Core views:

The 23-year performance achieved high growth, and the aerospace sector contributed the main revenue. According to the company's 2023 annual report, the company achieved annual revenue of 606 million yuan, +32.74% year on year; realized net profit of 131 million yuan, +32.26% year over year; realized net profit of 118 million yuan without return to mother, +30.00% year on year. In 2023, the company continued to deepen the application of 3D printing technology in the aerospace field. The aerospace sector achieved revenue of 372 million yuan, +120.58% over the same period last year, accounting for 61.40%.

24Q1 profit increased steadily, and R&D investment continued to be increased to consolidate the company's technological advantages. According to the company's 2024 quarterly report, the company achieved operating income of 124 million yuan in the first quarter, +23.49% year over year; realized net profit of 0.26 million yuan, +28.44% year over year; achieved net profit after deduction of 24 million yuan, +29.21% year over year, and operated steadily in the first quarter. The company spent 16 million yuan on R&D in the first quarter, +21.14% year over year. The 3D printing industry is still in the early stages of exploration and development. The company is one of the few additive manufacturing companies in the world that also has independent R&D and production capabilities for 3D printing equipment, materials and software. Continued R&D investment is expected to strengthen the company's technical barriers.

Cumulative sales of 3D printing equipment are at the forefront of the industry, helping the industrialization of 3D printing. According to the company's 2023 annual report, the company's cumulative sales volume of 3D printing equipment has now exceeded 1,000 units, ranking among the highest in the industry. Among them, the global installed volume of metal 3D printing equipment exceeds 450 units, and the installed capacity of medium and large metal equipment users exceeds 130 units. The excellent and stable performance of the company's equipment has brought continuous benefits to customers, and has also helped 3D printing develop rapidly towards scale and industrialization.

Profit forecasting and investment advice. We estimate that the company's net profit for 2024-2026 will be $1.90/258/358 million, respectively. Considering that the company, as a leading enterprise in the field of 3D printing, has technology accumulation and advantages in the fields of materials, software, and equipment, we gave the company a 70 times PE valuation in 2024, corresponding to a reasonable value of 32.05 yuan per share, maintaining an “gain” rating.

Risk warning. Macroeconomic risks, the development of 3D printing falls short of expectations, and industry competition exacerbates risks.