Revenue for the first half of 2024 increased 75.48% year over year, and net profit to mother increased 47.19% year over year. The company achieved revenue of 4.418 billion yuan in the first half of 2024, an increase of 75.48% year on year; net profit to mother was 0.769 billion yuan, an increase of 47.19% year on year. The increase in the company's performance was mainly due to the increase in revenue brought about by the continuous acceptance of the company's orders. The gross margin/net margin was 33.81%/18.19%, with year-on-year changes of -2.83/-2.27 pcts. The decline in profitability was mainly due to: 1) the company transferred the current warranty from sales expenses to operating costs in accordance with accounting standards; 2) the share of revenue from products such as monocrystalline furnaces and screen printing with low gross margins increased. In 2024Q2, revenue was 2.453 billion yuan, up 65.94% year on year, and net profit to mother was 0.436 billion yuan, up 44.80% year on year.

New orders increased 8.74% year over year, and in-hand orders increased 41.11% year over year. The company signed a new order of 6.285 billion yuan (tax included) in the first half of 2024, an increase of +8.74% year over year. As of June 30, 2024, the company's on-hand orders were 14.341 billion yuan (tax included), +41.11% year-on-year. In 2024, the photovoltaic industry faced phased overcapacity, and demand for photovoltaic equipment declined. Against this backdrop, the company's new orders continued to grow, indicating that the company's products were highly recognized by customers.

It successfully developed ultra-high speed 0BB (no main grid) string welding equipment and received 10GW+ orders from leading customers. The company successfully developed ultra-high speed 0BB string welding equipment and completed process verification in many leading companies. The product is compatible with various processes, is suitable for different types of batteries such as TopCon, HJT, BC, etc., and has accurate temperature control capabilities. It is not only compatible with various welding processes such as printing glue first, then curing, or welding and then applying glue to cure, but also to UV glue or other glue processes with different systems. At present, the company has successfully obtained an order for 10GW+ ultra-high speed 0BB string welding equipment from a leading enterprise.

There is plenty of room for domestic replacement of semiconductor packaging and testing equipment, and the company continues to make breakthroughs. According to SEMI forecasts, semiconductor packaging equipment sales will grow 10.0% to $4.4 billion in 2024. Domestic packaging companies still rely on imported manufacturers for their main process equipment, such as bonding machines, scribing machines, AOI, etc., and there is plenty of room for domestic replacement of equipment. In the first half of 2024, the company received orders from IGBT and AOI customers such as Wuxi Xinjie Energy, Fuman Microelectronics, and Qipai Technology. The first batch of orders for semiconductor scribers was obtained. In the future, the company is expected to replace domestic products and open up room for growth.

Risk warning: New PV installations fall short of expectations; industry competition intensifies; new product expansion falls short of expectations.

Investment advice: The company is a leader in photovoltaic string welding machines, expanding into the semiconductor and lithium battery fields. Considering the slowing expansion of production in the photovoltaic industry and the intensification of competition, we lowered our profit forecast for 2024-2026. We expect net profit to the mother for 2024-2026 to be 1.83/2.3/2.762 billion yuan (original value was 1.921/2.515/3.069 billion yuan), corresponding to PE 12/11/10 times, maintaining a “superior to the market” rating.