Incident: The company released its 2024 semi-annual report. 2024H1 achieved operating income of 0.59 billion yuan, an increase of 34.7% year on year; net profit to mother was 88.19 million yuan, an increase of 398.1% year on year. 2024Q2 achieved operating income of 0.39 billion yuan, a year-on-year increase of 26.0%; net profit to mother was 86.84 million yuan, an increase of 88.0% year-on-year. The company's performance achieved rapid growth.

Various businesses are developing collaboratively, and the aerospace field continues to gain strength. The application field of 3D printing continues to expand, and products are developing from single-piece customization to batch manufacturing. By product, 2024H1, the company's 3D printing equipment and accessories revenue was 0.23 billion yuan, +33.8%; 3D printing product revenue was 0.32 billion yuan, +37.0% year over year, and revenue from 3D printing raw materials was 0.05 billion yuan, +72.6% year over year. By industry, revenue from the aerospace sector was 0.4 billion yuan, +73.7% year on year; revenue from the industrial sector was 0.17 billion yuan, -1.6% year over year. The company continues to be deeply involved in the aerospace field, continuously exploring new markets and new application areas.

The expense ratio improved markedly during the period, and the net interest rate increased markedly. 2024H1, the company's gross margin was 46.0%, -2.2pp; the net margin was 14.9%, +10.9pp; the period expense ratio was 35.5%, -10.2pp, of which sales/management/finance/R&D expenses were -0.6/-6.2/-2.6/-0.9pp, respectively. The year-on-year decrease in management expenses was mainly due to a decrease in share payment fees, and the decline in financial expenses was mainly due to an increase in interest income on bank deposits.

The fund-raising project progressed in an orderly manner, and the release of production capacity opened the ceiling for growth. Construction of plot B of the company's metal additive manufacturing industry innovation capacity building project (Phase III project) began in July 2022, and construction of plots C and D began in March 2024. Since then, construction has begun on all plots of the Platinum Plus Phase III project. Construction of Plot E of the Metal Additive Manufacturing Large-scale Intelligent Production Base Project (Phase 4 Project) began in May 2023, and a commissioning ceremony was held on April 18, 2024. It is expected that after completion, the project will greatly increase the production capacity of customized metal additive products and raw material powders, meet the rapidly growing demand for additive manufacturing in aerospace and other application fields, and meet the company and industry's demand for metal additive manufacturing powder.

Profit forecasting and investment advice. The company's net profit for 2024-2026 is estimated to be 0.32, 0.49, and 0.7 billion yuan, respectively. Corresponding to the current share price PE is 39, 25, and 18 times, the compound net profit growth rate for the next three years is 71%. The company is a leading domestic metal additive manufacturing company with an integrated layout of “materials+equipment+service” and maintains a “buy” rating.

Risk warning: Risks such as reliance on imports for key core devices, concentrated downstream customer areas, and insufficient progress in fund-raising projects.