Performance summary: In 2023, the company achieved operating income of 1.23 billion yuan (+34.2%), and realized net profit of 142 million yuan (+78.1%), corresponding EPS of 0.89 yuan, after deducting net profit of 106 million yuan (+255%). Among them, 2023Q4 achieved operating income of 491 million yuan (+23.4% YoY, +62.0% YoY), realized net profit of 103 million yuan (YoY +1.5%, +397% YoY), net profit after deducting non-return to mother of 901 million yuan (+13.8% YoY, +576% month-on-month); the additive manufacturing industry is steadily moving forward: the demand for additive manufacturing in some fields in 2023 was affected by downstream adjustments, and related companies' performance fluctuated. However, orders in the fields of consumer electronics, automotive molds, and commercial aerospace have grown rapidly, calming fluctuations in demand to a certain extent. At the price level, with the emergence of more and more additive manufacturing equipment companies, equipment prices in the industry have declined, but leading companies have reduced costs with their own technology accumulation and efficiency improvements, while at the same time accelerating the replacement of localized parts, thus maintaining a relatively stable revenue growth and profit growth rate; the pace of delivery has had an impact, and actively goes overseas: from a revenue perspective, by product, the company's customized product business revenue is 628 million yuan (+34.5%), mainly due to the expansion of the downstream sector and the company's production capacity climbing; equipment business revenue of 529 million yuan (+26.5%), Equipment sales volume is 242 units (+42.4%), and the average price of equipment is 2.185 million units (-11.1%). As industry competition intensifies and product structure affects, equipment prices have declined; revenue from printing raw materials is 64 million yuan (+99.0%). We judge that the main reason is that the powder revenue base is low and the company has adopted a combined sales strategy, which is highly accepted by customers. By terminal sector, the aerospace sector was affected by downstream adjustments. The revenue growth rate fell from 102% in 2022 to 8.3% in 2023; the industrial sector maintained high growth, achieving revenue of 460 million yuan (+91.4%), which is presumably due to developing customers in new industrial fields. Against the backdrop of slowing growth and intensifying competition in some domestic sectors, the company actively lays out overseas markets, and the overseas business maintained a high increase of 51.09 million yuan (+118%) in 2023; product profitability was under pressure, and the structure was adjusted: From the perspective of profit by product, the gross margins of customized products, printing equipment, and printing raw materials were 49.6%/50.6%/34.3% respectively, a year-on-year decrease of 9.1pcts/0.6pcts/4.7 pcts. In our judgment, the main reason for the decline in profitability was increased industry competition and product structure adjustments; In terms of fields, in the aerospace sector, against the backdrop of repricing and sluggish demand, gross margin was under pressure (-3.5pcts), and gross margin in the industrial sector declined (-6.0 pcts), mainly due to increased industry competition and changes in product structure;

Financial data: Net cash flow from the company's operating activities - 130 million yuan, mainly due to the expansion of the company's business scale, payment of employee remuneration, taxes and equity incentive income tax; the company's financing cash flow increased dramatically, mainly due to the company completing targeted stock issuance to raise capital; financial expenses increased by 150%, mainly due to the company's investment in production capacity construction and increased loans; projects under construction and intangible assets increased sharply by 106.6% and 91.6%, reflecting the acceleration of the company's production capacity construction; accelerated construction of projects, and a relatively rapid growth rate of production capacity: March 15, 2024 period The commencement ceremony for plot C and plot D was held. Since then, construction of all Phase III plots has begun, marking that the company's production capacity construction has reached its peak. The Phase III project is mainly used for R&D centers, equipment manufacturing workshops and other supporting facilities. Construction of the fourth phase of the project also began in May 2023. It is mainly used for powder production, customized product production, etc., and is the transformation of additive manufacturing from customized development to industrial application. The company currently has more than 1,610 laser heads, an increase of nearly 200 compared to mid-2023, and the emerging industry is showing great strength: additive manufacturing is a disruptive innovation in existing production models, plays an important role in many high-precision fields, and has the advantages of good performance, low cost, moderate efficiency, and strong adaptability. It is a new quality of productivity in the new era - in the low-altitude economy, 3D printed calipers can help EVTOL aircraft reduce weight and improve battery life; in commercial space, 3D printed swimming airframe parts and rocket components can be used Help rockets dissipate heat faster, improve performance, and reduce overall costs. We judge that additive manufacturing will play an irreplaceable role in the future of emerging manufacturing;

Investment advice: As a representative of new quality productivity, additive manufacturing occupies an important position in high-end manufacturing. As a leading enterprise in the industry, the company will fully enjoy the dividends of the rapid penetration of new processes in various fields, and its performance will continue to increase. We expect that in 2024-2026, the company will achieve operating income of 1.85 billion yuan, 2.56 billion yuan, 3.59 billion yuan, and a year-on-year increase of 50%, 39%, and 40% year-on-year net profit of 310 million yuan, 490 million yuan, and a year-on-year increase of 121%, 57%, and 43%. Corresponding PE is 49X, 31X, and 22X, maintaining a “buy” rating.

Risk warning: Risks such as changes in market supply and demand, increased competition in the industry, fluctuations in gross margin due to overseas import and export policies, project construction falling short of expectations, replacement of localized parts falling short of expectations, and downstream promotion falling short of expectations