The company released three quarterly reports, the growth rate of deducted non-net profit in the third quarter is outstanding. ① 2023Q1-3 realized operating income / return net profit / deducted non-home net profit of 19.25 million yuan, 3.46 billion yuan, which was 5.88% higher than that of the same period last year. In a single quarter, ② 2023Q3 realized operating income / return net profit / deducted non-return net profit of RMB 653 + 0.88% plus 9.17% plus 15.5% compared with the same period last year.

In terms of income sub-channels, direct marketing channels and group-buying channels perform better. ① 2023Q1-3 realized revenue of 4.57%, 5.18%, 7.60 million yuan, respectively, compared with the same period last year-3.8%, 1.2%, 5.1%, 3.98%. The revenue of ② 2023Q3 direct sales / franchise / e-commerce / group buying and other channels is 1.45, 1.95, 2.29 and 0.84 million yuan, respectively, compared with the same period last year, which is + 2.14 percent, 0.83 percent, 2.93, 10.54 percent.

The gross profit margin has increased, and the expense rate has fallen steadily during the period. ① 2023Q3 achieves gross profit margin / net return rate / deduction of non-return net profit rate of 55.39%, 19.45% and 17.35%, respectively, compared with the same period last year + 1.54pct/+1.48pct/+2.2pct. The increase in gross profit margin is mainly due to the increase in the proportion of high gross margin products. The sales expense rate, management expense rate, R & D expense rate and financial expense rate of ② 2023Q3 in a single quarter are 25.57%, 4.26%, 3.34%, 0.39%, respectively, compared with the same period last year + 0.21pct/-1.32pct/-0.75pct/-0.09pct.

Inventory is continuously optimized, and the number of days of inventory turnover decreases. The book value of accounts receivable / inventory / accounts payable of ① 2023Q3 is 2.04 billion yuan, respectively, which is + 28.8%, 10.95%, 17.74%, respectively, compared with the same period last year. ② accounts receivable turnover days / inventory turnover days / accounts payable turnover days are 32, 23965 days, respectively, 12 days compared with the same period last year.

Profit forecast: as the leader of the home textile industry, the company leads the market with excellent brand strength and product strength, design process innovation, fine channel management, sustainable development as the goal, showing resilience in the epidemic situation. It is estimated that the company's homing net profit from 2023 to 2025 will be 582 million, 638 million yuan, respectively, compared with the same period last year, + 9.0%, 9.7%, 9.3%, corresponding to the closing price on October 27, 2023, the PE is 12.6X/11.5X/10.5X, respectively, maintaining the "overweight" rating.

Risk hint: Channel expansion is not as expected, terminal retail is not as expected, inventory is overstocked