Event: the company released its three-quarter report in 2023. In the first three quarters, the company achieved an income of 1.207 billion yuan, an increase of 16.14% over the same period last year. It realized a net profit of-536 million yuan, with a loss of-457 million yuan compared with the same period last year. The net profit of non-homing was-556 million yuan, and the loss was enlarged over the same period last year.

The overall operation of Q3 is stable and improving, and the cost control continues to be marginal optimized. In the first three quarters of the year, the company achieved operating income of 3.36 trillion yuan per quarter, up 43.99%, 19.34% and 1.35% respectively over the same period last year. The company continued to make efforts in the areas of data security, cloud security, Xinchuang security, MSS hosting and operation services, and maintained steady growth in overall business, with a high increase in orders for emerging businesses. In the first three quarters of 2023, the company's sales, R & D and management expenses increased by 18.33%, 0.17% and 13.22% compared with the same period last year, which was significantly lower than the increase of 31.2%, 32.2% and 27.4% in the same period last year. The combined growth rate of the three fees was significantly reduced to 14.08% (29.79% in the first three quarters of 2022), and the cost control continued to be marginal optimized. The per capita efficiency of the company has improved rapidly, and the per capita efficiency of sales increased by more than 20% in the first three quarters of 2023 compared with the same period last year.

The company actively participates in emerging security markets such as data security and has achieved remarkable results in expansion. The company has actively participated in the marketization of local data elements and made a breakthrough in the field of government public data authorization and operation, and many prefectures, cities, districts and counties in China have launched online business models. Overall orders for an Hengyun-Tianchiyun, data Security, Xinchuang Security, MSS managed Operation Services and other related businesses maintained rapid growth. In the first three quarters of 2023, the company's contract value related to Xinchuang business increased by nearly 170% compared with the same period last year, and the overall contract value for data security increased by more than 50% compared with the same period last year.

AI R & D breakthrough innovation, "Hengnao" safety droop domain large model released. On August 28, the company officially released the "Hengnao" safety droop domain large model, which realized the brand-new upgrade of the security operation platform based on the safety sag domain large model. On October 26, the company won the gold medal in the 2023 national finals of Jingxi Zhigu-Pengteng AI Innovation Competition for its "Hengnao" security model solution based on Penteng hardware and software platform. Look forward to the continuous iterative upgrade and commercial application of the company's security domain model.

Earnings forecast, valuation and rating: taking into account the impact of the macro environment and other factors, the 23-24 revenue forecast is reduced to 2.577 billion yuan (adjusted-16.3% Mather 16.9%), the 25-year revenue forecast value is increased by 4.77 billion yuan, and the 23-24 homing net profit forecast is reduced to 0.39 million yuan (adjusted by-78.0% 49.0%), and the 25-year forecast value is increased by 259 million yuan. From 23 to 25, the EPS was 0.490.89 and 3.29RMB respectively, maintaining the "over-holding" rating.

Risk hint: the market reaction of new business is lower than expected; the competition in the industry intensifies.