In the new journey of intelligent technology, the company is actively deploying a strategic layout in the field of robotics. The humanoid robot market capacity is expected to reach US$17.3 billion by 2027, with a compound growth rate of 63.5%, which is a huge market space. The company previously announced its entry into the robotics industry. In particular, it will focus on 1X Technologies, which will be invested by OpenAI. This strategic transformation is expected to accelerate the company's layout in the high-tech field. Today, the company announced that it and Zhongjian Technology will jointly invest in 1xTechnologies through an overseas SPV company. The total project investment amount is about 6 million US dollars, of which the company invested about 50%. At the same time, the company and Zhongjian Technology jointly established “Shanghai Zhi Krypton” as a distributor of overseas intelligent robot products in China (the company holds 40% of the shares). The company's active layout in the field of robotics is expected to bring new growth impetus to the company's development.

The photovoltaic power plant business is growing steadily, and the business volume is expected to continue to increase. In the first half of '23, the share of the company's photovoltaic power generation in the business further increased from 30.33% in the same period in 2022 to 34.04%, and revenue increased 19% year-on-year. The company already has 131.82 MW of photovoltaic power plants in operation. Photovoltaic power generation has become an important business segment of the company and is showing a rapid development trend under the major trend of China's energy transformation. Among them, the company's ongoing Huaze merger and acquisition project has more than 1,640 MW of internal power plant projects, which is 10 times the number of photovoltaic power plants currently operated by the company, and will greatly increase the volume of the company's photovoltaic power plant business.

The share buyback shows confidence in development, and the debt ratio continues to decline. In the first three quarters of '23, revenue reached 240 million, total assets reached 1.8 billion, and net assets reached 1,169 million yuan. Based on confidence in the company's future high-quality sustainable development and recognition of the company's intrinsic value, the company plans to use the company's own funds to repurchase the company's shares through centralized bidding transactions, with a total repurchase capital of about 50 million yuan to 100 million yuan to implement an equity incentive plan or employee stock ownership plan. At the same time, the cumulative principal and interest of foreign debt repayment in 23 years has exceeded 471 million yuan. The balance ratio has dropped sharply from 40.33% in '21 to about 22%, and the net asset interest/debt ratio has been reduced to about 10%, which shows that the company's financial situation and cash flow are currently good.

Investment advice: We expect the company to achieve net profit of 0.73, 0.44, and 100 million yuan in 2023-2025, respectively, and PE 94.98/41.80 times in 2024-2025, respectively. Covered for the first time, giving a “Recommended” rating.

Risk warning: risk of macroeconomic fluctuations, downstream demand falling short of expectations, overseas market risk