Event: The company released its three-quarter report for 2013. In the first three quarters of 2023, the company achieved revenue of 1,526 billion yuan, -44.25% year-on-year; achieved net profit of 0.47/049 million yuan after deducting non-return net profit, respectively, +127.98%/+129.71% year-on-year; and achieved net operating cash flow of 275 million yuan, -24.52% year-on-year. On a quarterly basis, 2023Q3 achieved revenue of 369 million yuan, -63.53% year-on-year; net profit of 22 million yuan, +192.03% year-on-year.

Actively promote debt settlement and reduce financial costs and impairment losses. The company used Dongxu Group's overall debt restructuring plan as an opportunity to actively promote the company's debt risk mitigation work, strengthen communication and cooperation with financial institutions, reduce the company's debt repayment pressure through various methods such as rollover and interest rate cuts, and reduce financial expenses. In October 2023, the company and the Shenzhen Rural Commercial Bank reached a debt settlement agreement on the principal amount of the financing balance of 488.888 million yuan, extending the debt for ten years; during the same period, the company and Great Wall Huaxi Bank reached a debt settlement agreement on the principal amount of the financing balance of 215 million yuan and related interest, and extended the debt for ten years. The company's credit impairment loss/asset impairment loss for the first three quarters of 2023 was -0.43/024 million yuan, respectively, compared with -0.11/-048 million yuan for the same period in 2022; financial expenses were 91 million yuan, -78.81% year-on-year.

The expansion of the scenery project continues to gain strength, build a tea oil brand and open up new growth points. Since the beginning of this year, the company has continued to make efforts in the expansion of landscape projects, achieved complementary advantages in new energy projects such as photovoltaics and wind power, obtained opportunities for collaborative business investment in existing industries, obtained project development indicators in cooperation with Haixi State Investment, Changchun State Investment, etc., and obtained a 207MW wind power project target in Huaihua, Hunan.

At the same time, according to the “leading enterprise+base+cooperative+farmer” tea oil interconnection innovation development model, the company cultivates camellia oleifera clusters with advantages and characteristics, enriches the tea oil product line, builds a high-quality brand of blue sky Jinzhai camellia oil, and strives to develop new profit growth points.

The controlling shareholders promised not to reduce their holdings of the company within 6 months, demonstrating confidence in the company's future development. In October 2023, the company issued an announcement stating that the controlling shareholder Dongxu Group voluntarily promised not to reduce its holdings of the company within the next six months, based on confidence in the company's future development prospects and recognition of the company's value, and at the same time to support the company's continuous, healthy and stable development and protect the interests of investors.

Profit forecast: Maintaining the company's “excess holdings” rating. We expect that in 2023-2025, the company will achieve revenue of 27.78/36.01/407 billion yuan and net profit of 1.46/3.09/422 million yuan respectively, corresponding to PE39.96x/18.84x/13.82x, respectively.

Risk warning: Changes in the macroeconomic situation at home and abroad have exceeded expectations, the growth rate of the scale of new energy sources has fallen short of expectations, the progress of repayment of related subsidies has fallen short of expectations, accounts receivable and advance payments are high, and profit forecasts and valuation models have fallen short of expectations