The profit level is under short-term pressure, the business model ensures long-term development, and the "buy" rating is maintained. Jinpu Garden released its report for the third quarter of 2023, with revenue and return net profit of 590 million yuan / 40 million yuan respectively in the first three quarters, compared with the same period last year. 23.7%. The main reason for the decline in net profit is the increase in financial expenses and minority shareholders' profits and losses in the issuance of convertible bonds. we believe that the company's focused "five-in-one" business model can lock in profits earlier and will ensure the long-term development of the company on the premise of abundant orders. We maintain the profit forecast and expect the company's net profit to be 0.9,1.0 and 130 million yuan in 2023-2025. Diluted EPS is 0.55, 0.65, 0.80 yuan, the current share price corresponding to PE is 20.7,17.5,14.2 times, maintaining the "buy" rating.

Revenue became regular compared with the same period last year, and gross profit margin remained stable.

In the first three quarters of 2023, the company achieved operating income of 590 million yuan, an increase of 3.3% over the same period last year. The overall gross profit margin carried forward is 29.7%, which is basically the same as that of 30.0% in the first half of 2023. We believe that the reason why the company's gross profit margin can remain stable in the overall downward environment of the industry is mainly due to: (1) the company's competitiveness lies in the "five-in-one" business model that focuses on the overall improvement of the ecological environment, which can lock in large orders earlier, avoid the impact of short-term market fluctuations and ensure long-term returns; (2) the company's real estate business is less and is limited affected by the real estate downward cycle.

The collection of accounts receivable is accelerated, and the operating capacity continues to improve.

The company's business scale continued to expand, with total receivables of 1.15 billion yuan by the end of the third quarter, an increase of 3.7% over the same period last year (1.11 billion yuan in the same period in 2022). We believe that its operational ability is still guaranteed: (1) the company continues to strengthen its ability to recover accounts receivable with a credit impairment loss of 5.344 million yuan in the first three quarters, which is significantly lower than that of the same period in 2022 by 78.1%; (2) the turnover rate of accounts receivable is 0.13 to 0.53 higher than that of 2023H1, and asset flows continue to improve; (3) the company mainly serves the government and its platform companies, and the risk of default is small.

During the period, expenses improved, and minority shareholders' profits and losses dragged down the return profit company to strengthen cost control, with a total expenditure of 100 million yuan during the first three quarters, down 1.5% from the same period last year.

Among them, the management rate and R & D rate decreased by 1.0pct, 1.3pct to 9.9% and 3.7% respectively compared with the same period in 2022, while the increase in financial rate from 1.5pct to 3.2% was mainly due to the short-term impact of interest amortization of convertible bonds on financial expenses. The proportion of project rights and interests carried forward by the company decreased, and the profit and loss of minority shareholders in the first three quarters was 9.123 million yuan, an increase of 448.0% over the same period in 2022, and finally achieved a net interest rate of 7.1%, a decrease of 2.5 percentage points compared with the same period in 2022.

Risk tips: market recovery is not as expected, capital pressure and the risk of bad debt losses.