Event: on September 20, Lotus Health went to Qianjiang Century City, Hangzhou to discuss matters related to the settlement of the Intelligence Center project in Turing Town. The company said that at present, the company initially plans to build an intelligent computing cluster with a scale of about 5000 PetaFlops in the first phase and about 30000 PetaFlops in the future.

Multi-measures and rapid repair of the main business to release the vitality of growth. The company is an established leading company of monosodium glutamate, with profound brand, quality and channel advantages. in recent years, the company has deepened its reform and reshaped the company's mode of production and operation through brand construction, "platform +" strategy and optimization and adjustment of product structure. and through promoting the reform of the system and mechanism, improve the organizational structure, stimulate the innovative vitality and enthusiasm of employees. Actively carry out the construction of youth, digitalization, internationalization, intelligence and scene, empower the company's marketing work through digital construction, combine with the company's strategic products and the development of new products, continuously introduce traffic and enhance the effective transformation of flow, actively enhance the influence of Lotus brand and sales revenue. In the first half of the year, a series of measures taken by the company were gradually reflected in revenue and profit, realizing operating income of 974 million yuan, an increase of 13.15% over the same period last year, and a net profit of 50.1596 million yuan belonging to shareholders of listed companies, an increase of 57.23% over the same period last year. The net profit belonging to shareholders of listed companies after deducting non-recurring profits and losses was 50.6367 million yuan, an increase of 58.90% over the same period last year.

Explore the second growth curve and make preliminary plans for the construction of the intelligent computing center. On June 30, Hangzhou Lotus Science and Technology Innovation Co., Ltd., a wholly owned subsidiary of the company, was established with the legal representative of the president of the company and a registered capital of 120 million yuan. It is positioned to integrate the resources of manufacturers in the industry and introduce strategic partners to jointly develop intelligent computing centers and related business markets. On September 4, he went to Xinhua Group 3 to exchange and discuss work, and held talks with senior executives of Xinhua Group 3. On September 20, the company went to Qianjiang Century City, Hangzhou, focusing on matters related to accelerating the settlement of the Intelligence Center project in Turing Town. The company said it plans to build a world-class intelligence center at the main computing nodes in China. At present, it is initially planned to build an intelligent computing cluster of about 5000 PetaFlops in the first phase and 30000 PetaFlops in the future.

Strategic cooperation with Xinhua III may provide support for the development of intelligent computing. Guohou assets under the control of the company is a professional organization specializing in rescuing and rescuing enterprises in distress. it has participated in the reorganization of Ziguang Group and established a close cooperative relationship with Ziguang Group; in terms of customer development, the company's largest shareholder is Wuhu Liantai Investment, which is also the intelligence center of the Yangtze River Delta, and Anhui Province has gathered a number of industry leading enterprises such as NIO Inc. and iFLYTEK. In addition, the company reached a strategic cooperation with Xinhua three groups on the construction of intelligent computing center and personnel training on September 12. According to the strategic agreement, Xinhua three groups rely on their own technological advantages in the fields of artificial intelligence, large model, storage, network, 5G, security, terminal, etc., and join hands with Lotus Health to build a leading and international first-class intelligent computing center. To meet the computing needs of general large models, autopilot, robots, meta-universe, games, media and other application industries. At the same time, based on its own digital practice and talent echelon construction experience, Xinhua San will provide talent training services for the construction and operation of the Intelligence Center, so as to ensure the stable operation of the Center in the future.

Investment suggestion: the company is a national enterprise focusing on R & D, production and sales of condiments and health food. its main business recovers quickly and actively explores the second growth curve in addition to the advantageous areas such as health industry and large consumption. we believe that the company will maintain steady development for a long time in the future. Based on the principle of prudence, this performance forecast does not include arithmetic performance. It is predicted that the company's income for 2023-2025 will be 2151q3424max 5575 million yuan, an increase of 27.2%, 59.2% and 62.8% over the same period last year. The net profit of the company will be 1.14% / 2.01pm respectively, an increase of 148% / 75.9% / 68.7% over the same period last year, corresponding to EPS 0.06 / 0.11 / 0.19 yuan PE 81.8 / 46.5/ 27.5 If the 5000 PetaFlops planned in the first phase and 30000 PetaFlops in the long-term plan are landed, it will contribute an additional 600 / 3.6 billion revenue increment to the company according to the estimate of 120,000 yuan / P / year, and is expected to bring 150 million / 900 million profit increment. Cover for the first time, giving a "buy-B" rating.

Risk hint: the business of Lotus Science and Technology Innovation Company, a wholly-owned subsidiary, is still in the planning stage, there is no technology and personnel reserve, and there is no substantive business development for the time being; the market competition continues to intensify; the main business development is not as expected.