Revenue and performance growth reached the highest level since listing from July to September.

From January to September 2012, Jialong shares achieved a main income of 210 million, an increase of 12%, and a net profit of 45 million yuan, an increase of 14%. Revenue and profit grew by 31% and 44% respectively in the third quarter, the fastest growth since going public.

For the first time, the company has entered the Shang Chao channel and started province by province from Henan.

In the past, almost all of the company's products were located in the middle and low end of the business / catering market. Since this year, the company has hired a special consulting company to design a set of products and advertisements aimed at the retail market, focusing on "triple fresh chicken". And since the first launch of Henan market in May, it is expected to increase revenue by 2000-30 million this year. Recently, the company has launched the Shenyang market. If it goes well, the company may enter the Shang Chao of 2-3 provinces in 13 years.

There is a synergistic effect between Shang Chao and business channels, but the marketing cost is growing too fast.

The company's current business channels can provide perfect logistics and technical support for entering Shang Chao, while the establishment of retail brands will bring obvious support to the further expansion of the business market. The channel transformation will be an opportunity for the company to upgrade in an all-round way, but the marketing expenses in the first September have nearly tripled compared with the same period last year, which remains to be seen.

Equity incentive in place, sauce production capacity start-up company is expected to usher in a new long-term

The company's equity incentive for senior executives has been officially launched this year, in which net profit in 12-14 years is required to increase by no less than 6%, 16% and 40% respectively over 11 years. At the same time, the company started to build new sauce production capacity in Guangzhou to further expand the product line, the company may be ushering in a new round of growth period.

Risk hint

Small non-reduction pressure and economic slowdown have a negative impact on food and beverage consumption.

Valuation has reached a reasonable level, maintain the "recommendation"

We believe that the EPS of the company for 12-14 years is 0.24, 0.30, 0.35 yuan, and the net profit is 16%, 24%, 20%, respectively, compared with the same period last year. The current stock price corresponding to the dynamic PE is 24-20-16, the valuation has fallen back to a reasonable range, the company's market share is low, and there is much room for expansion. The valuation should be at a premium, and the "recommendation" should be maintained.

Special note: according to Article 5 of the guidelines on the Information Wall system of Securities companies (China Securities Association [2010] No. 203), our company hereby discloses: as of June 4, 2012 (the day before the date of lifting the ban), our company has invested directly in its subsidiary Guoxin Hongsheng Investment to hold 3.9321 million shares of "Jialong shares" (002495) with its own funds. Since June 05, 2012, it has entered a period of lifting restrictions on sales.