Event: the company released its semi-annual report of 2023, with a single Q2 income of 331 million yuan, yoy-9.6%, with a net profit of 44 million yuan, yoy-16.46%;23H1 with a net profit of 610 million yuan, yoy-3.62%, with a net profit of 87 million yuan, yoy-17.15%, with a GMV75.14 of 100 million yuan, and a slight decline in yoy-31.42% income affected by the table. According to the type of business, the revenue of brand online marketing service 23H1 is 218 million yuan, yoy+3.10%; online distribution is 179 million yuan, yoy+44.08%; brand online management service is 146 million yuan, yoy-39.67%; content e-commerce is 62 million yuan, yoy+23.98%.

It is mainly due to the fact that the disposal subsidiary "Zhejiang Shangbai" during the reporting period is no longer included in the scope of the merger and the income of Zhejiang Shangbai is reduced.

The gross profit margin fluctuates under the influence of changes in the market environment and business structure. In 2023, the overall gross profit margin of H1 company decreased by 7.15pcts to 32.32% compared with the same period last year, mainly due to two factors: on the one hand, the impact of weak consumption on inventory projects is still continuing, although it has increased the cost of related inputs, but it has not yet completely resisted the trend of declining sales, resulting in a decline in gross profit margin of stock business; on the other hand, the proportion of online marketing services of the company's brand has increased during the reporting period.

The concentration of head service providers has been further enhanced, and the global service capacity has been continuously consolidated. During the reporting period, the company added 16 brands, including swiss, Lin Qingxuan, Linefriends, Gao Jiesi, etc., on the basis of ensuring the basic stability of its core stock customers. At the same time, through the continuous expansion of general generation business, during the reporting period, the company added general generation business with the famous British daily chemical brand, the famous Italian beverage brand illy and the American head and oral care brand Jiebi. During the reporting period, the company established a comprehensive and in-depth strategic cooperation relationship with Church Dwight, a well-known American group. The company already has independent Tmall, JD.com, Vipshop Holdings Limited, Pinduoduo, Douyin, Xiaohongshu and Private Business Department. At the same time, the company is also accumulating cross-platform closed-loop marketing experience.

Investment advice: we expect the company to achieve EPS0.84/1.03/1.25 yuan in 23 to 25 years, with the latest share price corresponding to PE being 30.6, 24.9 and 20.6 times respectively, maintaining a "buy" rating.

Risk hints: the recovery of spending power is not as expected; competition in the industry is intensified; brand cooperation is not as expected