Event: the company released the three-quarter report of 2023, the total operating income in the first three quarters of 2023 was 940 million yuan, + 19.1% compared with the same period last year, and the net profit was 110 million yuan, + 6.3% compared with the same period last year. The total operating income in the third quarter alone was 280 million yuan, + 43.8% compared with the same period last year. The net profit reached 9.46 million yuan, + 1682.3% compared with the same period last year, and the performance was in line with market expectations.

Tamp the development inside and outside the province and continuously optimize the channel structure. In terms of product structure: the company focuses on the upgrading of product structure and the cultivation of core large items, focuses on the morality of people at the price of 100-200 yuan, actively grabs the share of competitive products, and drives the restorative growth of the market in the province; Gansu market focuses on export-oriented core single products, and the product structure is significantly optimized. Consumption scene: actively seize the restorative growth dividend of consumption scenes such as banquets and tourism. Regionally: actively open up non-provincial markets, Gansu, Beijing companies and other non-provincial market growth rate is higher than within the province, the growth space continues to expand. Channel: actively promote channel transformation in the province, continue to enhance channel thrust; focus on the layout of high-quality group buyers and channel dealers outside the province, and actively accumulate efforts to open up markets outside the province.

The gross profit margin has been further improved and the quality of operation has been significantly optimized. The 23-year order Q3VR 1, benefited from the optimization of product structure, and the gross profit margin increased by 6.6 percentage points to 65.5% compared with the same period last year. 2. The company optimized the channel cost delivery model and improved the cost delivery efficiency, and the sales expense rate decreased by 7.2 percentage points to 28.7% compared with the same period last year. 3. The management expense rate remained stable. Affected by the exchange rate of the US dollar, the financial expense rate increased by 6.3 percentage points to-0.4% compared with the same period last year, while the comprehensive expense rate decreased by 1.0 percentage points to 45.4%. 4. At the end of the third quarter of 2023, the contract debt was 90 million yuan, + 57.9% compared with the same period last year, and the channel confidence was significantly enhanced; the net operating cash flow was 160 million yuan, + 5369% compared with the same period last year, and the operation quality was significantly improved.

The rhythm of deep adjustment is remarkable, and the motivation is full of motivation. The company focuses on upgrading the product structure, continuously promoting marketing transformation, optimizing the incentive model, and adjusting the rhythm significantly: 1. Focus on the virtue of heaven, the virtue of the country, the morality of people, export-oriented and star-rated products. Focus on the virtue of the core products to seize 150-200 yuan price, the release of new products, the positive layout of 300 yuan price, Qinghai comprehensive introduction of national virtue real year products, product layout led to structural upgrading obviously. 2. Innovate the "1x 3N" marketing model, dig deeply the group purchase resources of dealers, focus on promoting the transformation of dealers, focus on superior resources to develop non-provincial markets such as Shanxi, Shaanxi and Henan, and actively expand the growth space. 3, the company equity incentive landed, the award price is 7.12 yuan, the revenue assessment target for 2023-2025 is 1.176 billion yuan, 1.372 billion yuan, 1.568 billion yuan respectively, the incentive is in place, the management potential is strong, and the company's long-term growth ability is optimistic.

Profit forecast and investment advice. It is estimated that the EPS from 2023 to 2025 is 0.28,0.45,0.60 yuan respectively, and the corresponding PE is 53 times, 33 times and 25 times respectively. The company benefits from the upgrading of consumption in the province and the development of markets outside the province, is optimistic about the company's long-term growth ability, and maintains a "buy" rating.

Risk hint: the risk of a sharp downturn in the economy, and the recovery in consumption is not as high as expected.