Maintain a "buy" rating, benefiting from the economic recovery

The company's 23 Q1-Q3 income was 1.858 billion yuan, down 3.1%; the net profit was 14 million yuan, an increase of 27.0%; the net profit of non-return was 5 million yuan (a loss of 21 million yuan in the same period last year); the income of 23Q3 in a single quarter was 658 million yuan, an increase of 2.4%; a net loss of 8 million yuan (a loss of 23 million yuan in the same period last year); and a non-net loss of 12 million yuan (a loss of 0.25 billion yuan in the same period last year). The loss reduction is mainly due to year-on-year growth as the economy recovers. We estimate that the EPS of the company from 2023 to 2025 will be 0.02, 0.07, 0.13 respectively. Segment valuation, estimated 24-year cloud business revenue / traditional business net profit of 880,000,000 yuan, comparable to the company 24e 22.2xPS/50.3xPE, considering the company's cloud acceleration or help to achieve multi-link acceleration, give cloud / traditional business 24e 25.0xPS/50.3xPE, target price 17.82yuan, "buy" SEP gradually large-scale landing + downstream recovery, cloud revenue growth can be expected the company SaaS business development is good The net cash flow generated by 23Q1-Q3 's operating activities increased by 53.3%, mainly due to the gradual promotion of the cloud of products and the decrease of hardware procurement business compared with the same period last year. From the perspective of the progress of key products, the new generation of enterprise hotel information system product SEP continues to expand the launch of benchmarking customers. As of the end of 23H1, SEP launched a total of 135 hotels, including 93 IHG hotels. 23H1 SEP has signed a new contract with Dutch independent hotel chain Fletcher Hotels (a total of 110hotels). We believe that as SEP gradually enters the stage of large-scale landing and the downstream economy gradually recovers, the landing of cloud products or further acceleration, cloud revenue is expected to accelerate growth.

Cloud POS breaks through the head customer, and the product is expected to be strengthened step by step.

In May 2023, the company announced that Shiji Germany, a wholly owned subsidiary, signed a contract with Hilton USA. Shiji will provide Hilton Group and its hotels with a new generation of cloud catering management system Infrasys Cloud and related professional services and supporting hardware products. In October 2023, Marriott International Group and Stone Group signed the Global Cooperation Framework Agreement (MSA), which will continue to promote the deployment and application of stone-based Infrasys cloud POS solutions in many regions around the world. Cloud POS continues to break through the head customers, reflecting Shiji's technical strength in hotel cloud products. We believe that as the company's cloud POS products continue to iterate in the use of head customers, the product advantages may be further strengthened.

Cloud and platform strategy is promoted, extending to multi-links of the industrial chain

Cloud POS and cloud PMS products are important carriers of the company, and the company provides full-link business solutions to hotels through SEP platform products, establishing the advantages of hotels and other information systems, on this basis to extend to booking, payment and other links, and further enhance the market space.

As SEP products gradually enter the large-scale landing, cloud POS products continue to break through the head customers, the company's cloud revenue is expected to accelerate growth, and is optimistic about the acceleration of the company's cloud and platform strategy.

Risk hints: macroeconomic fluctuations; market promotion progress of cloud products is lower than expected.