Incident: The company released its 2024 semi-annual report. 24H1 achieved operating income of 0.594 billion yuan, yoy 4.91%; net profit to mother of 0.055 billion yuan, Yoy 4.91%; net profit to mother of 0.055 billion yuan, Yoy 4.91%; in a single quarter, Q2 achieved revenue of 0.338 billion yuan, yoy 25.46%, or 32.13% month-on-month; net profit to mother 0.028 billion yuan, yoy 51.90%, month-on-month 8.31% The company's performance in the first half of the year was in line with expectations.

Comment:

The recovery of the consumer electronics industry is driving steady growth in the company's revenue. By business: 1) laser revenue of 0.332 billion yuan, accounting for 55.93%, gross profit margin of 39.59%; 2) intelligent equipment revenue of 0.217 billion yuan, accounting for 36.47% and gross profit margin of 38.26%; 3) intelligent equipment revenue of 0.056 billion yuan, accounting for 0.95%, gross profit margin of 5.18%; 4) other main business revenue of 0.386 billion yuan, accounting for 6.50% of gross profit margin of 64.20%. Benefiting from the gradual recovery in demand in the consumer electronics industry and the increase in demand for laser cleaning, the company's laser product sales increased 10.99% over the same period last year.

The gross margin continued to improve, and the cost ratio increased during the period. The company implemented cost reduction and efficiency and optimized the product structure. The company's gross margin in the first half of the year was 40.43%, an increase of 2.47 pct over the same period last year. The company's comprehensive cost ratio for the first half of the year was 28.46%, up 1.35pct from the same period last year. Among them, the sales expense ratio was 7.51%, up 0.79 pct from last year; the management expense ratio was 8.37%, up 0.22pct from last year; the R&D expense ratio was 12.55%, a decrease of 0.18 pct from last year; and the financial expense ratio was 0.03%, up 0.52 pct from last year.

Deeply cultivate new laser technology and multi-industry layout to broaden future growth space. 1) Consumer electronics: camera module testing orders have grown rapidly, and equipment continues to be delivered to test multiple camera core functions; 2) Photovoltaics: perovskite die-cutting equipment continues to receive customer orders for pilot testing machines and 100 MW mass production line equipment, while actively following the tenders for GW grade mass production line equipment in the industry; 3) Lithium batteries: keep up with technical updates for power batteries, such as laser texturing of battery cases, solid state batteries, and the development of lasers required for cylindrical battery processes; 4) Passive components: continue to receive orders from customers in terms of integrated resistors and inductors Capacitor test score The testing and verification of the selection machine is progressing rapidly, broadening the room for future growth? The profit forecast was lowered to maintain the buying rating. Considering the contraction of capital expenditure in the downstream new energy industry, which may partially affect the pace of new orders and revenue recognition; as well as delays in MR deployment, we lowered our 24-26 profit forecast. Net profit for 24-26 is 0.133, 0.173, and 0.22 billion yuan, respectively (0.167, 0.252, and 0.353 billion yuan before the reduction), and the corresponding PE is 22, 17, and 13X, respectively. Considering: 1) The company's main business remains on a steady scale, and the high gross margin testing business is expected to continue to grow rapidly; 2) According to Wind's unanimous forecast, the lasers and equipment sector can compare the average PE values of the companies Ruike Laser and Delon Laser to be 30, 22, and 17X in 24-26, and the company's valuation is lower than the average level of comparable companies, so the purchase rating is maintained.

Risk warning: Risks such as declining laser business prosperity, intensifying industry competition, and falling short of expectations in the new module business.