Incident: The company released its quarterly report for the year 24: Q1-3 achieved operating income of 0.512 billion yuan, yoy 20.03%; net profit to mother of 0.105 billion yuan, Yoy 20.03%; net profit of 0.105 billion yuan, Yoy 44.78%, net profit margin of 45.21%, 5.55pct year on year; net profit margin of 20.52%, yoy 20.03% year-on-year. The results were slightly lower than market expectations.

Comment:

Benefiting from increased demand for X-ray inspection equipment and ray sources, the company's Q3 revenue increased 18% year over year. The company has achieved core technological breakthroughs and mass production in the field of closed microfocus X-ray sources. The product model covers 90kV-150kV, and revenue in the downstream integrated circuit and electronics manufacturing and casting weldments has increased dramatically.

Profitability recovered, Q3 gross profit margin was 44.81%, up 4.07pct year-on-year. The year-on-year increase in gross margin is mainly due to: 1) the company's testing equipment products have been iteratively upgraded, and the revenue share of online and 3D/CT high-end high-margin equipment has increased; 2) the proportion of the company's inspection equipment self-produced radiation sources has increased and costs have decreased. According to the company's investor activity information, the proportion of self-produced radiation sources has increased quarterly, and the proportion of self-produced radiation sources used in the fields of integrated circuits and electronics manufacturing and new energy batteries has all exceeded 90%. At the same time, independent sales of radiation sources have increased year-on-year; 3) The company actively lays out overseas markets, and overseas revenue has increased year-on-year. Relatively high.

The company plans to invest 0.7 billion yuan to expand the production capacity of industrial radiography equipment. According to the company's announcement, the company plans to launch the “annual output of 3,000 sets of intelligent industrial radiation testing equipment” project. The construction period is two years from January 2025 to December 2026, and the funding is from its own capital and bank loans. This expansion of production shows that the demand for inspection in the downstream high-end precision manufacturing industry is increasing, and the requirements for product quality in industries such as integrated circuits, electronics manufacturing, new energy batteries, and auto parts are constantly increasing, and application scenarios are constantly increasing.

Profit forecasting and valuation. Considering the calculation of equity incentives and the impact of increased competition in the industry, we slightly lowered our 24-26 profit forecast. The expected 24-26 results are 0.152, 0.214, and 0.307 billion yuan respectively (the previous forecast was 0.17, 0.241, and 0.322 billion yuan), and the company's current stock price corresponding to 24-26 PE is 44X, 31X, and 22X, respectively. According to the company's investor activity information, the company plans to enrich the product matrix by investing in mergers and acquisitions of advanced testing equipment or core component manufacturers, focusing on the layout of collaborative detection technologies such as optics, ultrasound, magnetic powder, eddy current, energy spectrum, neutron, quantum, etc., while also deepening the cultivation of nanoscale to micron and high-power small-focus X-ray sources, and achieve technological breakthroughs in key components such as magnetrons, RF vacuum tubes, photomultipliers, and photon detectors. The company's synergy in the industrial chain will increase. Therefore, the buy rating is maintained.

Risk warning: The localization and replacement process of key components falls short of expectations, production capacity release falls short of expectations, downstream demand falls short of expectations, risk of market competition, etc.