Incident: The company released a performance forecast for the first quarter of 2024. The total revenue for the first quarter was 52-530 million yuan, up 31.31%-33.84% year on year; net profit to mother was 105-110 million yuan, up 36.1%-42.6% year on year, and the results were in line with expectations.

There is restorative growth in the province, and the share continues to rise. 1. The province focused on the restorative growth of the Xining market, focusing resources on core products, strengthening channel momentum, and achieving significant restorative growth in the Xining market. 2. To strengthen consumer cultivation, the company set up a major customer operation department to step up efforts to promote the construction of group buying channels and continuously cultivate core opinion leaders; accurately classify core consumer groups through the “Qingli Club” platform, establish accurate portraits of core consumers, and implement marketing initiatives more scientifically and accurately. 3. Through the entry of famous wine into famous enterprises, the invitation of thousands of entrepreneurs, the C-side operation of KOC/KOL, and the “1+3N” model reform, the company's overall brand influence and channel impetus have been significantly enhanced. The growth potential within the province is strong, and the market share continues to rise.

Outside the province, we are actively developing, and there is plenty of room for growth. 1. The national layout is more clear, continuously consolidating the Qinghai base market and the marketing base in Gansu; outside the province, it focuses on strategic core markets such as Jin, Shan, and Yu, and actively lays out spot markets such as Wuxi, Fuzhou, Nanning, and Zhangjiakou, laying a solid foundation for deep nationalization, and the growth space continues to expand. 2. Ala Jiabao focuses on high-end in the Tibet region. As a famous local wine company, it has excellent brand power and product strength. After years of operation, it has a deep local resource base, and currently has the conditions to scale; in addition, the company actively lays out integrated wine tourism projects on the Qinghai-Tibet Plateau to diversify and enrich marketing content, which is conducive to the improvement of the company's overall brand power.

The pace of deep adjustments is remarkable, and the upward trend continues at an inflection point. The company focuses on product structure upgrading, continues to promote marketing transformation, and comprehensively promotes wine tourism integration. The pace of in-depth adjustment is remarkable: 1. Focus on resources to cultivate core products such as national virtue, family virtue, human virtue, export type, etc., and actively lay out human virtue to seize the price of 150-200 yuan. Qinghai has fully introduced Guozhizhen's vintage products, and the pace of product structure upgrading is obvious. 2. Promote marketing transformation, implement the “Skynet Project” strategy of direct-run specialty stores, 100 core affiliates, thousands of core terminals and 10,000 sales terminals, and introduce a core terminal affiliate operation model, and significantly increase channel power. 3. The company focuses on the three aspects of cultivating tourists, community operation for tourism workers, and joint promotion of tourist attractions to strengthen the integration of wine tourism. Using tourism consumption to drive product sales and brand communication, the Qinghai market will enter the peak tourist season in the second and third quarter, and the upward trend in performance is expected to continue.

Profit forecasting and investment advice. EPS is expected to be 0.34 yuan, 0.48 yuan, and 0.59 yuan respectively in 2024-2026, corresponding PE is 30 times, 21 times, and 17 times, respectively. The company benefits from consumption upgrades within the province and market development outside the province. It is optimistic about the company's long-term growth capacity and maintains a “buy” rating.

Risk warning: There is a risk of a sharp economic downturn, and the recovery in consumption falls short of the expected risk.