Key points of investment:

Investment advice: Under the trend of affordable travel, traditional scenic spots maintain higher resilience, maintain the company's 2023-2025 EPS of 0.57/0.67/0.72 yuan, maintain a target price of 16.6 yuan, and maintain an increase in holdings rating.

Performance summary: Net profit to mother achieved net profit of 36-450 million yuan (median value of 410 million yuan) in 2023, recovered to 106-135% of 2019, and recovered to 107-137% of non-return to mother net profit of 335-430 million yuan (380 million yuan), recovering to 107-137% in 2019; in 2023Q4 alone, net profit to mother achieved -0.48 billion yuan to 0.52 billion yuan (median value of 0.2 billion yuan), 2019Q4 was 0.04 billion yuan, net profit not attributable to mother was -0.72 to 0.23 million yuan (median value of - 0.24 million yuan), 2019Q4 is -0.07 billion yuan;

The performance is in line with expectations: ① Due to the company's disclosure of operating data and the management committee's high-frequency passenger flow tracking, the 2023 performance forecast is in line with the previous expectations; ② Considering the combined effects of the implementation of the free ticket policy in March 2023 and the strong retaliatory travel in 2023Q1, the passenger traffic trend under the subsequent high base is more critical and will be an important support and verification of prosperity. Furthermore, Huangshan tickets account for a relatively low share of tickets (about 10%), so the impact of free ticket discounts is relatively weak;

Later, focus on new projects and traffic improvements: ① The opening of the Chihuangshan High Speed Rail in June 2024 will promote passenger flow between Jiuhuashan Mountain and Huangshan, and will also drive the connection to the East China market. The completion of the Ningxuanhuang High Speed Rail is expected to drive passenger flow in Nanjing; ② the tourism service business led by Tuma Technology is growing rapidly; ③ the construction of the second phase of the Donghuangshan Project is progressing according to plan. Furthermore, the Huicai store is expected to accelerate the increase in store expansion.

Risk warning: repeated impact of the epidemic, extension of subsidies and concessions, economic recovery falling short of expectations