This report is read as follows:

Q3 is affected by the consumption environment and consumption power, the performance of high unit price products is poor, channel expansion slows slightly, superimposed personnel expansion, new factory amortization lead to a decline in quarterly revenue and profits, new production capacity is expected to usher in follow-up improvement.

Main points of investment:

Maintain the overweight rating. Q3 performance is under pressure, consumption power needs to be improved, new production capacity to break the bottleneck, looking forward to the follow-up development. The EPS for 2023-2025 will be reduced to 1.06,1.31,1.58 (- 0.21) yuan, and the target price will be maintained at 45 yuan.

Q3 is under pressure, lower than expected. From January to September, the camp earned 619 million yuan, + 1.92% year-on-year, 107 million yuan,-2.90%, 104 million yuan, + 4.75%, + 4.75%,-11.89%, 32.5289 million yuan,-18.76%, 31.6249 million yuan, 16.93%, respectively.

Beef and shrimp declined significantly, while channel expansion slowed down slightly. In terms of category, Q3 single quarter meat and poultry 138 million yuan, year-on-year-14%, aquatic products 51.5052 million yuan, year-on-year-12%, subdivided categories of performance differentiation, which is expected to be mainly affected by the weakening consumption power, of which high-guest beef meat and shrimp are-23% and-30% respectively compared with the same period last year. Low-guest single category poultry, pork and fish have the same scores of + 3%, + 9% and + 9%, respectively. In terms of different channels, Q3 single-quarter C terminal 133 million yuan, year-on-year-11.04%, of which franchise stores 109 million yuan, year-on-year-6.43%, as of the end of Q3, 1798 franchise stores, a net increase of 25, the pace of store expansion slowed down; B-end wholesale 53.3328 million yuan, year-on-year-25.41%.

Expenses are a drag on earnings and look forward to follow-up improvement. Q3 single-quarter gross profit margin is 26.2%, year-on-year + 2.39pct, expected to be mainly cost improvement, sales expense rate 5.9%, year-on-year + 2.30pct, management expense rate 6.6%, year-on-year + 2.61pct, expense-side impact is expected to increase personnel expansion, increased amortization of new capacity, etc., the final Q3 net profit rate of 16.1%, year-on-year-1.36pct. At present, the company's new production capacity has officially landed, providing a guarantee for follow-up development, and looking forward to the follow-up gradual recovery to usher in improvement.

Risk tips: food safety risks, intensified competition in the industry, large cost fluctuations, and so on.