This report is read as follows:

Q3 profit exceeded expectations, gross profit margin continued to rise, various operating indicators continued to repair, profit margin inflection point has reached the main points of investment:

"increase the holdings" and maintain the target price of 12.03 yuan. To maintain the profit forecast, the EPS from 2022 to 2024 is 0.65,0.51,0.76 yuan respectively. Maintain the target price of 12.03 yuan and maintain the "overweight" rating.

Continue to make profits, profits exceed expectations. In the first three quarters, the company achieved operating income of 2.23 billion yuan, an increase of 9.11% over the same period last year, of which Q3 alone achieved revenue of 770 million yuan, an increase of 9.21% over the same period last year. In the first three quarters, the net profit was 442 million yuan, an increase of 21787.78% over the same period last year, of which single Q3 realized a net profit of 43.9146 million yuan, reversing losses over the same period last year, and the profit level exceeded market expectations.

The income statement continued to be repaired and all indicators improved. First of all, the company's comprehensive gross profit margin increased by 3.67% to 30.01% compared with the same period last year, mainly due to the improvement of self-developed products with high gross margin and the improvement of the proportion of implementation, as well as the improvement of stack implementation efficiency. Second, the impact of the first three quarters of foreign exchange has changed from negative to positive, contributing 3 per cent to the profit margin on financial expenses. In addition, asset impairment losses have also declined compared with the same period last year, the losses transmitted by subsidiaries have also decreased compared with the same period last year, and loopholes in the income statement are constantly being repaired. To sum up, in the first three quarters, the deduction of non-net profit was 81.2302 million yuan, and the deduction of non-net interest rate increased 7.58pct over the same period last year.

Do not underestimate the importance of implementers in the digital tide. Under the digitization tide, the product manufacturer is often the first object that the market pays attention to, while the status of the implementer is easy to be underestimated. Implementing manufacturers, especially in the large enterprise market, plays an important role and is a necessary link between product manufacturers and customers. In addition to the steady growth of pan-ERP business, the company continues to develop the ERP epitaxial IT demand of enterprises, and the sales and implementation of independent products are expected to maintain high growth.

Risk tips: macroeconomic fluctuations, rising labor costs, the promotion of self-owned products is not as expected