Introduction to this report:

The company's 2024 semi-annual performance is expected to grow rapidly; executives have continued to increase their holdings recently, demonstrating confidence in the company's long-term healthy development; benefiting from the release of demand in aerospace and other application fields, the company is expected to maintain rapid growth.

Key points of investment:

The target price was lowered to $86.43 to maintain the increase in holdings. The company is a leader in metal additive manufacturing. It has formed an integrated layout of the entire industry chain, combined with the expansion of downstream application scenarios, the market penetration rate has increased rapidly, and its performance is expected to maintain rapid growth. Considering the fluctuation in the pace of downstream demand, we lowered the 24-25 EPS to 1.23/1.82 yuan (previous value was 1.61/2.49 yuan), and the estimated 26-year EPS was 2.54 yuan; considering that the company had high technical barriers, obvious competitive advantage, and certain scarcity in the industry, we gave it 70 times PE for 24 years, and adjusted the target price to 86.43 yuan (previous value was 107.08 yuan) to maintain the incremental rating.

Performance grew rapidly, and the increase in executive holdings showed confidence in long-term development. 1) The company continues to be deeply involved in the aerospace sector and continues to explore new markets and applications. In 2024, H1 is expected to achieve revenue of 0.615 billion yuan (+40.16%); 2) Net profit to mother is estimated to be about 95 million yuan (+77.29 million yuan), after deducting non-return net profit of about 6200 yuan (+61.31 million yuan), which is mainly due to reduced share payment fees and structured deposit income from targeted additional shares to raise capital. 3) According to the company's 2024Q1 performance estimate, 2024Q2 is expected to achieve revenue of 0.409 billion yuan (+33.84%), net profit of 0.094 billion yuan (+102.72%), after deducting non-net profit of 0.076 billion yuan (+132.23%); 3) According to the company announcement, Mr. Xue Lei, the chairman and general manager of the company, has recently continuously increased his shares, demonstrating confidence in the company's long-term healthy development.

The penetration rate of metal additive manufacturing technology has increased rapidly, benefiting from the continued release of downstream demand. Superposition companies continue to promote capacity construction and market development, and the company is expected to maintain rapid growth. 1) Additive manufacturing technology has obvious advantages in small-batch, customized, and complex process product manufacturing. Currently, the industry is in the market introduction period, and the domestic market penetration rate will increase rapidly. 2) The company continues to be deeply involved in the aerospace industry, has a high market share in the domestic aerospace additive manufacturing metal parts product market, forms close cooperative relationships with the subsidiaries of major military industry groups, and participates in supporting the development, production and delivery of various key models of equipment. 3) The company launched a fixed increase project, greatly improving the batch production capacity of customized metal 3D printing products and special metal 3D printing powders, and continued to consolidate its leading position in the industry. 4) The company continues to promote industrial development through technological innovation, continuously increase market development efforts and R&D investment, further improve its technical strength, continue to develop new equipment models, and continuously explore new markets.

Catalysts: Continuously promote capacity building and accelerate the penetration of additive manufacturing technology in 3C and other fields.

Risk warning: The release speed of the new model fell short of expectations, and the progress of technology promotion fell short of expectations.