[investment points]

The impact of the epidemic led to short-term pressure on the business. 2022Q1 achieved revenue of 53.982 million yuan, down 5.7% from the same period last year, mainly due to the repeated influence of the epidemic, and the overall operating situation of the company did not change significantly compared with the same period last year; the net loss of homing was 15.341 million yuan, compared with 3.933 million yuan in the same period last year, mainly due to the impact of equity incentive costs. The company's gross profit margin was 16.9%, down 17.6% from the same period last year, mainly due to the fact that the export of epidemic prevention materials was not carried out this year; the sales expense rate was 2.5%, an increase of 0.5% over the same period last year; and the management expense rate was 31.3%, an increase of 21.9% over the same period last year. The main department confirmed the equity incentive cost during the reporting period; the R & D expenditure rate was 7.6%, an increase of 3% over the same period last year, and the company continued to increase investment in R & D.

The sports industry takes advantage of the east wind, and the new business sets sail. In recent years, the state issued the "National Fitness Program (2021-2025)", "14th five-year Plan" and other policies to promote the development of the sports industry. The Winter Olympic Games to be held at the end of 2021 and the Asian Games expected to be held this year will further enhance public fitness awareness and boost industry sentiment. At the end of 2021, the company signed the Strategic Cooperation Framework Agreement with China Sports Federation and China Sports Press in Beijing to further cooperate in various fields. On April 28, 2022, the company jointly launched the first National Community Intelligent AI Games, covering more than 200 cities, and the number of participants is expected to exceed 5 million. Under the influence of epidemic prevention and control, the business is expected to benefit from the home dividend and enhance the market awareness of Yueyun. The company's national fitness business has gradually landed, and in the future it will achieve two-wheel drive with traditional business, covering both online and offline scenarios, so as to benefit more from the recovery of the industry.

[investment advice]

The company is a leader in the racing industry, in recent years, the digital layout of national fitness business, continue to cultivate the sports industry. The repeated impact of the epidemic has led to pressure on the company's traditional business, while the new business is gradually falling to the ground. We are optimistic about the recovery of the company's traditional business and the rapid development of the company's national fitness business after the normalization of epidemic prevention and control, and maintain the company's previous profit forecast. We forecast that in 2022-24, the company's income will be 4.21 yuan, 615 yuan, 707 million yuan, and the net profit will be 0.33 million yuan, 0.65 trillion yuan, EPS0.2/0.41/0.49 yuan per share, corresponding to PE50/25/21 times, and maintain the "overweight" rating.

[risk Tip]

Epidemic prevention and control intensified

The development of new business is not as expected.