The event company issued a report for the third quarter of 2023: the company's operating income in the first three quarters of 2023 was 3.886 billion yuan, an increase of 84,888 percent over the same period last year; the net profit belonging to shareholders of listed companies was 320 million yuan, up 5.76 percent from the same period last year; and deducting 315 million yuan from non-homing net profit, an increase of 31.98 percent over the same period last year. Of this total, Q3 realized operating income of 1.692 billion yuan, up 10.18% from the same period last year; the net profit belonging to shareholders of listed companies was 102 million yuan, up 18.87% from the same period last year; and the non-return net profit was 101 million yuan, up 29.93% from the same period last year.

The offline campus business recovered smoothly, and the profit level increased year-on-year: the company's gross profit in the first three quarters was 18.48%, an increase of 4.04pct over the same period last year, deducting 315 million yuan in non-return net profit, an increase of 31.98%; in the third quarter, gross profit was 14.94%, an increase of 2.18pct over the same period last year, deducting 101 million yuan in non-return net profit, an increase of 29.93% over the same period last year.

The company's profitability increased compared with the same period last year, mainly due to the good recovery of offline campus business with high gross margin and the smooth development of central media special programs.

Multi-party cooperation to expand business boundaries: the company carries out strategic cooperation with Guiyang big data Exchange on the construction of big data trading platform to drive the future industrial development, and takes the lead in exploring the market cultivation of data elements throughout the country to fully release the value of data elements. On July 27, Guizhou Sanrenhang data elements Intelligent Technology Co., Ltd., a wholly owned subsidiary of the company, was established. The company is expected to make use of its professional experience in capital operation to carry out practice in the field of big data trading market makers through cooperation. to provide customers with timely, safe and efficient big data services.

In addition, the company has reached a strategic cooperation with iFLYTEK to enhance smart marketing capabilities and develop multimodal intelligent marketing tools based on next-generation artificial intelligence technology.

Investment advice: we believe that the basic market of the company is stable and the customer business in the stock market is carried out smoothly. Through strategic cooperation with other technology-based enterprises, AI and big data are expected to optimize the company's business model, expand business boundaries, and achieve cost reduction and efficiency. We estimate that the company's net profit attributable to shareholders of listed companies from 2023 to 2025 will reach 1.05 billion yuan in turn, an increase of 39.36%, 28.96% and 13.70% over the same period last year, corresponding to an EPS of 6.98 pm and a recommendation rating of 8x/6x/6x, respectively.

Risk hint: the market competition aggravates the risk, the customer concentration risk, the media resources purchase price rise risk, the AIGC technology development is not as expected and so on.