Maintain an increase in holdings rating. The company is leading in measurement and testing services in China, and multiple business sectors are developing collaboratively.

Maintain the 2024-26 EPS of 0.54/0.70/0.87 yuan, refer to the 2024 industry valuation of 27.97 times, give the company 28 times PE in 2024, lower the target price to 15.12 yuan, and increase the rating.

Performance is in line with expectations: The company announced its 2024 semi-annual results forecast. It is expected to achieve net profit of 0.075-0.085 billion yuan (+24.66% to 41.29% YoY) and achieve net profit of 0.06-0.07 billion yuan (YoY +37.99% to 60.99%); Q2 is expected to achieve net profit attributable to mother 0.074-0.084 billion yuan (+17.56% to 33.49% YoY), achieving 0.066- 0.076 billion yuan (+23.97% to 42.74% YoY).

Special industries, automobiles, integrated circuits and other fields grew steadily, and food and environmental testing shrank losses. The company increased its market expansion to achieve steady growth in orders in key fields such as the Tezhu industry, automobiles, integrated circuits, and data science. At the same time, we will continue to improve the regional coverage and capability coverage of mature businesses such as metrology, reliability and environmental testing, and electromagnetic compatibility testing, and use the leading advantages of mature business segments to enable collaborative development of integrated circuit testing and analysis, life science, data science, and training services. Weak businesses such as food testing and ecological environment testing promptly reduced loss laboratories, and initial results were achieved in reducing losses.

Fully implement refined management to vigorously promote cost reduction and efficiency. By optimizing the organizational structure and management responsibility assessment system, the company establishes a profit-centered assessment model, continuously controls the size of personnel, strengthens the control of various expenses, further shrinks the loss-making business sector, and pushes the cost increase to be lower than the revenue increase, and profitability is expected to increase.

Risk warning: Demand for measurement services falls short of expectations; market competition intensifies.