[Investment points]
The company released its 2023 mid-year report. 23H1 achieved operating income of 1,700 million yuan, a year-on-year increase of 72.33%, and realized net profit not attributable to parents of 179 million yuan, an increase of 188.48% over the previous year. The main reason is that the company is actively developing markets and strengthening contract acceptance efforts. 23Q2 achieved operating income of 934 million yuan, a year-on-year increase of 51.81%, and realized net profit not attributable to parents of 108 million yuan, an increase of 112.46% over the previous year. In terms of cost rate, the company's 23H1 sales expense rate/management expense rate/R&D expense rate/ financial expense ratio were 3.80%/20.80%/6.21%/-0.40%, respectively. The year-on-year change was 0.96 pcts/-4.87 pcts/ +0.93 pcts/-0.03 pcts. The cost rate declined significantly during the period, and refined management was very effective.
23H1's main business bucked the trend, and there were plenty of orders on hand. 23H1 Downstream battery manufacturer investment has slowed down, and the company's workbench/laser welding automation equipment/laser and laser welding machine achieved revenue of 2.82/11.91/109 million yuan, a year-on-year change of -15.94%/+190.28%/-31.87%. Thanks to the company's technical advantages and service capabilities, the company's on-hand orders reached 4.6 billion yuan, an increase of 3.24% over the previous year, contract liabilities of 1,993 billion yuan, an increase of 15.83% over the previous year, and a high 23H2 performance increase can be expected.
The lithium battery business is going overseas, and growth can be expected. As Europe and the US have successively introduced plans to completely replace fuel vehicles with new energy vehicles, and leading domestic battery manufacturers have announced plans to build factories in Europe and the US, the overseas lithium battery equipment market is expected to usher in a period of explosion. According to GGII, the overseas lithium battery equipment market will reach 135 billion yuan in 2025, CAGR = 55.36%. At present, the company's equipment delivery capacity has reached German production standards, and it has supplied laser welding equipment to the German factory in the Ningde era. Furthermore, the company's subsidiary Lianying, has conducted business negotiations with a number of European battery manufacturers, and high-quality overseas orders can be expected in the future.
Various downstream fields have made concerted efforts, and R&D results have been fruitful. 1) In the field of lithium batteries: The company has completed the verification of various welding processes for 46 series cylindrical batteries and successfully developed a high-speed welding process for cylindrical batteries. The welding speed can reach 500mm/s. The company has received an order for mass production of 46 series batteries, which will be delivered soon.
In addition, the CMT welding process for the company's square shell battery module end plate has been verified with customer samples, which can improve performance by 20%. 2) Photovoltaic field: The company is actively developing perovskite laser etching technology for P1-P2-P3-P4 laser etching of perovskite battery components. 3) Vehicle sector: The company's laser brazing technology has been put into use, which can effectively reduce the difficulty of laser welding of automobile bodies and gears.
4) Semiconductor field: Semiconductor bundlers were successfully developed and mass delivery was achieved. The optical communication patch machine was successfully developed for semiconductor mounting chips, and has now been put into use.
[Investment advice]
Considering the company's strong technical strength and smooth downstream expansion, we predict that the company's revenue for 2023/2024/2025 will be 38.20/48.95/6251 billion yuan, respectively, with year-on-year growth rates of 35.33%, 28.17%, and 27.69%, and net profit of 475/6.56/886 million yuan, a year-on-year increase of 77.96%, 38.19%, and 34.94%. The PE corresponding to the current price is 17, 12, 9 times, giving it a “increase in holdings” rating for the first time.
[Risk Reminder]
The industrialization of 46 series batteries fell short of expectations;
Research and development of new equipment is blocked;
Demand from overseas markets fell short of expectations.