Key investment points

Third-quarter results continued to grow, and optical inspection continued to advance. The increase in the company's performance in the third quarter was mainly due to increased revenue from the camera module photoelectric active inspection business. At the same time, the laser business maintained steady growth, making a steady contribution to profit growth. Since the company began cooperation with North American customers in the optical inspection business in 2014, after years of development, project cooperation with customers has gradually expanded into a wider and deeper field. Currently, it mainly focuses on several aspects: 1. The camera module inspection business has benefited from factors such as customer camera technology iteration, the popularization of high-end camera technology, and the vigorous expansion of production by domestic module manufacturers, which has brought about more equipment demand. At present, the company has fully covered all camera module testing projects and is actively undertaking equipment requirements for module inspection automation, which is expected to bring continuous performance growth to the company in the next two years. 2. The VCSEL chip module testing business has developed new testing equipment in response to customer update needs, and the prototype has now been verified by customers. The company will actively seek to simultaneously supply equipment at domestic and foreign foundries to speed up the process of equipment going overseas. 3. The MR optical inspection business continues to cooperate exclusively with customers to promote the research and development of AR equipment related testing processes. Currently, there are a large number of research projects, and most pre-development models will be delivered within the year.

The advantages of the laser business continue to be reflected, and the new energy business is developing steadily. The company's laser products are mainly used in consumer electronics, new energy and other fields for refined processing requirements, and have advanced technology application characteristics of high customization. As a basic tool for advanced manufacturing, the company's laser products continuously replace traditional processing methods while reducing costs and increasing efficiency for customers, and fully realize domestic replacement of laser processes in new application scenarios that are constantly being developed. Furthermore, since the strategic adjustment for continuous light lasers in the second quarter of last year, through product line personnel and structural optimization, the product focus has changed from metal sheet metal cutting to fields such as power battery laser welding and metal 3D printing, and product profitability has continued to be repaired. Looking ahead to the whole year, the company remains optimistic about the continued increase in the growth rate of laser revenue. Although overall demand for equipment has declined in the new energy business due to the slowdown in production expansion in the new energy business, the company continues to be optimistic about business development opportunities in the new energy sector. Since this year, in addition to continuing to simultaneously supply lasers to leading customers in the industry according to their process changes, the company has achieved breakthroughs in various areas such as real-time feedback modules for laser processing, energy storage battery processing, and flat wire motor processing. With the accelerated upgrading of customer production lines and the increase in overseas demand, the company's new energy business is expected to continue to grow throughout the year and the next few years.

Investment advice

We expect the company to achieve revenue of 1.4/1.8/2.1 billion yuan in 2024/2025/2026, and realized net profit of 0.15/0.21/0.26 billion yuan respectively. The current stock price corresponding to 2024-2026 PE is 33 times, 23 times, and 19 times, respectively, covered for the first time, giving it a “buy” rating.

Risk warning

The risk of an unstable international trade environment; the risk of technological upgrading and iteration; the risk of R&D failure; the risk of technology failure to form a product or achieve industrialization; the risk of high customer concentration and the risk of major customer dependency in the laser/optical intelligent equipment business; the risk of brain loss; the risk of loss of money and bad debts.