Event: the company released its three-quarter report in 2023, with operating income of 1.06 billion yuan in the first three quarters, down 4.6% from the same period last year, and net profit of 33.11 million yuan, down 11.1% from the same period last year. 2023Q3 realized operating income of 390 million yuan in a single quarter, down 0.3% from the same period last year, and realized a net profit of 15.53 million yuan, an increase of 9.9% over the same period last year.

The product matrix is rich, and the Asian Games help to improve the brand. 1. In terms of categories, the company has a rich product matrix, with more than 400 SKU, and three major bean products series can achieve production and sales coordination, forming a pattern based on fresh bean products, plant protein drinks and leisure bean products as the focus of development, and other kinds of products as the supplement. 2. From the perspective of different channels, the company deeply ploughs Jiangsu, Zhejiang and Shanghai, and covers most of the provinces in the country at the same time. The company's main sales model is distribution, and the terminals include farmers' markets, breakfast stores, small supermarkets, convenience stores, etc.; in addition, the company cooperates closely with large-scale supermarkets and chain restaurants. 3. The company has become the official supplier of bean products for the Hangzhou Asian Games and the Asian Paralympic Games, which is conducive to further improving the brand image.

Profitability is under pressure. 1. The overall gross profit margin in the first three quarters of 2023 was 26.5%, an increase in 1.7pp compared with the same period last year. As the purchase price of soybeans stabilizes and falls, the gross profit margin will gradually improve. 2. In the first three quarters, the sales expense rate was 15%, an increase of 0.5ppp over the same period last year; the management expense rate was 4.8%, an increase of 0.3ppm over the same period last year; the R & D expense rate was 0.8%, an increase of 0.3ppp over the same period last year; and the financial expense rate was 1.2%, an increase of 0.4pp over the same period last year, mainly due to the increase in interest expenses and the decrease in exchange earnings. The overall net interest rate was 3.1%, down 0.2pp from the same period last year.

Subsidiaries in Beijing, Shanxi and Guizhou have been officially established, and national expansion has been continuously promoted. The establishment of Beijing ancestral name, Shanxi ancestral name, Guizhou ancestral name, the company's shareholding ratio is 50.83%, 51.13% and 51.00% respectively, and the partners are Beijing Xiangxiang, Taiyuan Golden Soybean and Guizhou Fangxin respectively, with an investment of 61 million yuan, 68 million yuan and 55.08 million yuan respectively, moving towards a new stage of nationalization, and looking forward to stepping into a new track of development after the standardized operation of the invested companies. While ploughing Jiangsu, Zhejiang and Shanghai, the company will continue to focus on expanding the Yangtze River Delta, Beijing-Tianjin-Hebei, Pearl River Delta and central China provincial capital cities, and the medium-and long-term development logic will be further strengthened.

Profit forecast and investment advice. It is estimated that the net profit from 2023 to 2025 is 43.82 million yuan, 70.81 million yuan and 92.86 million yuan respectively, the EPS is 0.35,0.57,0.74 yuan respectively, and the corresponding dynamic PE is 59 times, 36 times and 28 times respectively, maintaining the "buy" rating.

Risk tips: soybean prices continue to rise risk; project landing or less than expected risk.