Event: the company released its Triple report for 2023. In the first three quarters of 2023, the company achieved revenue of 619 million yuan, + 1.92% year-on-year; net profit of 107 million yuan,-2.90%; and non-return net profit of 104 million yuan, + 4.75% of the same period last year. In the third quarter of 2023, the company achieved revenue of 202 million yuan, year-on-year-11.89%, net profit of 33 million yuan, year-on-year-18.76%, and non-return net profit of 32 million yuan,-16.93% of the same period last year.

Demand has recovered weakly and new channels have been steadily opened up. From a product point of view, the revenue of 2023Q3 meat, poultry / aquatic products / other products is RMB 0.52 billion respectively, which is 26% higher than that of the same period last year. In meat and poultry, the revenue from beef / poultry / pork / mutton was 0.81, 0.37 and 0.16 million yuan respectively, which was-23%, 3%, 9% and 2% respectively compared with the same period last year. The sales of beef and meat products were obviously under pressure in the third quarter. Among the aquatic products, the revenue of fish / shrimp was 0.29 million yuan respectively, which was-11% and 14% respectively compared with the same period last year. From a different channel point of view, the revenue of 2023Q3 franchise stores / distributors / wholesale / direct sales and other / e-commerce customers is 1.09, 0.24, 0.53, 0.03, 0.004 billion, respectively, compared with the same period last year. 6%, 27, 25, 25, 5, 82, 000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000, From a regional point of view, the revenue of 2023Q3 in East China / Central China / North China / South China / Southwest / Northeast China is RMB 1.87 billion, respectively, which is RMB 0.001 million, compared with the same period last year. This is-13%, 16%, 20%, and 63%, respectively. In terms of investment promotion, Q3 in 2023, the company opened a net franchise store / distributor / merchant customer / wholesale customer 25 to 1798, 726, 60, and 519.

The cost is increased, and profitability is under pressure. The company's 23Q3 gross profit margin of 26.25%, a year-on-year increase in 2.39pct, is expected to be mainly due to a decline in the price of raw materials such as beef. In terms of expense rate, the 23Q3 sales expense rate is 5.85%, an increase of 2.30pct over the same period last year, and the gross sales difference is 20.40%, + 0.10% compared with the same period last year. It is expected that the company will increase the team talent reserve and marketing activities expenditure for the development of new channels. The rate of 23Q3 management expenses is 6.15%, which is + 2.57pct compared with the same period last year, and the cost is further increased. To sum up, 23Q3, the company's net interest rate of 16.34%, year-on-year-1.13pct, is expected to increase with the increase in costs, the company's profitability is under pressure.

Backed by the Chaoyang racetrack, the company's production and marketing are making steady progress. Prefabricated food is a strong certainty of the Chaoyang track, the future permeability improvement logic is smooth, the trend is obvious. Wei Zhixiang has the advantage of first-mover in terms of products and monopolization in terms of channels. On the production side, with the continuous commissioning of 50,000 tons of production capacity and the research and development of new products, the "quantity" and "quality" of production capacity are expected to be further improved; on the sales side, the company actively promotes multi-channel layout. On the C side, in addition to the steady penetration of the joining channel in the farmers' market, the street shops are also successfully put into operation and promotion, while the distribution channel further promotes cooperation with Shangchao; on the B side, the sales team continues to expand and the wholesale channel is deeply ploughed. Group meals and small meals are expected to contribute new increments.

Investment advice: maintain a buy rating. According to the three-quarter report, taking into account the effects of weak demand repair, increased cost and raw material price fluctuations, we estimate that the company's operating income for 23-25 is 8.51 yuan 10.11 / 1.187 billion yuan respectively (the previous year is 9.42 pounds 11.62 billion yuan), and the net profit is 1.62 million yuan 1.85 billion yuan respectively (2.54 yuan for the previous year). Maintain "Buy" rating risk Tip: Channel expansion is not as expected Fluctuations in raw material prices; food safety incidents.