Core views:

The company released a quick performance report. In 23 years, it achieved revenue of 606 million yuan, net profit of +32.67% year on year, +34.62% year on year, net profit after deducting non-return to mother of 122 million yuan, +36.60% year on year. Among them, 23Q4 achieved revenue of 235 million yuan, +29.12% year over year, net profit to mother of 60 million yuan, +36.36% year over year. The revenue for the single quarter reached a record high of 26%.

A technology-leading 3D printing equipment company, downstream applications are flourishing. The company is one of the few additive manufacturing enterprises in the world that also has independent R&D and production capabilities for 3D printing equipment, materials and software. According to the company's official website, Hangyue Technology cooperated with the company to combine 3D printing technology with precious metal (metal silver, etc.) cultural and creative crafts, and production efficiency can be increased by more than 80% compared to traditional methods; Nanjing University of Science and Technology independently developed a carbon fiber-reinforced PEEK composite SLS preparation process based on the company's equipment to solve the problem of forming materials with high melting point. We believe that with the iteration and cost reduction of 3D printing technology, this type of process will gradually spill over from the military industry to the consumer industry, and is expected to expand in 3C, automobiles, robotics and other industries.

Expanding production breaks through capacity bottlenecks and continuously strengthens competitiveness. According to the company's official WeChat, on January 30, 2024, Huashu Hi-Tech's R&D headquarters and industrial application center and additive manufacturing equipment expansion project ushered in the successful capping of the No. 1 research building. The first phase of the project is Huashu Hi-Tech R&D headquarters, industrial application center and additive manufacturing equipment expansion construction. It will help enhance the performance and technical capabilities of Huashu Hi-Tech's independent innovation high-performance additive manufacturing equipment, and continue to carry out key technical research and high-level equipment development in the field of additive manufacturing to promote the industrialization of additive manufacturing.

Profit forecast and investment advice: The company is expected to achieve net profit of 1.33, 1.94, and 277 million yuan in 2023-2025. Referring to comparable companies, the company is given 70 xPE in 2024, corresponding to a reasonable value of 32.81 yuan/share, and maintain an “increase in holdings” rating.

Risk warning: macroeconomic downturn, manufacturing demand falls short of expectations; 3D printing costs fall short of expectations; production capacity release falls short of expectations; customer development falls short of expectations, etc.