Incident: The company released its quarterly report for the year 24. In 24Q1, it achieved revenue of 180 million yuan, the same level as the previous year, achieved net profit of 56 million yuan/yoy +1%, after deducting net profit of 55 million yuan/yoy -0.7%.

The company's Yulong Snow Mountain is a famous tourist destination in China and is widely popular with tourists. 6 days before the Spring Festival holiday in '24, Yulong Snow Mountain received more than 32,000 visitors every day, an increase of more than 24% over the previous year. The opening of the Shanghai-Kunming High Speed Rail at the end of 2016 brought about a significant improvement in the surrounding traffic environment. Subsequent opening of the Xiangli Expressway and Lipan Expressway and the renovation and expansion of Lijiang Airport continued to improve the convenience of transportation in the scenic area. The superimposed company is actively integrated into the Western Yunnan Tourism Ring Road, and continues to promote the construction of the second phase of the Lugu Lake Mosuo Town and diversify the supply of products, which is expected to meet strong tourism demand.

Profit forecast and investment suggestions: We are optimistic about the sustainability of the demand driven boom in the scenic area industry. We are optimistic about the company's leading tourism position in northwest Yunnan. The company has high-quality tourism resources such as Yulong Snow Mountain, Shangri-La, and Lugu Lake in Lijiang. The improvement of surrounding traffic and supply optimization in the scenic area are driving long-term growth. We expect the company to achieve revenue of 888/9.27/975 million yuan in 2024-2026, yoy +9%/+7%/+5%, and achieve net profit to mother of 2.46/2.62/280 million yuan, yoy +8%/+7%. The current stock price corresponds to PE of 23/22/20X, maintaining the “recommended” rating.

Risk warning: risk of macroeconomic fluctuations, risk of natural weather changes, risk of project construction falling short of expectations.