The rapid growth of 23H1's performance is judged by the recovery of demand, the delivery of prior orders and the recovery of gross profit margin. The company issued a performance forecast for the mid-year report in 2023. It is estimated that 23H1 will achieve revenue of 1.51-180 million yuan, an increase of 15.93 percent over the same period last year; net profit of 2800-33 million yuan, an increase of 37.57 percent over the same period last year; and deduction of 2700-32 million yuan of non-net profit, an increase of 62.13 percent over the same period last year. We judge that the revenue growth is mainly due to the restorative growth of procurement demand for downstream equipment at home and abroad, as well as the delayed delivery and delivery of some orders in the past 22 years. The profit growth rate is higher than the income growth rate, on the one hand, the 22H1 gross profit margin is still disturbed and pressured by high raw material inventory, high sea freight, unsmooth supply chain and other factors, the above factors of 23H1 are significantly weakened; on the other hand, the effectiveness of the company's cost control appears.

Optimize the personnel structure and strengthen the cost control. Over the past 22 years, the company has continued to strengthen internal control management, optimize the assessment mechanism, reduce personnel redundancy through the adjustment of organizational structure and personnel structure, and achieve per capita income of 792000 yuan under the pressure of industry demand, an increase of 11.0% over the same period last year. Per capita profit is 121000 yuan, an increase of 1.6% over the same period last year, fully demonstrating management ability in adversity. 23Q1's net interest rate increased by 0.89pct to 14.5% compared with the same period last year. With the strengthening of cost control, demand-side recovery and revenue growth, the company's profitability is expected to be further optimized.

Post-press, textile demand is expected to recover, composite infiltration accelerated. 1) in the textile industry, the company has formed a two-wheel drive business model of single-layer intelligent cutting equipment and multi-layer intelligent cutting equipment. In the past 22 years, multi-layer intelligent cutting equipment has made great improvements in corner accuracy, knife intelligence efficiency, cutting ability and other aspects, and sales have achieved a great increase compared with the same period last year. In June this year, the total retail sales of clothing, shoes, hats, knitwear and textile goods increased by 6.9% year-on-year. From January to June, the cumulative growth rate was 12.8%, and the demand for smart cutting equipment from the textile sector is expected to recover. 2) in the post-press industry, according to CCTV Market Research (CTR) data, traditional outdoor advertising spending decreased by 27.6% in the past 22 years, in which elevator posters showed resilience due to the value advantage of the crowd, but the annual growth was only about 4%, which significantly suppressed the capital expenditure of the post-press industry. The cost of elevator posters picked up significantly from January to May in 23, with an increase of 18.3% over the same period last year. We judge that with the warming of traditional outdoor advertising, the demand for intelligent cutting equipment is expected to be repaired step by step. 3) the company has ploughed the composite material industry for many years, and the equipment has successfully entered many industrial fields, such as new energy, aerospace, photovoltaic, automotive industry, sports equipment, new materials, rail transit and so on. with the continuous growth of the application demand of new materials and the advantageous foundation of the company's early layout of major customer resources, the company's equipment is expected to accelerate penetration in the composite industry in the future.

We have lowered 23-24 intelligent cutting equipment revenue and gross profit margin and introduced 25-year profit forecasts. The company is expected to earn 1.10,1.55,2.12 yuan per share in 2023-2025 (the original 1.45,1.91 yuan in 2023-2024). Based on the comparable company valuation, we believe that the current reasonable valuation level of the company is 29 times 2023 P / E, corresponding to the target price of 31.81 yuan, maintaining the "buy" rating.

Risk hint

The recovery of demand is not as expected, the progress of market promotion of new products is not as expected, and the market competition is intensified.