Events. According to Changyu's quarterly report for 22 years, Q1-Q3 achieved revenue of 2.81 billion yuan in 22 years, an increase of 5.2% over the same period last year; net profit of 430 million yuan, down 3.8%; and non-return net profit of 410 million yuan, down 2.1% from the same period last year. In 22, the revenue of Q3 was 860 million yuan, an increase of 7.7% over the same period last year; the net profit of return to the mother was 80 million yuan, down 4.8% from the same period last year; and the net profit of non-return was 70 million yuan, an increase of 0.8% over the same period last year.

The scale of revenue has been gradually repaired, and the impact of the epidemic is still emerging. The revenue of 22Q1-Q3 was 79.7% of that of the same period before the epidemic (2019), which increased 4.0pct over the same period last year, and deducted the non-return net profit to 59.6% for the same period before the epidemic, a decrease of 2.4pct over the same period last year. 22Q1-Q3 's gross profit margin was 57.5%, down 0.7pct from the same period last year, mainly due to repeated increases in raw materials and packaging materials in the second quarter, and gross profit margin dropped sharply to 50.9% 5.6pct 22Q3. Due to the weakening of the interference of the epidemic and the gradual repair of the consumption scene, the gross profit margin increased 1.1pct to 56.5% compared with the same period last year.

The market investment is increasing, and the performance is under short-term pressure. The sales expense rate / management expense rate of 22Q1-Q3 is 23.4% and 7.0%, which is lower than that of the same period last year. The sales expense rate / management expense rate of 22Q3 is 28.0% 8.2%, which is + 3.3pct/-1.6pct compared with the same period last year. It is inferred that the increase in the proportion of marketing expenses and advertising expenses is mainly due to the company's efforts to strengthen terminal mobile sales and marketing. 22Q1-Q3/22Q3 reduced its net interest rate by 8.8% to 15.5% compared with the same period last year. The increase in expense rate and the decline in gross profit margin have led to a slight pressure on the company's performance in the short term. in addition, we speculate that the company's continued expansion in overseas markets and the increase in the proportion of low gross margin income have also led to a slight decline in the company's gross margin and net profit margin.

The leading advantage is still stable, and the brand can continue to make progress. In recent years, the domestic wine market has been impacted by other kinds of wine and imported wine continues to expand, the scale of the industry continues to shrink, and the clearance of small and medium-sized enterprises is accelerated. From January to June 2022, the revenue of domestic wine enterprises reached 3.85 billion yuan, down 11.8% from the same period last year, and the total profit was 80 million yuan, down 44.5% from the same period last year. As the leader of domestic wine, the company actively adjusts its strategy, arranges the brandy business and expands the foreign wine market to disperse the overall business risk. Up to now, the company's seven major business departments have basically taken shape, making full preparations for the follow-up market development. In terms of brand promotion, this year marks the 130th anniversary of the founding of Changyu, and the company presents to the 130th anniversary. Changyu has selected 34 wines to participate in the International Wine (China) Grand Prix. Through activities such as wine-themed open-air movies summer reception and tipsy night music reception, we will increase brand promotion and improve our awareness and reputation.

Investment advice and profit forecast. Due to the recurrence of the epidemic, the short-term demand for wine is still uncertain. we estimate that the company's revenue will be 42.0 shock 46.7 / 5.32 billion in 2022-2024 and 1.11 yuan per share in 2022-2024 EPS (the previous value is 0.79max 0.95 pound 1.15 yuan per share). With reference to the comparable company's average PE of 30 times in 2023, and considering that the company is in a leading position in wine, the company will maintain 35 times PE in 2023, and the target price will be lowered from 33 yuan to 31 yuan, with a "better than the market" rating.

Risk hint: economic downturn affects middle and high-end spirits, epidemic situation exceeds expectations, and food safety.