Introduction to this report:

The company's business was steady during the 2024Q1 off-season. The decline in contract debt was due to a decrease in the prepayment ratio, the company's competitive barriers were high, and the professional exhibition of strategic upgrading and transformation had a multiplier effect, so the company's future development can be expected.

Key points of investment:

Maintain the increase in holdings. Considering the company's steady business, maintain an EPS of 1.76/2.34 yuan/share in 2024/25, and add 2.95 yuan of EPS in 2026. Give 26xPE in 2024, maintain the target price of 46.02 yuan, and maintain the increase in holdings.

Performance summary: 2024Q1 achieved revenue of 76.131 million/ +12.2%, net profit attributable to mother of 4.815 million/ +349.4%; net profit after deduction of 1,532 million/ +311.6%; mainly due to fair value change earnings of 3.28 million yuan.

Gross margin declined slightly year over year, and expense ratios continued to be optimized. The gross margin of 2024Q1 was 54.4% /-3.8pct; mainly due to two self-hosted exhibitions in the first quarter, compared to 1 in the same period in 2023, the scale effect did not keep up. The company's cost ratio continued to be optimized during the period, with a sales expense ratio of 42.1% /+0.33pct, with a slight increase; the management expense ratio was 12.7% /-3.71pct, mainly due to personnel cost structure optimization; and the R&D expense ratio was 4.1% /-2.1pct, mainly due to cumulative optimization of early results.

The decline in contract debt is due to a reduction in the prepayment ratio, and the transformation of professional exhibitions unleashed a multiplier effect. The 2024Q1 contract debt, which the market is more concerned about, is 170 million yuan/ -23%, not due to a decline in order volume, but to exhibitors facing pressure from the industry's operating environment and reducing the advance payment ratio due to cash flow considerations. In line with the trend of manufacturing going overseas, the company actively upgraded its strategy from comprehensive exhibitions to professional exhibitions, n professional exhibitions x n countries, and the multiplier effect brought huge potential for growth.

Risk warning: macroeconomic downturn, IP influence weakens; strategic progress falls short of expectations.