Q3 revenue decline has narrowed, single-quarter return net profit compared with the same period last year + 7.48%, maintaining the "buy" rating company released three-quarter report, 23Q1-Q3 achieved revenue of 4.458 billion yuan (yoy-15.59%), return net profit of 244 million yuan (yoy-24.59%), deducted non-net profit of 219 million yuan (yoy-11.57%). Among them, Q3 realized revenue of 1.783 billion yuan (yoy-8.71%) and net profit of 142 million yuan (yoy+7.48%). The growth performance of income and profit was significantly better than that of Q2 (Q2 revenue yoy-17.58%,). Considering that the terminal demand is still weak, we downgrade the revenue forecasts of flooring and wood-based panels. It is estimated that the net profit of homing in 23-25 years will be 343 / 394 million yuan (the previous value is 3.56 million yuan 4.21 / 489 million yuan), and the corresponding EPS will be 0.63 yuan 0.72 PE yuan respectively. With reference to the comparable company's 23-year average Wind consensus forecast of 15 times, give the company 15 times PE in 23 years. The target price is 9.45 yuan (the previous value is 10.04 yuan), maintaining the "buy" rating.

Revenue growth is repaired quarter by quarter, and Q4 revenue growth is expected to accelerate.

Affected by the transmission of the real estate cycle and the slow pace of consumer recovery, the performance of consumer demand in the household industry was generally weak in the third quarter. According to the Bureau of Statistics, furniture retail sales in July-September 23 increased by 0.1%, respectively, compared with the same period last year. Since the beginning of this year, due to the weak demand of the industry and the adjustment of its own channel structure, the revenue of wood flooring and other businesses has been under pressure compared with the same period last year. The total revenue of the company's 23Q1/Q2/Q3 is respectively year-on-year,-22.73%, 17.58%, 8.71% and 10.22, respectively. The revenue growth rate has improved quarter by quarter, considering that the revenue base of 22Q4 is not high due to external environmental disturbance (22Q4 revenue is-20.4%). With the Q4 household consumption season catalysis, the company's income growth is expected to accelerate.

The gross profit margin of 23Q1-3 sales increased by 2.27pct, and the net operating cash flow increased from the same period last year + 10.66%23Q1-3 sales gross profit margin increased to 26.4%. We judged that it was mainly due to the downward cost of raw materials. During the 23Q1-3 period, the expense rate increased by 2.25pct to 19.6%, of which the sales expense rate increased to 8.5%, and the management + R & D expense rate increased to 11.7%. The company's sales, management and R & D expenses all decreased in the first three quarters, but the dilution effect on rigid expenses under the downward revenue weakened, resulting in an increase in expense rate compared with the same period last year. The financial expense rate of 23Q1-3 also increased by 0.08pct to-0.7%, mainly due to the increase in interest income. In addition, the operating net cash flow of 23Q1-3 increased by 10.66% to 462 million yuan, and the operating net cash flow performed steadily.

The leader of flooring / wood-based panel industry, looking forward to follow-up management improvement

The company is the double leader of domestic wood flooring and wood-based panel industry, manufacturing end, the company currently has an annual production capacity of 80 million square meters of floor, as well as an annual production capacity of 1.55 million cubic meters of medium and high density board and particleboard, scale advantages to ensure market competitiveness; at the end of marketing, the company has established nearly 3000 floor stores in China, while actively layout online and new retail channels. In the short term, there is a certain disturbance in the company's operation, but in the long run, the brand and scale advantages in the company's industry are still outstanding, and we look forward to the follow-up business improvement.

Risk hint: demand recovery is not as expected, property sales are down, and raw material costs are up.