The content of the incident: after October 27, the company disclosed that the company reported in the third quarter of 2022 that its operating income in the first three quarters of 2022 was 196 million yuan, an increase of 40.80% over the same period last year; the net profit attributed to the parent company was-16 million yuan, and the loss decreased by 68 million yuan over the same period last year. In a single quarter, 2022Q3 achieved an operating income of 78.5278 million yuan, an increase of 17.54% over the same period last year, a net profit of-3.4372 million yuan and a loss of 23.9482 million yuan over the same period last year.

The company's operation is stable and good, and Q3 continues the good situation of Q2. The growth rate of 22Q3's income is basically the same as that of Q2, while the rates of sales expenses and management expenses have decreased slightly compared with Q2, and the rate of R & D expenses has dropped greatly to 6.42pct. The return net profit / operating income has increased from-40.99% in the same period last year to-4.38%. The loss situation has been improved, and the profit and loss balance has been basically achieved in a single quarter. At the same time, the company's Q3 payment was in good condition, and the turnover days of accounts receivable decreased from 348.03 of 22H1 to 291.55.

The company's "Big Universe" product Q3 was unveiled at the trade fair, and the immersive experience without vertigo was widely praised by the audience. The immersive human-computer interaction system of the "Big Universe" product developed by the company was successfully unveiled at the China International Trade in Services Fair, which opened at the end of August. Four games of different kinds were provided for the audience to experience, and the product feedback was good. At one point, the audience waiting for the experience stood in a long line. The product is based on a large-scale immersive human-computer interaction system independently developed by the company, and has functions such as offline large-scale perception of human posture and movement, six-degree-of-freedom game equipment perception, etc. it can realize real human and human-computer interaction and immersive experience without vertigo in large spaces such as the pavilion, and the content can be previewed in advance and distributed remotely on mobile phones and other terminal devices to achieve rapid replacement. The product has a wide range of applications, including but not limited to offline games, museums, exhibitions, art, retail and other scenes; we expect that the product should still need further R & D and improvement in the short term, but combined with the company's strong technical advantages in three-dimensional object recognition, human posture analysis and good development prospects of "meta-universe", it is expected to become one of the company's competitive products, and its business potential is expected.

During the reporting period, the company continued to develop banking business, and the products were updated every five years after the completion of the order. it is expected that banking business can still provide good support for the company's performance in the long run. According to the record sheet of the company's investor relations activities in September, after the delivery of the bank order is completed, the existing products need to be updated every 4-5 years. On the other hand, the data accumulation and usage habits formed by the bank in using the company's products make it have a strong stickiness to the company's products, so we think that customers will still prefer to choose the company's products when upgrading their products. banking business may be one of the company's core business for a long time, or can provide better support for the company's performance.

Investment advice: the company's Q3 performance is steady and good, and we maintain our previous expectations for the company's revenue; at the same time, we speculate that the rate of sales expenses in the first three quarters will be reduced by the short-term impact of epidemic control in Beijing, and the company's sales may be restricted, so we will reduce the cost level in 2022 accordingly. From the adjusted data, the company's profit is better than expected, the loss in 2022 is narrower than previously expected, and we expect the company to achieve apparent profit in 2023. It is estimated that the company's sales per share from 2022 to 2024 are 2.24 yuan, 3.22 yuan and 4.39 yuan respectively. Maintain the company's rating as Buy-B recommendation.

Risk tips: 1, the company's large-scale landing scene in the field of intelligent finance and commercial retail is relatively single, the risk of high customer concentration and income fluctuations; 2, the risk that the company's commercialization in new areas such as sports and health, rail operation and maintenance is less than expected; 3, the risk of being included in the "entity list" by the U.S. Department of Commerce.