The company released its 2024 mid-year report

In the first half of 2024, the company's revenue was 1.513 billion yuan, and net profit to mother was 0.029 billion yuan, or -1.11% year-on-year, after deducting non-return net profit of 0.023 billion yuan, or +25.42% year-on-year.

Among them, 2024Q2 revenue was 0.852 billion yuan, +29.04% year over month, +28.88% month on month; realized net profit of 0.02 billion yuan, +3.01% year on year and +100.53% month on month; net profit without return to mother was 0.017 billion yuan, +100.14% year on year and +167.83% month on month.

The company achieved a gross sales margin of 8.86% in 2024H1, +0.66pct year-on-year. Among them, the gross profit margin for 2024Q2 was 9.07%, +0.49pct month-on-month, and +1.38pct year-on-year. 2024H1 invested 59.45 million yuan in R&D, accounting for 3.93% of revenue, +0.39pct year-on-year. The company continues to increase investment in R&D.

Copper and tin substrate blocks: sales increased year-on-year, actively reducing costs and increasing efficiency

Copper substrate block: 1) Volume: The company focuses on developing and increasing key customers, while actively developing and promoting new products and developing new customers. Sales volume in the first half of the year was +13%. 2) Cost: The company's copper-based metal powder sector adopted measures such as equipment transformation and technical improvement to improve the level of standardization and automation of on-site management, and production costs per unit of key products decreased year-on-year. 3) According to the company's investor activity records, the company's thermal conductive copper powder has achieved a breakthrough. It is mainly used to manufacture air-cooled cooling components. It is understood that products developed in cooperation with an end user have now been partially used in AI computing power servers, base stations, large-scale routers, switches, etc., and monthly tonnage supply has been achieved.

Tin substrate block: 1) Volume: The company increased efficiency by stabilizing key customers, continuously developing new foreign customers, and adjusting the product structure to increase efficiency, and sales of solder powder increased 15% of the same caliber. 2) Cost: The company strengthened the collaborative operation and control of products between the two bases in Beijing and Shandong, promoted production line construction and put into use around the new field of microelectronics products, and achieved the same reduction in unit production costs.

Additive sales +163% year-on-year, upgrading production lines to improve production efficiency

Electronic paste field: The company continues to promote technical marketing, promote product iteration while searching for new increases. Sales volume in the first half of the year was +130% year-on-year.

3D printing powder sector: The company focuses on the main circuit and large varieties to expand the market and increase sales volume. Sales of additive manufacturing products in the first half of the year were +163% year-on-year. The company completed the upgrade of the aluminum alloy production line and the construction of a new process production line, improving production efficiency. By building and upgrading production lines, the company reduces dust escape points and makes continuous tracking and improvements.

Thailand base officially put into operation

Thailand base: In June 2024, Youyan Thailand was officially put into operation, and production began to be scheduled according to the number of orders, which will help continue to deepen the company's business layout and improve profitability.

Science and Technology Innovation Center: According to the company's development situation, the science and technology innovation center construction project is progressing steadily in favor of 3D printing and future industries.

Investment advice

We expect the company to achieve operating income of 3.444, 4.003, and 4.019 billion yuan respectively in 2024-2026, with net profit of 0.083, 0.123, and 0.132 billion yuan, corresponding EPS of 0.80, 1.19, and 1.27 yuan/share, respectively. Currently, the corresponding PE price is 36.4, 24.6, and 23.0 times. The company maintained a “buy-A” rating, and the target price for 6 months remained at 47.04 yuan/share, corresponding to about 59 times PE in 24 years.

Risk warning: demand falls short of expectations, project progress falls short of expectations, risk of raw material price fluctuations