The company released its 2024 semi-annual report, and the margin of loss reversal narrowed. The company's 2024H1 revenue was 0.213 billion yuan, a year-on-year growth rate of 29.02%; realized net profit to mother of -0.053 billion yuan, a year-on-year growth rate of 61.94%; realized net profit deducted from mother -0.081 billion yuan, a year-on-year growth rate of 52.14%. Looking at a single quarter, the company achieved revenue of 0.12 billion yuan in Q2, a year-on-year growth rate of 15.69%; realized net profit of 0.025 billion yuan, up 65.89% year on year; realized net profit deducted from non-mother of 0.04 billion yuan, a year-on-year growth rate of 53.46%; the company drastically reduced losses in the first half of '24, and the company achieved remarkable results in cost reduction and efficiency, and future performance can be expected.

Costs are under pressure in the short term, and gross margin in the field of integrated circuit analysis is rising. The company's expense ratio during the 2024H1 period was 78.23%, down 72.49 pcts year on year; of these, the sales expense ratio was 15.92%, down 4.6 pct year on year; the management expense ratio was 25.43%, down -12.84 pct year on year; the financial expense ratio was -12.83%, down 2.89pct year on year; the R&D expenses rate was 49.71%, down 52.15 pcts year on year; the sharp drop in the cost ratio made the company drastically reduce losses A significant contribution. It is expected that in the future, as the company's revenue continues to rise and the contribution of cost reduction and efficiency increases, the company's profit is imminent.

3D vision sensing has entered a period of rapid growth, and the company is expected to fully benefit. After decades of development, the 3D visual perception industry is still expanding in fields of application. The industry has gone through a period of initial and initial development, and is about to enter a period of rapid growth. The company focuses on 3D visual perception technology research and development, building a “robot and AI vision industry center” in the era of artificial intelligence. It is committed to enabling all terminals to better understand the world. With full-stack technology and rich products, the company has gradually expanded various downstream applications such as biometrics, AIoT, robotics, consumer electronics, industrial vision, and 3D printing. It is expected that many downstream industries such as robotics and 3D printing will enter a period of rapid growth, and the company is expected to fully benefit from this wave of era.

Profit forecast and investment advice: The company's 2024E/2025E/2026E revenue is expected to be 0.575/0.863/1.164 billion yuan, YOY is 59.8%/50.1%/34.8%, respectively; net profit to mother is -0.146/0.013/0.124 billion yuan, respectively, and YOY is 47.2%/108.7%/876.4%, respectively. The company is not yet profitable in 2023, but there is plenty of room for future growth. It is suitable for PS valuation. The company's corresponding 2024E/2025E/2026E PS is 17.22/11.47/8.51 times, maintaining a “buy” rating.

Risk warning: macroeconomic risks, risks where R&D progress falls short of expectations, downstream industry sales progress falls short of expectations, and market competition exacerbates risks.