The company's 2024Q2 revenue increased month-on-month, with significant month-on-month performance improvements. Maintaining the “Buy” rating company's 2024 semi-annual report, 2024H1 achieved revenue of 0.694 billion yuan, YoY -0.29%; net profit to mother of 0.076 billion yuan, YoY -43.88%; deducted non-net profit of 0.036 billion yuan, YoY -65.52%. Among them, 2024Q2 revenue was 0.449 billion yuan, YoY +10.31%, QoQ +84.02%; net profit to mother 0.06 billion yuan, YoY -13.73%, QoQ +275.54%; deducted non-net profit 0.027 billion yuan, YoY -41.75%, QoQ +214.52%. Considering the pace of equipment order delivery, we lowered the company's profit forecast for 2024-2025 and added a profit forecast for 2026. The estimated net profit for 2024/2025/2026 is 0.325/0.455/0.608 billion yuan (previous value: 0.41/0.579 billion yuan), and 2024/2025/2026 EPS 1.62/2.27/3.04 yuan (previous value 2.98/4.20 yuan). The current stock price corresponds to PE 38.3/27.4 /20.5 times We are optimistic that the company's domestic market share will continue to increase and maintain its “buy” rating.

Order delivery and acceptance progressed smoothly. High R&D expenses affected short-term net profit companies' 2024H1 revenue was basically flat year over year, mainly due to: (1) the 2024Q1 revenue was only 0.244 billion yuan, or -15.27% year-on-year; (2) the 2024Q2 company's order delivery and acceptance situation was good, which contributed to a good improvement in 2024H1's overall revenue. 2024H1 net profit declined year on year, mainly due to (1) 2024H1 R&D expenditure of 0.117 billion yuan, +52% year over year. The company continued to increase R&D investment in fields such as front-end track, front-end chemical cleaning, and back-end advanced packaging, but R&D products have yet to be sold on a large scale; (2) the increase in the number of employees in 2024H1, share payments and sharing, etc., led to a +35.87% year-on-year increase in management expenses and sales expenses.

New orders have maintained high growth. High-temperature sulfuric acid cleaning equipment is expected to break through the foreign monopoly 2024H1 company's new order of 1.219 billion yuan, +30% over the same period. New orders for front-end coating, advanced packaging and small-size temporary bonding and unbonding for new products used in the Chiplet field increased more than tenfold year over year.

By the end of June 2024, the company's on-hand orders exceeded 2.6 billion yuan, a record high. The company's Qiandao Chemical Cleaning Machine went to the client to carry out process verification at the end of August 2024. It is expected to break the absolute monopoly of foreign leaders on high-temperature sulfuric acid cleaning technology, promote the future of the company's Qiandao chemical cleaning equipment and Qiandao adhesive development equipment to form two main advantage products, and provide a stable performance growth point for the company's future development.

Risk warning: The recovery in industry sentiment falls short of expectations, the progress of production expansion falls short of expectations, and technology research and development falls short of expectations.