Incident: On January 28, 2024, the company released its 2023 performance forecast. It is expected to achieve annual revenue of 585-605 million yuan, +20.63%-24.76% year over year; net profit to mother of 1.12-122 million yuan, +55.77%-69.71% year on year; deducted non-net profit of 0.64 to 69 million yuan, +8.45% -16.90% year over year.

Full year results are in line with expectations. In terms of median value, the company is expected to achieve revenue of 595 million yuan in 2023, +22.70% year over year; net profit to mother of 117 million yuan, +62.74% year over year; after deducting non-net profit of 67 million yuan, +12.67% year over year, the performance is in line with expectations. On a quarterly basis (median), 23Q4 is expected to achieve revenue of 168 million yuan, +2.46% year over month; +11.15% month on month; net profit to mother of 0.36 million yuan, -8.25% year on year, +37.86% month on month; deducted non-net profit of 20 million yuan, -42.10% year on year, and +31.16% month on month.

Equipment: Changpo Heavy Snow Track, platform-based layout. The company's X-ray inspection equipment can be widely used in various inspection fields such as integrated circuits and electronics manufacturing, new energy batteries, casting weldments and materials, and has now achieved a platform-based layout. At the same time, the company continues to advance technological breakthroughs, realize the industrialized application of high-end online 3D CT inspection technology in various downstream fields, and fully enter the CT inspection era. At the same time, the company is accelerating its global layout and preparing to establish subsidiary (grandchild) companies in Singapore, Malaysia, Hungary, etc., which is expected to significantly increase the company's brand awareness. In the long run, the company is expected to accelerate domestic substitution and help achieve steady growth in performance.

Ray sources: Microfocus ray sources break overseas monopolies. Microfocus ray sources have the characteristics of long R&D cycle, self-research of core equipment, high labor requirements, difficulty in expanding production, etc., and the entry threshold is high. Currently, the global market is dominated by Hamamatsu in Japan and Thermo Fly in the US. At present, the company has the capacity to mass-produce 90/110/120/130kV microfocus X-ray sources, and continues to promote research and development of 150KV closed microfocus X-ray sources, 160KV open microfocus X-ray sources, and high-power, small-focus ray sources to further narrow the gap between core components and foreign countries. Along with the gradual release of the company's newly built production capacity, it is expected to contribute to a significant increase in performance.

Profit forecast: Based on the slowdown in demand in the new energy battery sector, we expect the company's revenue for 2023-25 to be 5.98, 8.11 billion yuan, and 1,135 million yuan, respectively; net profit to mother will be 1.18, 1.79, and 305 million yuan, respectively, maintaining a “buy” rating.

Risk warning: import substitution of radiation sources falls short of expectations; production capacity release falls short of expectations; trade friction intensifies.