Introduction to this report:

The performance is in line with expectations; the main business is precision welding to expand the market, and the intelligent automotive manufacturing business enters the Bosch supply chain; AOI inspection expands fields other than solder joints and actively lays out the semiconductor packaging market.

Key points of investment:

Maintaining an increase in holdings rating: Considering that the 3C recovery in 24-25 fell slightly short of expectations, the 24-25 EPS was lowered to 1.10/1.40 yuan (previous value of 1.13/1.49 yuan), and the 2026 EPS was added to 1.74 yuan.

Comparatively, the average PE value for the company in 2024 was 28 times. For prudence, the company was given 25 times PE in 24 years, and the target price was lowered to 27.5 yuan (previous value 28.01 yuan). Maintain an “Overweight” rating.

The performance was in line with expectations. In 2024H1, the company achieved revenue of 0.451 billion yuan/ +11.89%, net profit of 0.119 billion yuan/ +9.42%; deducted from non-return mother 0.097 billion yuan/ +4.87%. The 24Q2 Company achieved revenue of 0.226 billion yuan/ +20.93%, net profit of 0.059 billion yuan/ +10.23%; deducted non-return of 0.048 billion yuan/ +3.48%. 24H1 gross margin and net margin were 49.39%/26.13%, respectively, -1.69pct/-0.76pct year-on-year, respectively. The 24H1 R&D cost rate remained high at 13.43%.

As of the end of June '24, the company's inventory was 0.319 billion yuan, an increase of 40.53% over the end of '23, of which 49.84% were issued.

The main business is precision welding to expand the market, and the intelligent automotive manufacturing business has entered the Bosch supply chain. 24H1 precision welding's main business revenue is 0.338 billion yuan/ +22.59%, and A customers and many foundries are full of orders. Orders for selective wave soldering and laser welding equipment from companies such as BYD and Hesai Technology are showing a growing trend. 24H1 has become a qualified supplier of Bosch automotive electronic automatic equipment, which is expected to drive the company's intelligent automotive manufacturing business to leapfrog development.

AOI inspection expands fields other than solder joints and actively lays out the semiconductor packaging market. 1) AOI inspection: Through high-intensity R&D investment, the company successfully developed AOI multi-dimensional full inspection equipment. From local solder joint inspection breakthroughs to various complex scenarios of PCB&FPC and chip inspection, it became the first batch of full inspection equipment suppliers for major customers, greatly opening up space for the company's subsequent growth. In addition, the company has also completed the development of 3D SPI inspection equipment, and the AOI inspection capability circle continues to expand.

2) Semiconductor packaging: The company's silver sintering equipment, heat-laminating machine, formic acid welding furnace, chip packaging AOI and other equipment have all been shipped. There is a clear trend in the introduction of SiC, which is expected to drive the release of core equipment such as silver sintering. In addition, the company is also actively deploying advanced packaging equipment such as flip mounters.

Risk warning: Policy implementation falls short of expectations, air conditioning production schedule falls short of expectations, and expansion into new fields falls short of expectations.