Event: the company recently released its Q3 quarterly report for 2023, with an operating income of 950 million yuan, an increase of 20.78% over the same period last year, and a net profit of 769 million yuan, an increase of 41.56% compared with the same period last year.

The main asset management business has improved steadily and is expected to maintain growth in the future. 1) the company has significantly improved its performance in the field of non-performing assets disposal at end B. in the first three quarters, the revenue and return net profit increased by 20.78% and 41.56% respectively compared with the same period last year, deducting 582 million yuan in non-return net profit, an increase of 7.88% over the same period last year.

The steady growth in revenue is mainly due to the company's continued expansion and optimization of non-performing assets business; the sharp increase in fair value change income is due to the increase in the fair value of investment real estate; 2) the total cost increases with revenue, increasing by 61.71% compared with the same period last year. 3) the industry has broad prospects for development, and the state has issued a package of policies to encourage the disposal, revitalization and relief of non-performing assets.

The company takes advantage of the east wind of the times to speed up the operation of light assets, and it is expected that it will continue to give full play to the competitive advantage of science and technology in the future.

A new Ministry of Digital Science and Technology will be added to improve the layout of technology strategy and consolidate core advantages. 1) the establishment of the Digital Science and Technology Department shows the expansion of the company's asset management scale, relying on the advantages of "AMC license + big data + AI technology" to promote the professional, batch and intelligent development of non-performing assets disposal, and the approval of the docking credit information system, so as to promote the expansion of the company's non-performing personal loan business, continuously improve asset disposal efficiency and management capabilities, and stabilize the core competitiveness of technology. 2) holding the established collection company in Guangzhou, enriching the bad disposal methods of individual loans, expanding the business channels such as large banks, and helping to enhance the company's valuation and pricing ability and the comprehensive strength of asset disposal.

The company seizes the dividend of the times, steadily improves its scale efficiency, thickens its performance foundation, and stabilizes its core advantages, so we expect its operating income to be 19.13,34.43 and 5.785 billion yuan respectively from 2023 to 2025, with year-on-year growth rates of 80,80,68 per cent respectively. The net profit of homing was 10.72,14.37 and 1.978 billion yuan respectively, with year-on-year growth rates of 53.13%, 34.01% and 37.67%, respectively. EPS is 0.80,1.07,1.47 yuan per share respectively. With reference to comparable company valuations, we gave the company 14.66 times PE in 2023, maintaining a "buy" rating.

Risk hints: the performance of individual loan non-performing assets does not meet expectations; market competition is fierce; policy uncertainty.