The company released its 2024 three-quarter report. In 2024, Q1-3 achieved operating income of 0.405 billion yuan/yoy -14.77%, and a return performance of 0.085 billion yuan/yoy -28.84%, after deducting non-performance of 0.083 billion yuan/yoy -27.36%. Corresponding net profit margin of 20.53% /yoy-3.56pcts

Single Q3: In Q3 2024, the company achieved operating income of 0.141 billion yuan/yoy -26.35%, a return performance of 0.033 billion yuan/yoy -42.96%, deducting non-return performance of 0.032 billions/yoy -41.38%, and a net interest rate of 22.86% /yoy-5.86pcts. The decline in profit was mainly due to continued high temperatures and frequent extreme weather in Jiangsu, Zhejiang and Shanghai during the summer season (July-August), which affected the company's business development, leading to a decline in operating income.

Profit levels were under pressure, and expenses rose slightly during the period. 2024Q3, the company's gross margin was 54.06%, down 5.75pcts from the same period last year; the net margin was 27.30%, down 7.39pcts year on year. In terms of period expenses, 24Q3 company's sales expenses rate/management expense ratio/financial expense ratio were 6.09%/12.70%/-1.36%, respectively, with year-on-year changes of +0.67pcts/+1.99pcts/-0.31pcts.

New projects are being actively prepared, and the opening of the high-speed rail is expected to improve passenger flow. ① The company is actively preparing for the commencement of construction of the Nanshan Xiaozhai Phase II project. The pre-construction plan of the project was approved in H1 in '24. ② Cooperate with Tianmuhu Town to jointly promote development and cooperation matters in the Pingqiao Shiba area; ③ Actively reserve new projects and carry out the overall planning work for the Yushui Hot Spring Phase III project; ④ The Shanghai-Suhu High Speed Rail is expected to be officially opened by the end of the year, and the Wuhu to Shanghai example will be shortened to 1.5h.

Investment advice: Tianmu Lake was earlier positioned as a strategic development model for one-stop tourism. The business covers a full range of tourism industry chains such as scenic spots, hot springs, theme parks, hotels and restaurants, commerce, and travel agencies, etc., and is optimistic about its brand building and marketing advantages. Government-enterprise cooperation after state-owned investment will further enhance industrial synergy. We expect the company's 2024-26 revenue to be 0.59 billion/0.628 billion/0.671 billion, net profit to mother 0.129 billion/0.144 billion/0.161 billion, and the latest closing price corresponds to 23.39 times PE in 24 years, maintaining a “buy” rating.

Risk warning: The passenger flow in the scenic area falls short of expectations; the implementation results of the new project fall short of expectations; the construction progress of the new project falls short of expectations.