Incident: The company issued a voluntary disclosure notice on major operating data for 2023. It is estimated that in 2023, the company will achieve total revenue of about 1.2 billion yuan, an increase of about 22.46% year on year; net profit to mother will be about 85 million yuan, an increase of about 12.93% year on year.

Consumption scenarios have recovered, and core products have recovered across the board. In 2023, the impact of the epidemic decreased in Qinghai Province. Scenarios such as group purchases, banquets, and travel resumed, and sales in the core market increased by 22.5% year-on-year to 1.2 billion yuan. Annual revenue increased 22.5% year-on-year to 1.2 billion yuan, slightly exceeding the first-tier equity incentive target (revenue of 1,176 billion yuan or more). The net interest rate returned to mother in '23 was 7.08%, down 0.60 pcts year on year. According to estimates from the announcement, 23Q4 revenue was 259 million yuan, an increase of 36.67% over the previous year. The Spring Festival started late in '24, and preparations for the Spring Festival were mainly in the first quarter, but sales in 23Q4 still achieved good growth.

Net profit due to mother in the fourth quarter was 21 million yuan, and a loss of 25 million yuan was achieved in the same period last year. It is estimated that non-recurring profit and loss and equity incentive expenses (estimated amortization expenses of 3.75 million yuan for 23 years) will have an impact on profits.

Organizational structure adjustments have been completed, which is conducive to overall planning and efficient operation. On December 28, the company announced that it plans to merge the former outreach department into the marketing center and integrate the business related to the marketing center into a large customer service department. After the adjustment, the management level has a marketing center, technical quality center, brewing center, supply chain center, finance center, human resources center, information center, administrative center, Tibet company, OG, party and mass work department, legal affairs department, overseas division, Qingli base project department, Qingli industrial park division, and infrastructure department. This adjustment and integration into a large customer service department is conducive to overall planning and efficient operation, and to jointly develop the C-side group buying business.

Investment advice: We believe that the company continued its positive improvement trend in 23. Combined with the 23 major operating data announcements, the company's revenue for 23-25 is expected to be 12.0/14.6/1.73 billion yuan, respectively, with a year-on-year growth rate of 22.4%/21.4%/19.0%. Net profit attributable to mother is estimated to be 0.9/1.4/20 billion yuan, with year-on-year growth rates of 13.3%/61.8%/48.0%, maintaining the “increase in holdings” rating.

Risk warning: Product structure upgrades fall short of expected risks, competition heightens risks, and expansion outside the province falls short of expected risks