The company issued a forecast of the results of the three quarterly reports in 2023: 1) Q3 is expected to achieve a net profit of 4452.33 million yuan, which has far exceeded the level of the same period in 2019 (2019Q3 net profit is 4.558 million yuan), and returned to 63.1% of the same period in 2018. Deducting the non-return net profit of 4377.78 million yuan (Q2 net profit of 2.976 million yuan). 2) the net profit of returning to the mother in the first three quarters of 2023 is expected to be 10 million yuan to 15 million yuan, turning losses into profits compared with the same period last year.

The number of people entering and leaving the country has continued to increase compared with the recovery in 2019. Benefiting from the restoration of the list of the third batch of outbound group tours and the increase in the supply of international flights, the demand for outbound travel of domestic residents continues to pick up. According to the State Immigration Administration, in the first half of 2023, the national immigration administration agencies examined a total of 168 million people entering and leaving the country, returning to 48.8% in the same period in 2019, including 80.276 million mainland residents, about 46.3% in the same period in 2019. The number of people during the Mid-Autumn Festival and National Day holidays was 11.818 million, with a daily average of 1.477 million, returning to 85.1 per cent in the same period in 2019.

Investment suggestion: considering that on August 10 this year, the Ministry of Culture and Tourism will liberalize the third batch of outbound team business countries, while the resumption of supply-side international flights and the procurement of overseas products will also take time, we believe that outbound tours in 2024 will achieve a greater recovery, so take the 2024 performance as a valuation reference, give buy-An investment rating, 12-month target price of 8.1 yuan, equivalent to 30 times the dynamic price-earnings ratio of 2024. Based on the fact that the restrictions on outbound travel have been basically lifted in 24 years, it is estimated that the sales of outbound travel products in 24 years have returned to 80% of the level before the epidemic, while staff cost-side savings have further magnified profits. We estimate that the company's corresponding income in 2023-2024 is 31.91 yuan and 10.093 billion yuan, with a net profit of 0.34 yuan and 261 million yuan.

Risk tips: outbound passenger flow recovery is not as expected, the supply of international flights is not as expected, and so on.