The company issued an announcement of the preliminary performance increase in the 24th mid-year report. It is estimated that 24H1 revenue of 1.87-2.2 billion will increase 18.13%-38.97% year on year, net profit to mother of 0.094-0.11 billion will increase 876.88%-1049.27% year on year, and net profit excluding 0.082-0.097 billion will increase 3144.90% -3717.53% year on year. Our review is as follows:

Q2 Performance surpassed expectations. Looking at a single quarter, the company's Q2 median revenue was 1.15 billion +36.9% month-on-month +30.0%, net profit to mother 0.075 billion +454.5% month-on-month +184.7%, net profit excluding 0.047 billion year-on-year, +373.2% month-on-month +9.3%. Revenue in a single quarter achieved rapid year-on-year growth, due to the continuous improvement in the company's Q2 operating rate, and the downstream market's demand for high-rise, high-precision, high-density, and high-reliability multi-layer boards increased. Performance increased several times over the same period last year, due to the continuous volume of orders for high-margin products such as AI servers from the company's Amazon customers. The increase in server penetration rate of the new EGS platform led to an upward improvement in product unit prices and gross profit levels. According to our estimates, the company's gross margin is expected to increase dramatically in a single quarter.

Looking ahead to 24/25, the company is expected to develop heavily in communication networks, AI servers, and automotive electronics, and return to a rapid growth path. In the field of high-end communication network equipment, the company continues to actively cooperate with leading customers to develop PCB products in application fields such as 5.5G/6G, satellite communications, 800G switches, optical modules, etc., and is expected to achieve mass production over 24 years, which is expected to increase the unit price of the product; in the server field, the company continues to optimize the server product structure and focus on AI server product development. Currently, it is expected that AI product revenue will expand further in 24 years, with the release of production capacity in Dongcheng Phase IV; automobiles In the electronics sector, the company continues to increase investment in dedicated automobile lines, and continues to develop more new technologies in segments such as intelligent driving, power energy, and smart cockpits. With the increase in production capacity in Ji'an and Dongcheng and the introduction of batch orders from more new customers, the scale continues to grow rapidly. In summary, along with the continuous increase in global computing power demand, domestic data center expansion, demand for high-computing power servers, and new platform upgrades, etc., the three-phase trend of automobiles evolves at an accelerated pace, and the company is expected to continue to benefit from the rapid development of industry segments and the dividends of new production capacity.

Maintain an “overweight” investment rating. The company has been deeply involved in communication networks, HPC, and automotive electronics circuits for many years. It has mastered mainstream customer resources and core technology, and has strong core competitiveness. Along with the continuous release of new production capacity, the company will continue to benefit from the three main business lines in the long term and return to a rapid growth path. Taking into account the company's H1 successfully turned losses into profit and exceeded expectations, the future growth potential brought by the company's customer product layout in the computing power market, and the company's equity incentive targets and expenses to be assessed, we revised the company's 24-26 revenue of 4.58/6.19/8.04 billion and net profit of 0.22/0.61/0.95 billion, corresponding to EPS 0.27/0.73/1.14 yuan, corresponding to the current PE 76.9/27.9/17.9 times, maintaining an “increase in holdings” investment rating.

Risk warning: Prices of upstream raw materials fluctuate; customer development falls short of expectations; downstream demand falls short of expectations; new production capacity falls short of expectations; industry competition intensifies.