The company disclosed its annual report for the year 23 and the quarterly report for '24: revenue recovered steadily in '23, achieving revenue of 3.92 billion yuan, YoY +5.2%; gross margin of 30.7%, the same as the previous year; net profit to mother in '23 was 176 million yuan, YoY -16.0%; net profit after deducting non-return to mother was 143 million yuan, YoY -14.8%.
24Q1 achieved revenue of 898 million yuan, YoY +11.7%; gross margin was 29.57%, a slight decrease of 0.3 pct year over year; 24Q1 net profit of 27.67 million yuan, YoY +5.9%; net profit without return to mother was 24.97 million yuan, YoY +71.6%.
Cultural tourism has maintained strong growth, and gaming revenue and profits have remained steady. According to the company's annual report, (1) Cultural tourism: revenue from existing projects grew strongly, and new projects contributed increased revenue. ① In terms of tourism, tourism revenue in '23 was 271 million yuan, YoY +76.5%; gross profit margin was 73.1%, down 1.7 pct. In '23, Window of the World in Changsha had revenue of 238 million yuan, YoY +55.4%; net profit of 60.95 million yuan, YoY +311.4%. Revenue other than Window of the World is 32.43 million yuan, which is expected to include incremental revenue contributed by various projects launched in the “Sanxiang Starlight Campaign”. ② Hotel revenue in '23 was 138 million yuan, YoY -9.6%. St. Jeffs Hotel's revenue for 23 years was 170 million yuan, and net profit was 20.58 million yuan. (2) Gaming: 23 million yuan in revenue of 451 million yuan, YoY -0.55%; gross profit margin of 72.08%, down 9.40pct; net profit of 131 million yuan, YoY -0.1%. (3) Venture capital: 23-year investment management revenue of 492 million yuan, YoY -4.7%; gross profit margin 99.94%, an increase of 4.14pct. The subsidiary Dachen Caizhi had annual revenue of 491 million yuan, YoY -3.9%, net profit of 390 million yuan, and YoY -13.8%. (4) Advertising: Revenue of 2,470 billion yuan in 23 years, YoY +2.7%; gross profit margin of 3.77%, same decrease of 1.05 pct, net profit of 1.478 million yuan, YoY -79.6%.
Profit forecasting and investment advice. We expect the company's 24-26 revenue to be 4.327 billion yuan, 4.787 billion yuan, and 5.283 billion yuan, respectively, and net profit to mother of 233 million yuan, 333 million yuan and 436 million yuan respectively. Referring to comparable companies and considering the company's resource advantages and space for new business development, we will give the company 40x PE for 24 years, corresponding to a reasonable value of 6.58 yuan/share.
Risk warning. The implementation of cultural tourism projects fell short of expectations, venture capital business fell short of expectations, and stricter regulations, etc.