Core views:

Incident: The company released its quarterly report for the first three quarters of 2024. The first three quarters of 2024 achieved operating income of 0.425 billion yuan, a year-on-year decrease of 9.44%, net profit to mother of 68.14 million yuan, a year-on-year decrease of 16.62%, after deducting non-return net profit of 55.63 million yuan, a year-on-year decrease of 28.42%.

According to estimates, 24Q3 achieved operating income of 0.165 billion yuan, a year-on-year increase of 42.29%, net profit to mother of 27.42 million yuan, an increase of 396% year-on-year, and net profit after deducting non-return net profit of 19.07 million yuan, an increase of 349% year-on-year.

In terms of cost ratio, the company's gross profit margin for the first three quarters was 50.17%, down 2.05pp year on year. The decline was mainly due to the rigidity of exhibition expenses, but revenue declined year on year; the cost ratio for the period was 33.1%, up 3.76pp from year to year, of which the sales expenses ratio was 23.7%, up 3.42pp year on year, management expense ratio was 8.68%, up 0.76pp year on year, R&D expense ratio was 2.61%, down 0.11pp year on year.

Judging from the follow-up exhibition plan, according to Miolante's official account, 24Q3 held a total of 4 exhibitions in the US, Brazil, Mexico, and South Africa. Exhibition costs were relatively rigid, and revenue growth and low base led to a high increase in Q3 profits. Five exhibitions are expected to be held in 24Q4 (Poland, Japan, Indonesia, UAE, India). Improving bilateral relations between China and India is beneficial to the India exhibition, which the company plans to host in December. It is expected that exhibitors will have a high probability of getting a visa. The holding of the India exhibition will contribute to the company's profit increase in Q4. According to the official Miolante account, the company plans to hold 16 exhibitions in 11 countries throughout 2025, including 5 in the first half of the year and 11 in the second half of the year. The number of shows will increase by 1 compared to 2024.

Profit forecasting and investment advice. The company is expected to achieve net profit of 2.23.307 and 0.393 billion yuan respectively in 24-26, with year-on-year growth rates of 18.7%, 37.2%, and 28.2%, respectively. Referring to comparable companies, a PE valuation of 22 times in 24 years is given. The corresponding reasonable value is 21.35 yuan/share, maintaining a “buy” rating.

Risk warning. Macroeconomic fluctuations; recurrent epidemics; low expectations for market expansion; geopolitical risks.