The company's 2024Q2 performance increased year-on-month, maintaining the “buy” rating company's 2024 semi-annual report performance forecast. In the first half of 2024, the company achieved net profit of 2.88 to 0.375 billion yuan, +4.76 to +0.563 billion yuan year on year; after deducting non-net profit of 2.65 to 0.355 billion yuan, +5.26 to +0.616 billion yuan year on year. Among them, in the 2024Q2 single quarter, the company achieved net profit of 1.90 to 0.277 billion yuan, +3.82 to 0.469 billion yuan, +92.42% to +180.75% month on month; after deducting non-net profit of 1.7 to 0.26 billion yuan, +3.86 to +0.476 billion yuan year on year, +80.36% to +175.58% month on month. We maintain the company's 2024-2026 profit forecast. The net profit for 2024/2025/2026 is 0.977/1.259/1.639 billion yuan, corresponding to the 2024/2025/2026 EPS of 0.64/0.83/1.08 yuan, and the current stock price corresponding PE is 36.3/28.2/21.7 times. We are optimistic that the company, as a leading domestic sealing and testing leader, will maintain a “buy” rating due to the resilience of the recovery cycle and the growth of advanced packaging.

Industry demand continued to recover. Recovery in operating rate+cost control led to a significant increase in performance in the first half of 2024. In the first half of 2024, the semiconductor industry showed a recovery trend. Market demand picked up, and technologies and applications such as artificial intelligence promoted industry development. 2024H1 has been proactive, capacity utilization has increased, and the year-on-year increase in revenue has increased markedly. In particular, revenue from the middle and high-end product business has increased markedly. According to preliminary statistics from the company's finance department, the company's 2024Q2 revenue increased significantly year-on-month. At the same time, thanks to its own strengthened management and cost control, the company's overall efficiency has improved significantly.

Accelerating the expansion of advanced packaging scale is expected to fully benefit from the multi-field technology layout. By the end of 2023, the company's ultra-large 2D+ packaging technology, 3D stacked packaging technology, and large multi-chip chip last packaging technology have been verified and passed. Looking ahead to 2024, the company set a 2024 revenue target of 25.28 billion yuan, +13.52% year-on-year. In addition, the company will control traditional packaging capital expenses and vigorously expand the scale of advanced packaging. It plans to invest a total of 4.89 billion yuan in facility construction, production equipment, IT, and technology research and development in 2024. The company continues to promote diversified research and development of new products. With the advantages of advanced packaging technology such as FCBGA and Chiplet, the company continuously strengthens in-depth cooperation with customers such as AMD, and superimposes penetration in various fields such as AI/mobile phones/PC/automobiles. The company will fully benefit from a new round of growing demand in the industry cycle.

Risk warning: The recovery in industry sentiment falls short of expectations, capacity construction falls short of expectations, and new product development falls short of expectations.