Maintain an increase in holdings rating. Considering that Q4 non-recurring profit and loss dragged down performance, the 2023 EPS was reduced to 0.52 yuan (previous value was 0.54 yuan). Maintain the 2024/25 EPS of 0.58/0.61 yuan. The 2024 industry average valuation of 22xPE was given, and the target price was lowered to 12.08 yuan (previous value was 15.08 yuan) to maintain the increase in holdings.
Performance summary: In 2023, net profit due to mother is estimated to be about 275 million yuan/ +140.16%, after deducting non-net profit of about 225 million yuan/ +63.20%. The company's Q4 net profit was 0.3 million yuan/ -73%, after deducting non-net profit of 63 million yuan/ -47%; the large year-on-year decline in Q4 was mainly due to the high base for the same period last year.
The main business has recovered well, and two-wheel drive has been accelerated to enhance competitiveness. In this issue, with the recovery of the exhibition industry, the company's exhibition event business has fully resumed, and all main business indicators are better than the same period last year.
The company focuses on the “3+1" core business to accelerate two-wheel drive: internally incubate the Shanghai Open Sailing Championships and the Shanghai Open Rowing Championships, invest externally in the Expo and Huijietong; continuously activate potential and promote transformation and upgrading.
Non-operating profit and loss increased significantly, but there was a loss in Q4 revenue. Affected by fluctuations in the secondary market, the return on changes in the fair value of financial assets held by the company in 2023 was better than in the same period last year; it received investment allocations from Shanghai Huaduo Equity Investment Fund Partnership (Limited Partnership) and housing levy compensation from Shanghai Wentai Sneaker Factory. However, there was a loss in Q4 revenue, and performance was somewhat hampered.
Risk warning: macroeconomic downturn, IP influence weakens; strategic progress falls short of expectations.