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Interface News reporter | Pang Yu

After experiencing two consecutive years of declines in both revenue and net profit, the sale of controlling rights of its subsidiary led to a significant increase in the interim performance of Han's Laser (002008.SZ), but the stock price fell instead of increasing.

Han's Laser announced on the evening of August 19 that the company achieved operating revenue of 6.355 billion yuan in the first half of the year, a year-on-year increase of 4.41%; net profit attributable to shareholders of the parent company was 1.225 billion yuan, a year-on-year increase of 184.81%; and non-net profit was 220 million yuan, a year-on-year increase of 15.23%.

The doubling of performance was mainly affected by the transfer of the equity of its subsidiary, Han's Laser. In the first quarter of this year, Han's Laser completed the disposal of the controlling stake of its holding subsidiary, Han's Laser. The transaction confirmed an investment income of 890 million yuan, and the company's net profit attributable to the parent company in the first quarter increased nearly 6 times year-on-year to 989 million yuan.

However, in the second quarter, while the downstream electronics industry continued to recover, the company's performance was not satisfactory, with net profit attributable to shareholders of the parent company being 236 million yuan, down 18% year-on-year and 76% month-on-month.

What is more noteworthy is that despite the recovery in performance, Han's Laser's gross profit margin has not stopped falling. The overall sales gross profit margin in the first half of the year was 33.76%, a year-on-year decline of about 1 percentage point. From a vertical perspective, this is the fourth consecutive year since 2021 that its interim gross profit margin has declined. Compared with the gross profit margin of 40.65% in the 2020 interim report, it has fallen by 6.89 percentage points.

After the release of the interim report, on August 20, the share price of Han's Laser closed down 4.15%, with a cumulative decline of 5.41% this year, and the latest market value of 20.4 billion yuan. Looking at the timeline, the company's title of "Laser Mao" in the secondary market is no longer loud. Since the beginning of 2022, the stock price has been fluctuating downward for a long time, and the cumulative decline has exceeded 60% so far.

Traditional business lacks growth momentum and new business performs poorly

As an equipment manufacturer, Han's Laser's downstream businesses include consumer electronics, PCB, new energy, semiconductors and other industries, and its business development is closely related to the overall operation of the macro-economy.

Behind the performance growth in the semi-annual report, there are also hidden concerns in the performance of various businesses of Han's Laser.

First, the company's traditional business growth momentum remains weak.

Specifically, Han's Laser's main business of general industrial laser processing equipment, as the pillar of its performance, achieved operating income of 2.557 billion yuan in the first half of the year, an increase of about 4% year-on-year.

Affected by weak market demand, the core business has lacked growth momentum in recent years, with revenue almost stagnant in 2022 and revenue of 5.547 billion yuan in 2023, a slight increase of 5% year-on-year.

In the information industry equipment sector, the PCB (printed circuit board) equipment business benefited from the recovery of the downstream consumer electronics market, with operating income increasing by 103% year-on-year to 1.564 billion yuan. However, the consumer electronics equipment business saw its revenue decrease by 9% year-on-year to 787 million yuan amid the warming tone of the industry.

The consumer electronics industry is one of the fields where intelligent manufacturing equipment is most widely used. Han's Laser's interim report pointed out that "in recent years, as the consumer electronics industry faces innovation bottlenecks and the product performance and function update cycle slows down, the update frequency of fixed asset investment in the industry has also slowed down."

Although the PCB equipment business has achieved a relatively high revenue growth, it was achieved on a low base with a deep decline before. In 2022 and 2023, the company's PCB equipment business revenue fell by 32% and 41% respectively. After doubling in the first half of 2024, the revenue of 1.564 billion yuan is still about 300 million yuan lower than the same period in 2021.

Second, in addition to traditional businesses, the semiconductor and new energy sectors, which the company regards as the future "second growth curve", performed poorly.

In the first half of the year, with the semiconductor industry's business climate clearly recovering, Han's Laser's semiconductor equipment (including pan-semiconductor) business achieved operating income of 752 million yuan, a year-on-year decrease of 10%; while the new energy equipment business achieved revenue of 696 million yuan in the first half of the year, a year-on-year decrease of about 40%, mainly affected by the slowdown in production expansion of downstream power battery and photovoltaic manufacturers.

Han's Laser has continued to increase its resource investment in the new energy industry in recent years, but the results have not been as expected. Regarding the decline in the new energy equipment business in the interim report, the company explained: "In terms of photovoltaic equipment, affected by the industry's prosperity, the capital expenditure of downstream customers has been significantly reduced, which has had a significant impact on the company's related equipment orders.

Under various pressures, Han's Laser's development strategy has also caused concerns among investors.

Taking the equity transfer dispute of Han's Laser as an example, the resolution announcement on the asset sale disclosed by Han's Laser on December 14 last year showed that shareholders holding 129,500 shares cast dissenting votes, and shareholders holding 5.8505 million shares abstained from voting. All of the above-mentioned dissenting and abstention votes came from small and medium-sized shareholders.

Regarding the reasons why the company's performance has continued to adjust and has not seen significant improvement in the past three years, Han's Laser responded to investors, "The main reason is that under the influence of complex factors such as industry cycle changes, downstream customers have become more cautious in their investments." Faced with increasingly fierce market competition, the company has, on the one hand, readjusted its organizational structure, and on the other hand, continued to promote digital transformation, improve production efficiency, reduce costs, and strive to return to investors with better performance.

Gross profit margin has declined for four consecutive years

Another hidden worry facing Han's Laser is reflected in the gross profit margin, an important indicator to measure a company's profitability.

Although both revenue and net profit have recovered, the company's gross profit margin has not stopped its downward trend. The overall sales gross profit margin in the first half of the year was 33.76%, a year-on-year decrease of 0.96 percentage points, and a cumulative decrease of 6.89 percentage points compared with the same period in 2020.

Han's Laser did not disclose the gross profit margin of each business in its financial report. However, it can be seen that as the sector with the most impressive revenue growth in the first half of the year, the gross profit margin of PCB intelligent manufacturing equipment business fell by 6.86 percentage points year-on-year. This business accounts for 25% of the company's total revenue.

Han's CNC (301200.SZ), which was spun off and listed on the Growth Enterprise Market two years ago, is the platform responsible for the PCB business of Han's Laser. In the first half of this year, Han's CNC's performance grew positively, but the growth rate of net profit was lower than the revenue performance, and the gross profit margin fell below 30% for the first time, to 29.27%. In the past few years, the performance of the subsidiary has risen and fallen, but the gross profit margin has remained at around 35%.

As the mother of electronic products, the market demand for PCB is positively correlated with the demand for terminal electronic products. Since the fourth quarter of 2023, the downstream consumer electronics market has gradually recovered, and the growth in demand for AI computing power has driven the recovery in PCB demand, driving an increase in orders for Han's CNC's special processing equipment.

However, the cruelty of industry competition cannot be underestimated. According to Prismark's estimates, the revenue and output of the PCB industry will increase by 5.0% and 7.2% respectively in 2024, among which the high-layer boards and HDI boards required for AI servers and switches will grow the strongest, while ordinary PCB boards will still face the situation of price decline due to intensified market competition.