Incident: The company disclosed its annual report for '23 and its quarterly report for '24. 1) In '23, the company achieved revenue of 724 million yuan/+34.7% compared to the same period in '19, net profit of 175 million yuan/+49.2% over the same period in '19, after deducting net profit of 166 million yuan/55.4% over the same period in '19. 2) The 24Q1 company achieved revenue of 180 million yuan/-6.13% compared to the same period in '23, net profit of 52 million yuan/-15.8% compared to the same period in '23, and net profit of 49 million yuan/-17.9% compared to the same period in '23. 3) It is proposed to distribute 7.9 yuan for every 10 shares, and the dividend payment ratio will be drastically increased from about 30% to 50% in 20-21.

Demand for tourism consumption was released in 23, and Jiuhua Mountain achieved a sharp increase in the volume and efficiency of the main business with natural scenery and Buddhist culture. The ropeway/hotel/passenger transport/travel agency business achieved revenue of 294 million yuan/234 million yuan/121 million yuan/67 million yuan respectively, a change of +27.6%/+33.3%/+51.4% from the same period in '19; gross margins of 86.0%/16.5%/48.6%/9.4%, respectively, and a change of +3.2pct/+5.9pct/+0.0pct/-0.3pct, respectively. Among them, the ropeway business still grew on a high margin basis, due to relative operating costs Rigidity, hotel business or natural climbing. On the cost side, the sales/management/finance rates were 5.36%/13.0%/-0.18%, respectively, changing +0.08pct/-1.17pct/-0.10pct from the same period in '19, which is improving overall. The net profit margin was 24.14%/+2.35pct compared to the same period in '19, showing strong profit elasticity.

Both 24Q1 revenue and profit declined year over year, probably due to the late Spring Festival and extreme weather. The company's traditional peak season is from after the Spring Festival to the end of May, and the Spring Festival in '24 is about 20 days later than the Spring Festival in '23. Furthermore, in late February, due to freezing rain and snow, some scenic spots such as the roof and flower terrace were suspended to varying degrees.

Meanwhile, during the Spring Festival in '24, the Jiuhuashan Transportation Conversion Center function upgrade project was initially put into use, and the number of parking spaces was expanded to 5207, which can significantly improve the problem of parking difficulties during peak periods. We estimate that under normal circumstances, revenue may still grow at a high base of 23Q1 compared to 23Q1.

Invest in the Lion Peak passenger ropeway project to meet the expansion needs of scenic area tours. The project has an investment amount of 326 million yuan, including 295 million yuan for ropeways and about 31 million yuan for alpine walking trails; the total planned area of the project is 17,700 square meters, and the company expects the construction period to be 2 years. According to the Feasibility Report, according to the first year's passenger rate of 40% (224,000 passengers), annual passenger flow growth of 15%, and no increase in the 15th year, the company estimates an average annual revenue of 111 million yuan and a total annual profit of 50 million yuan during the 15-year period, an investment profit margin of 15.32%, an internal rate of return of 9.54% (after tax), and a payback period of 11.92 years (including a 2-year construction period).

Company highlights: 1) With the rise of emotional consumption, the temple economy remains very popular, and the company, as a famous Buddhist mountain, is expected to continue to benefit during the peak season. 2) The Wuhang High Speed Rail (Chihuang section) will be ready for operation at the end of April. It is expected to connect the core attractions of the two mountains and one lake (Jiuhua Mountain, Huangshan, and Taiping Lake) and expand the number of high-quality passengers in East China and Central China. 3) The renovation and expansion of Jiuhuashan Airport is progressing steadily. The 2,800-meter runway is scheduled to be put into operation within the year, which is expected to facilitate long-term Buddha worship customers. 4) The Lion Peak Ropeway project has achieved supply expansion, and the company expects to contribute about 50 million in profits every year after completion of the climbing slope. The popularity of scenic spots in Foshan continues, major traffic improvements have led to increased passenger flow, supply expansion has broken through the reception ceiling, and the company's performance is expected to be further boosted. According to iFind's consistent expectations, the company's net profit for 24-26 was 2.02/2.25/248 million yuan, respectively, and PE corresponding to the closing price on April 19 was 20/18/17 times, respectively.

Risk factors: Project construction progress falls short of expectations, risk of adjustment of fees in scenic spots, risk of natural disasters.