Core views

The company announced the share repurchase plan on February 1, 2024. The total amount of this repurchase is not less than 10 million yuan and no more than 20 million yuan. The repurchase period is within 12 months from the date of publication of this announcement. This repurchase shows the company's firm confidence in future development.

The company is a leading domestic additive manufacturing equipment enterprise. The metal+polymer equipment is two-wheel drive, and the equipment performance remains leading. At the same time, downstream application scenarios for additive manufacturing continue to expand, and the military and civilian market is growing together, and there is broad room for future growth.

occurrences

The company announced a share repurchase plan on February 1, 2024: it is intended to repurchase shares through the open market. The total repurchase amount is not less than 10 million yuan and not more than 20 million yuan. The repurchase period is within 12 months from the date of publication of this announcement.

Brief review

1. Repurchase shares at the bottom to confirm the investment value of the enterprise

Based on confidence in stable development and recognition of the company's long-term value, after comprehensively considering the company's secondary market performance, financial situation, and future profitability and development prospects, the company plans to use its own capital and part of the overraised capital obtained from the initial public offering to buy back some of the issued A shares through centralized bidding through the secondary market. The total amount of this repurchase is not less than 10 million yuan and not more than 20 million yuan. The repurchase period is within 12 months from the date of publication of this announcement. The repurchase price does not exceed 150% of the average trading price of the company's shares in the 30 trading days before the board of directors passed the buyback resolution. The method of repurchasing shares is a centralized bidding transaction. The funding source is part of the overfunded capital obtained by the company's initial public offering of RMB common shares and its own capital. This repurchase is a strong proof of the company's stable profitability and sufficient capital reserves. It reflects management's strong expectations for the company's future development. It is expected that this repurchase will help boost market confidence and protect the rights and interests of small and medium-sized shareholders.

2. The additive manufacturing market continues to grow, and downstream applications continue to explode. According to Wohlers Associates, Inc. statistics, the global additive manufacturing output value in 2021 was US$15.244 billion, an increase of 19.50% over 2020.

After more than 30 years of development, the additive manufacturing industry is moving from its inception to a period of growth. According to Wohlers forecasts, additive manufacturing revenue will double from 2020 to $29.8 billion by 2025, and will grow 5.6 times to $85.3 billion by 2030. In the aerospace field, due to factors such as complex component shapes, high processing costs and lightweight requirements, additive manufacturing has developed into a key core technology to improve design and manufacturing capabilities. It can be used to achieve complex internal structures, improve component performance, and can also be used for component repair, extend the service life of equipment, and reduce economic losses.

In the automotive industry, 3D printing technology can achieve mold-free design and manufacturing, helping enterprises shorten the design and production cycle of product concept models and optimize design to reduce costs and shorten product launch time. In the field of consumer electronics, titanium alloy has characteristics such as high hardness, low density, and human compatibility. Using titanium alloy as an electronic product shell is not only very friendly to people with metal allergies, but also reduces scratches and weight. 3D printed titanium alloys have excellent cost performance. Honor MagicV2 has used additive manufacturing technology to manufacture axles and hinges. The company is a leader in industrial additive manufacturing equipment in China. Its business covers aerospace, automotive, consumer electronics and other fields, and is expected to fully benefit from the rapid growth of the industry.

3. Two-wheel drive for metal+polymer additive equipment helps the company develop in the future. The company focuses on industrial-grade additive manufacturing, has independent R&D and production capabilities for 3D printing equipment, materials and software, and ranks among the highest in the world in terms of sales scale. 1) Metal 3D printing equipment. The metal 3D printing equipment independently developed by the company uses selective laser melting (SLM) process technology. As of September 30, 2023, the company has launched a variety of large-scale high-efficiency metal additive manufacturing systems for industrial users, including the world's first 16 lasers, FS1521M, an innovative metal additive manufacturing system for mass production of oversized parts, a molding cylinder size of 1.5 meters, and two other large-size equipment FS1211M and FS811M-U. 2) Polymer 3D printing equipment. The polymer 3D printing equipment independently developed by the company uses selective laser sintering (SLS) process technology. The self-developed HT1001P is the only polymer (SLS) device with a uniaxial size of 1 meter or more in the world. The production efficiency increase is close to 100%, meeting the size requirements of parts in various application scenarios, and achieving high-quality integrated molding of large-scale complex structures; 403P series materials can be used 100%, and the molding space can be maximized, and has extremely high production efficiency. The company continues to improve its product layout in the field of 3D printing equipment and materials to meet the diverse needs of customers in various downstream industries.

4. Profit prediction and investment rating: Leading additive manufacturing equipment companies, downstream application scenarios continue to expand. The “buy” rating companies are leading domestic additive manufacturing equipment companies. Metal+polymer equipment two-wheel drive, equipment performance remains leading. At the same time, downstream application scenarios of additive manufacturing continue to expand, and the military and civilian market is growing together, and there is broad room for future growth. We are optimistic about the company's future prospects. The company's net profit from 2023 to 2025 is expected to be 1.34, 1.83 million yuan, and 251 million yuan, respectively, with year-on-year increases of 35.68%, 36.45%, and 36.82%, respectively. Corresponding PE from 23 to 25 was 66.69, 48.88, and 35.72, respectively, giving a purchase rating.

Risk analysis

1. R&D results fall short of expectations: The company always insists on high R&D investment. R&D investment accounts for more than 20% of revenue all year round. If R&D results fall short of expectations, it will significantly affect future market expansion and product upgrading, thereby affecting performance release.

2. Market competition intensifies: With the further advancement of military and civilian integration, the threshold for the military industry is gradually lowered, the company's traditional areas of advantage may be penetrated, and competition in emerging fields will become more intense, thus affecting the company's revenue and profitability.

3. The incentive effect falls short of expectations: The company has implemented a series of incentives to increase employee enthusiasm and enhance the company's vitality. If the incentive effect falls short of expectations, it may affect the company's long-term performance.

4. Risk of falling prices of raw materials: The market price of 3D printing raw materials is volatile, and the company is in the development stage of increasing inventory. The book value of inventory is expected to reach 400 million yuan in 2024. If a 10% inventory price drop loss occurs, the predicted net profit value will decrease by 21.9%.