Event: The company released the third quarterly report of 2023, realizing total operating income of RMB 941 million yuan from January to September of 2023, with a year-on-year +19.06%; realizing net profit of RMB 106 million yuan, with a year-on-year +6.32%. According to calculation, the total operating income of Q3 in 2023 was RMB 280 million yuan,+43.81% year-on-year; the net profit attributable to parent was RMB 0.09 billion yuan,+1682.25% year-on-year.

23Q3 Company's revenue grew well under the low base, with a year-on-year growth of 43.81%, and contract liabilities increased by 49 million yuan to 92 million yuan year-on-year. During the Mid-Autumn Festival and National Day, the flow of people recovered obviously. In cooperation with brand activities such as cycling around Qinghai Lake, the sales of liquor driven by tourism products also increased.

23Q3 gross profit margin increased by 6.61pct year-on-year to 65.49%, mainly due to a lower base and continued improvement in revenue in the same period last year. 23Q3 Sales expenses diluted under scale effect, sales expense ratio decreased by 7.20pct to 28.74% year-on-year. 23Q3 Management expense ratio/finance expense ratio changed from +0.33/+6.32pct to 15.96%/-0.36%, respectively. Under the comprehensive influence, the net interest rate of 23Q3 parent increased by 3.20pct to 3.37% year-on-year.

Investment suggestion: We believe that the Company will continue to improve its momentum in the third quarter, and the equity incentive target will be achieved with a high probability throughout the year. It is estimated that the company's operating income in 23-25 years will be 11.8/14.3/17.1 billion yuan respectively, with a year-on-year growth rate of 20.4%/ 21.3%/19.0%. It is estimated that the net profit attributable to the mother is 0.9/1.4/210 million yuan respectively, with a year-on-year growth rate of 21.4%/ 55.5%/46.6%, maintaining the "overweight" rating.

Risk hint: the upgrade of product structure is less than the expected risk, competition aggravates the risk, and the expansion outside the province is less than expected risk.