Introduction to this report:

The performance is in line with expectations. Focus on price increases and asset injection progress.

Key points of investment:

Investment advice: Considering that after divesting part of the transportation business, we will maintain the 2024-2026 return profit forecast of 1.14/1.3/1.46 yuan, corresponding EPS of 0.16/0.18/0.2 yuan, maintain a target price of 6.46 yuan, and maintain an increase in holdings rating.

Performance summary: 2024H1 achieved revenue of 0.34 billion yuan/ -61%, gross profit of 0.109 billion yuan/ -10%, gross profit margin of 32% /+18pct, tax and additional/sales/management/financial expenses ratio +1.31/-1.41/+8.32/ +1.76% year over year, profit attributable to mother 0.054 billion yuan/ -11%, profit to mother 15.85% /+8.9pct, net of non-attributable mother 0.049 billion yuan/ -9.22%, deducted from non-return mother Profit margin to mother 14.39% /+8.19pct; among them, 2024Q2's revenue was 0.21 billion yuan/ -48%, gross profit margin of 0.083 billion yuan/ -30%, gross profit margin 39.42% /+18.65pct, tax and additional/sales/management/financial expenses ratio +0.99/-1.46/+4.68/+0.51 pct, profit margin of 0.045 billion yuan/ +10%, profit margin 21% /+11pct, net of 0.042 billion yuan/ +15%, profit margin 20% /+5.34pct.

Divestment of passenger car and other businesses led to an increase in profit margins due to the increase in the share of travel services. 2024H1 integrated transportation services 0.181 billion yuan/ -75%, travel services 0.238 billion yuan/ +16%, integrated transportation service gross profit 0.038 billion yuan/ -33%, gross profit margin 21.12% /-13.32pct, travel services 0.066 billion yuan/ +9%, gross profit margin 27.83%/-1.91pct. With the divestment of the transportation business, the share of travel service revenue increased from 23% to 70%, and the gross profit share increased from 50% to 61 %, which combined led to a significant increase in profit margins.

Keep an eye on price increases and asset injection progress. ① Next, on the one hand, we will focus on the continued increase in the number of visitors in 2024 under a high year-on-year basis. At the same time, it is expected that agent settlement prices will increase, driving the growth of the main business in 2024; ② Also, focus on the progress of the Three Gorges Dam Scenic Area management rights injection.

Risk warning: Increased industry competition, weak demand, and uncertain asset injection.