Incident: The company released its 2024 semi-annual report. 2024H1 achieved operating income of 1.83 billion yuan, an increase of 12.5% year on year; net profit to mother was 95.83 million yuan, an increase of 6.1% year on year. 2024Q2 achieved operating income of 1.09 billion yuan, a year-on-year increase of 46.0%; net profit to mother was 0.12 billion yuan, up 206.1% year on year, and achieved rapid growth in Q2.

Profitability is steady, and expenses are well controlled. 2024H1, the company's gross margin was 36.3%, and the net margin was 5.4%, all of which remained stable year over year; the cost ratio for the period was 29.7%, -0.5pp year on year. 2024Q2, gross margin was 38.7%, +0.8pp year on year; net margin was 10.6%, year on year +5.9pp; period expense ratio was 25.0%, -4.8pp year on year.

The company continues to promote the construction of a management system, and its profitability is expected to further improve.

The industry boom is picking up, and the consumer electronics business is growing steadily. 2024H1, consumer electronics segment revenue of 1.34 billion yuan, +2.3% YoY. The company is deeply tied to major customers and focuses on key projects such as flexible modular production lines and MR equipment. The flexible modular production line is mainly used in the assembly and packaging of mobile phone frames. At present, this flexible automated production line has been successfully mass-produced. At the same time, the next-generation MR production equipment design plan is currently being tested in the early stages, and proofing is expected to begin at the end of the year.

Globalization continues to advance, and the new energy business is growing rapidly. 2024H1, the new energy sector generated 0.44 billion yuan in revenue, +65.4% year-on-year. The company is product-oriented and focuses on mainstream market segmentation processes. It has now launched equipment such as lithium battery jets, intelligent charging and switching stations, and automobile automation. Among them, intelligent charging and switching station equipment has established long-term stable cooperative relationships with leading companies in the industry. On the basis of large-scale domestic delivery, tunnel cavity liquid injection machines have obtained overseas mass production orders from leading domestic customers. The company closely follows the steps of major customers going overseas and supplying lithium battery special aircraft equipment for their overseas production lines. At the same time, the company deepens cooperation with internationally renowned NEV companies and smart home appliance companies, and continues to expand the scope of cooperation. The new energy business is expected to become the second pole of performance growth.

The focus is on the semiconductor field, and new products are being promoted smoothly. The company continues to increase R&D investment in the semiconductor field, focusing on market segments such as advanced packaging, optoelectronics, and AI computing power. Currently, eutectic mounters can be used in mainstream 400G, 800G, and 1.6T optical module bonding scenarios, and eutectic machines can meet the micron placement accuracy requirements of silicon light.

The company's high-precision eutectic machine products continue to receive orders from international customers, while actively expanding customers in the field of optical communication. Prototype tests have been carried out with 4 new customers and successfully obtained orders from 1 of them. The other 3 prototype tests are progressing smoothly.

Profit forecasting and investment advice. The company's net profit for 2024-2026 is estimated to be 0.5, 0.65, and 0.79 billion yuan, respectively, corresponding to the current share price PE of 18, 14, and 12 times, and the compound net profit growth rate for the next three years will be 26%. The company is a leader in 3C automation equipment in China. At the same time, it is rapidly expanding fields such as new energy and semiconductors. It has strong growth potential and maintains a “buy” rating.

Risk warning: Risks such as high customer concentration, consumer electronics recovery falling short of expectations, new market development falling short of expectations, and exchange rate fluctuations.