The company released the third quarterly report of 2023: 1) in the first three quarters of 2023, the company realized revenue of 2.053 billion yuan / + 647.46%, net profit of 14 million yuan / + 110.72%, and deducted non-return net profit of 10 million yuan / + 107.56%. 2) 2023Q3: the company achieved revenue of 1.261 billion yuan / + 748.28%, net profit of 49 million yuan / + 195.51%, located at the upper edge of the previous performance forecast range, deducting non-return net profit of 47 million yuan / + 191.06%.

The net interest rate returned to an all-time high. 1) 2023Q3: gross profit margin 11.84%/-2.90pcts, higher than the same period in 2019 + 3.18pcts. The ratio of sales expenses to income (4.81%/-20.94pcts), administrative expenses to income (2.37%/-12.99pcts) and financial expenses to income (0.69%/-4.23pcts). The net interest rate is 4.0%, reaching a historically high level (the highest net interest rate of Q3 in the past 10 years is 4.05% of 2016Q3). 2) the first three quarters of 2023: the ratio of sales expenses to income 7.17%/-32.62pcts, the ratio of administrative expenses to income 3.63%/-17.26pcts, and the ratio of financial expenses to income 0.61%/-12.34pcts.

The number of people entering and leaving the country has continued to increase compared with the recovery in 2019, and the number of people entering and leaving the country in the first three quarters has returned to 73% of that in the same period in 2019. Benefiting from the resumption of the list of the third batch of outbound group tours and the increase in the supply of international flights, the demand for outbound travel of domestic residents continues to pick up. According to the State Administration of Immigration, in the first three quarters and the first half of 2023, the national immigration administration agencies inspected entry and exit personnel to 73% and 48.8% respectively in the same period in 2019. The number of people during the Mid-Autumn Festival and National Day holidays was 11.818 million, with a daily average of 1.477 million, returning to 85.1 per cent in the same period in 2019.

Investment suggestion: considering that on August 10 this year, the Ministry of Culture and Tourism will liberalize the third batch of outbound team business countries, while the resumption of supply-side international flights and the procurement of overseas products will also take time, we believe that outbound tours in 2024 will achieve a greater recovery, so take the 2024 performance as a valuation reference, give buy-An investment rating, 12-month target price of 8.1 yuan, equivalent to 30 times the dynamic price-earnings ratio of 2024. Based on the fact that the restrictions on outbound travel have been basically lifted in 24 years, it is estimated that the sales of outbound travel products in 24 years have returned to 80% of the level before the epidemic, while staff cost-side savings have further magnified profits. We estimate that the company's corresponding income in 2023-2024 is 31.91 yuan and 10.093 billion yuan, with a net profit of 0.34 yuan and 261 million yuan.

Risk tips: outbound passenger flow recovery is not as expected, the supply of international flights is not as expected, and so on.