets.

Improve the layout of the industrial chain and enhance the overall competitiveness of composite fluid collection equipment. Surface defects and pole ear welding are pain points in the manufacture and application of composite fluid collectors. Through this epitaxial layout, the company is expected to provide customers with more complete solutions, promote industrial development, increase the value of its own equipment in the composite fluid collector industry chain, and enhance customer stickiness.

The industrial layout continues the idea of platformization and domestic production alternatives. Epitaxial equipment has a wide range of applications. Downstream visual inspection includes FPD, PCBs, new energy and semiconductors. Ultrasonic technology is also widely used in automotive wiring, semiconductors, and medical fields. Overseas companies have a first-mover advantage. Well-known domestic foreign brands include Basler (Germany) and Zeiss (Germany) in the field of visual inspection, and Bennengxin (US) and Hellman (Germany) in the field of ultrasonic welding. The company has plenty of room to replace domestic production in the future.

The financial derivatives preservation business mainly avoids exchange rate risks. Most of the high-end equipment has imported components (such as molecular pumps, electron guns, etc.) that require foreign exchange settlement, and the company has reserved various import channels for core components. In addition, overseas equipment is also a long-term development direction. The company's customers for electrolytic copper foil equipment have developed Korea's Nisjin, and vacuum coating equipment is also actively expanding overseas customers.

Investment advice: The company is the leader in electrolytic copper foil equipment, and composite fluid vacuum coating equipment forms the company's second growth curve. After this epitaxial extension, the company is expected to grow into a high-end equipment platform enterprise. We expect the company's net profit to be 2.0/3.7/4.7 billion yuan in 23-25 years, corresponding to EPS of 0.98/1.76/2.27 yuan (not considering the possible contribution of the new epitaxial business), giving a 25 times valuation of 24-year performance, corresponding to a target price of 44.1 yuan, maintaining a “strong” rating.

Risk warning: demand for downstream production expansion falls short of expectations; new product development or promotion progress falls short of expectations; raw material price increases weaken profit levels; risk of a shortage of core components.