Performance summary: In 2023, the company achieved operating income of 610 million yuan (+32.7%), achieved net profit of 130 million yuan (+32.30%), corresponding EPS of 0.33 yuan, net profit of 120 million yuan (+30.0%) after deducting non-return to mother. In 2024Q1, Morocco achieved operating income of 120 million yuan (+23.5% YoY, -47.0%), net profit to mother of 0.26 million yuan (+28.4% YoY, -55.0% month-on-month), net profit after deducting non-return to parent of 0.24 million yuan (+32.8% YoY, -55.9% month-on-month); Rapid industry development: In 2023, the additive manufacturing industry developed rapidly against the backdrop of fluctuating downstream customer demand and pressure on the macro environment. It has successively developed key customers in the fields of consumer electronics, automobile molds, and shoe models. The global additive manufacturing market is growing at an overall rate of 11.1%. Among them, metal machines are growing faster than non-metal machines (metal machines growing 24.4%), leading companies are growing faster than at the end (revenue growth rate of large enterprises is 40-50%), and domestic growth is faster than overseas (domestic 3D printing equipment production growth of 36.2%); the company's performance remains steady, and profitability remains high: at the revenue level, by industry, aerospace revenue of 370 million yuan (+120.6%), showing that downstream service customers are growing faster and the proportion of large equipment is increasing. Revenue was 1.7/40 million yuan, down 25.1%/1.6% year on year, and it is estimated that the industrial sector declined more, mainly due to a decline in equipment prices; by product, 3D printing equipment/printing materials/after-sales service revenue of 5.4/0.40 billion yuan, up 34.0%/16.7%/44.3% year on year, equipment sales volume of 172 units (-7.5%), single DI 310 m iL/R port (+43.4%), mainly the share of large printing equipment in the company increased; by region, domestic/overseas revenue of 46/140 million yuan Yuan, a year-on-year increase of 60.5%/-14.7%, reflecting a marked increase in domestic market demand compared to overseas. In terms of profitability, in terms of profitability, in addition to universities and scientific research and medical fields, the company's gross margin increased. In the aerospace and industrial fields, the gross margin was 52.4% and 47.8%, down 4.8pct and 1.8pct respectively. We speculate that the company's product structure has been adjusted and large-scale equipment is facing certain price competition pressure; by product, the gross profit margin of the company's printing equipment/printing raw materials has decreased by 51.3%/42.4%, respectively. We estimate that the gross margin of printing materials has dropped even more. This is due to a decline; by region, domestic gross margin remained flat, while overseas gross margin fell by 3.3 pct, reflecting stronger domestic demand; financial data: In 2023, the company's operating cash flow decreased a lot, mainly due to the company's increased production scale; monetary cash increased 226%, due to the receipt of investment payments; notes receivable and accounts receivable increased more, presumably due to the company providing better payment terms; the increase in ongoing construction was mainly due to the company's production expansion projects; steady growth in 2024Q1: 2024Q1 revenue of 120 million yuan (+23.5%), gross profit margin of 53.9% (+4.8pct month-on-month), mainly due to the company's rapid growth in customer demand in the aerospace sector. The net interest rate fell 3.7 pct month-on-month, mainly due to a significant increase in the cost ratio during the period (+9.6pct), mainly due to a low base of demand growth in the additive manufacturing industry: low growth in the fourth quarter: Low altitude economy: low altitude growth Stimulate the penetration of new processes - Additive manufacturing plays an important role in the low-altitude economy. The company has cooperated with overseas customer H for many years, mainly including equipment, powder and after-sales service. The 3D printing process has significant advantages in integrated manufacturing, special-shaped complex structural parts manufacturing, and high-strength and lightweight manufacturing, so the rapid development of the low-altitude economy will drive the 3D printing industry to continuously increase the penetration rate and market space in the field of low-altitude aircraft; commercial space demand is strong - with the development of commercial aerospace, additive manufacturing has become an indispensable core process. Domestic leading rocket company Deep Blue Aerospace uses Huashu Hi-Tech equipment. More than 80% of the components are printed using additive manufacturing. Using the advantages of integrated molding and lightweight manufacturing, the price of parts is drastically reduced, production speed is increased, and excellent product performance and high reliability are obtained. The introduction of the Starnet plan has made domestic commercial space rocket demand stronger than ever, and the company will fully benefit from the dividends of the times; investment proposal: With its strong industry position and technical strength, the company has achieved steady performance in increasingly fierce competition in the additive manufacturing industry. At the same time, with the rapid development of emerging fields such as commercial aerospace and low-altitude economy, the company is expected to maintain a steady growth trend. We expect the company to achieve revenue of 830 million yuan, 1.26 billion yuan, and 1.75 billion yuan in 2024-2026, an increase of 36.8%, 51.6%, and 39.0% year-on-year net profit of 180 million yuan, 260 million yuan, and 350 million yuan, an increase of 34.7%, 46.9%, and 34.4% year-on-year, corresponding to PE.58X, 39X, and 29X, maintaining a purchase 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