Event: the company's revenue in the first three quarters of 2023 was + 1.2%, the net profit was-71.9%, the revenue of 2023Q3 was-16.9%, the net profit was-491.8%. In the first three quarters of 2023, the company achieved operating income of 1.55 billion yuan (year-on-year + 1.2%) and net profit of 10.637 million yuan (- 71.9% compared with the same period last year). 2023Q3 realized operating income of 470 million yuan (year-on-year) and net profit of-28.783 million yuan (year-on-year-491.8%).

In the first three quarters of 2023, the gross profit margin of sales increased, the net profit margin declined, and contract liabilities increased compared with the same period last year. Of these, the sales expense rate is 11.1% (year-on-year + 2.3pct); the management expense rate is 11.2% (year-on-year + 2.2pct); the R & D expense rate is 3.3% (year-on-year + 0.6pct); the financial expense rate is 1.0% (year-on-year + 0.7pct); and the net sales interest rate is 0.6% (year-on-year-1.5pct). 2023Q3 gross profit margin is 17.5% (year-on-year-0.9pct); sales expense rate is 14.4% (year-on-year + 3.3pct); management expense rate is 10.3% (year-on-year + 3.5pct); R & D expense rate is 4.0% (year-on-year + 1.5pct); net sales margin is-11.6% (year-on-year-10.9pct). As of 2023Q3, the company's contract debt is 170 million yuan (+ 23.4% compared with the same period last year), which is due to the increase in the amount of money received in advance from customers in the current period.

2022-2023 business annual revenue + 20.8%, corn and wheat seed and lint business rapid growth.

In the 2022-2023 business year, the company's total revenue was 3.45 billion yuan (year-on-year + 20.8%), the total sales volume was 540 million kg (year-on-year-10.6%), and the value of goods in stock at the end of the period was 1.15 billion yuan (year-on-year + 0.45%).

Revenue growth mainly comes from corn, wheat seed business and lint income increase. Among them, rice seed revenue 1.44 billion yuan (year-on-year + 10.7%); corn seed revenue 360 million yuan (year-on-year + 40.1%); wheat seed revenue 340 million yuan (year-on-year + 116.0%); lint business revenue 340 million yuan, year-on-year increase (+ 1192.0%); food crop revenue 590 million yuan (year-on-year-24.6%).

Investment suggestion: the company is the leader of "breeding, breeding and promoting integration" in the seed industry, laying a solid foundation for development by strengthening R & D investment and cooperation between science and enterprises, and opening up future growth space through diversified layout of business through epitaxial mergers and acquisitions. From 2023 to 2025, we expect the company to achieve a total operating income of 41.78 million yuan and a net profit of 4.982 million yuan and a net profit of 2.78 million yuan. The corresponding PE is 30-25-20 times, maintaining the "overweight" rating.

Risk hints: the risk of price fluctuation of agricultural products caused by natural disasters, the risk of exceeding expectations of diseases and insect pests, the risk of the deterioration of the international situation affecting the circulation of agricultural products, the risk of less than expected promotion of varieties, and the risk of disturbance of agricultural policies.