Incident: The company released its 2024 semi-annual report. 24H1 achieved revenue of 1.344 billion yuan, a year-on-year increase of 9.16%, and realized net profit of 0.08 billion yuan to mother, an increase of 32.47% over the previous year. 24Q2 achieved revenue of 0.756 billion yuan, up 10.23% year on year and 28.63% month on month; realized net profit of 0.078 billion yuan, up 25.04% year on year and 6456.18% month on month.

24H1 multi-business achieved contrarian growth, and integrated circuits increased significantly. 24H1's metrology/reliability and environmental testing/integrated circuit testing and analysis/electromagnetic compatibility/life science/EHS evaluation services achieved revenue of 3.44/3.18/1.11/0.148/0.23/0.047 billion yuan, with year-on-year changes of +3.4%/+5.4%/+39.8%/+8.0%/+7.8%/-2.4%, respectively; gross margins were 46.1%/44.5%/45.8%/39.5%/0.5%, year-on-year changes of -1.5, - 1.2, +2.7, -2.2, +9.6, -16.9pct By business, measurement business: continuous strengthening of market expansion, steady increase in business volume and rapid growth in aerospace vacuum tank projects against the backdrop of increased competition; reliability and environmental testing: special industries have resumed growth, with some breakthroughs in order development, but the long execution cycle affects some production value delays; integrated circuit testing and analysis: technological improvements and capacity reserves form strong competitiveness, business is growing rapidly, and special services for supply chain safety of Beidou satellite navigation products continue to break through; electromagnetic compatibility: steady growth in business volume against the backdrop of increased competition, aviation airborne business contracts are growing rapidly, and new medical device countries have obtained new medical devices. CMA level qualification; life science: new projects such as food and environment continue to be developed.

Refined management has been fully implemented, and the results of cost control have been outstanding. 24H1 company's sales/management/R&D/finance expenses rates were 16.78%/7.69%/11.32%/0.32%, respectively, with year-on-year changes of -0.12/-0.05/-0.68/-0.43pct.

Investment advice: We expect the company to achieve revenue of 3.404/3.957/4.5 billion yuan in 24-26, and net profit to mother of 0.362/0.379/0.474 billion yuan, corresponding to 20.8/19.8/15.9 times PE, respectively. The company continues to promote refined management, profit-oriented personnel adjustments and cost control, actively lays out in emerging strategic markets such as the low-altitude economy and artificial intelligence, and raised the rating to “Highly Recommended”.

Risk warning: Downstream demand fluctuation risk, industry competition intensifies risk, order execution speed falls short of expectations