Incident: The company released its 24-year semi-annual report, and 24H1 achieved revenue of 0.081 billion yuan, -7.03% year over year; net profit to mother 0.014 billion yuan, or -34.69% year over year. 24Q2 achieved revenue of 0.056 billion yuan, -17.22% YoY, +125.66% month-on-month; net profit to mother 0.011 billion yuan, -41.36% YoY, +261.30%.

Performance is under pressure in the short term. The year-on-year decline in revenue was mainly due to weak downstream demand. The sharp decline in performance was mainly due to 1) increased depreciation and amortization due to the consolidation of fund-raising projects; 2) Continued increase in R&D investment. 24H1 R&D expenses were 29.95 million yuan, +7.79% over the same period last year. 3) Decrease in cash management benefits.

Gross profit margin declined year over year, and expenses increased year over year. 1) Gross profit margin: 24H1 company's gross margin was 63.58%, -1.48pct year-on-year. Among them, 24Q2 gross margin was 61.21%, -2.71 pct yoy, and -7.72 pct month-on-month. 2) Period expenses: The 24H1 company's period expenses rate was 51.59%, +9.69pct year on year. Among them, sales, management, R&D, and finance expenses were 13.06%, 11.37%, 37.07%, and -9.90%, respectively, +0.28, +3.73, +5.10, and +0.58pct, respectively. The sharp increase in R&D cost rates is mainly due to the company continuing to increase R&D investment. While upgrading and iterating an existing series of products, it continues to carry out new technology engineering and commercialization research, laying the foundation for breakthroughs in core product functions and performance.

The core product matrix was gradually improved, and the application fields continued to expand. 1) Wireless channel simulator: As the company's leading product, the competitive advantage is prominent. With the promotion of domestic 5G-A commercialization and 6G technology pre-development, the company closely follows downstream development trends, conducts research on relevant testing and simulation technology around technical directions such as integration of heaven and earth, and integration of sensing, and provides a laboratory simulation and verification environment. 2) RF microwave signal generator: The customer base is further expanded, customer recognition continues to increase, and batch orders and market opportunities continue to grow. 3) Spectrum analyzer: The product has achieved steady penetration and achieved important breakthroughs among typical customers in some industries. 4) Universal receiver products: Now verified and approved by customers, and batch orders have been obtained. With the enrichment of the company's product matrix, the improvement of system solution capabilities, and the optimization of sales channels, the company's customer base continues to expand.

Profit forecast: Considering the impact of depreciation and amortization on profit, we expect net profit to be 0.079, 0.111, and 0.161 billion yuan respectively in 2024-26, maintaining a “buy” rating.

Risk warning: New product development falls short of expectations; demand volume in emerging fields falls short of expectations, etc.