Event: The company released its 2024 three-quarter report. With 2024Q1-3, the company achieved revenue of 13 billion yuan (after adjustment) of -12.0%; net profit to mother of 0.92 billion yuan, or -19.2% year-on-year; deducted non-net profit of 0.9 billion yuan, -12.12% YoY. Corresponding to 2024Q3, the company's revenue was 4.02 billion yuan, -13.0% year on year; net profit to mother was 0.211 billion yuan, -12.43% year over year; after deducting non-net profit of 0.2 billion yuan, -9.12% year over year. The decline in Q3 companies' performance was narrower compared to the first half of the year.

By business, consumer profits soon grew, and the main retail business was still under pressure: 2024Q3, ① The company's investment income was about 0.15 billion yuan, mainly contributed by Immediate Consumer Finance (hereinafter referred to as Ma Shao), which participated in shares, +95% year-on-year (all before adjustments). ② After deducting Ma Xing, the net profit of the main retail business was 0.064 billion yuan, -56% over the same period last year. 2024Q3's profit margin is relatively stable. The reason for the year-on-year increase is that the main retail business declined mainly due to weak overall offline consumer demand and the decline in the company's auto trade business (which previously mainly operated high-end fuel vehicles).

In terms of profit margin: 2024Q3, the company's gross margin/net sales margin was 24.4%/5.2%, year-on-year, -0.85/ -0.28pct. We believe the increase in net profit margin mainly benefited from the increase in investment income in Malaysia.

The company's sales/management/ R&D/ finance rates were 14.82%/5.24%/0.08%/0.34%, respectively, +0.98/ +0.58/ -0.06/ -0.21pct.

Looking forward to subsequent consumer stimulus policies to promote the recovery of the company's main retail business: ① The company's electronics sector is expected to benefit from the national supplement trade-in policy. According to the official website of the Chongqing government, several stores from Zhongbai Trading Company and Zhongbai Century Connect have been selected for the Chongqing 2024 trade-in policy subsidy. ② The recovery in consumption is expected to drive Q4 performance. China's total volume in September exceeded unanimous expectations. At the same time, the company's Q4 performance base was low last year. We are optimistic that the 2024Q4 company will recover its performance.

Profit forecast and investment rating: We adjusted the company's fair value profit and impairment loss expectations based on the three-quarter report, and adjusted the company's 2024-26 net profit forecast from 13.3/ 14.0/ 1.47 billion yuan to 12.3/13.3/ 1.44 billion yuan, compared to -6%/+8%/+8%, corresponding to the closing price of October 30 8/7/7 times P/E, considering the company's current low valuation, high historical dividend rate, and excellent asset quality in the industry, we are still Maintain a “buy” rating.

Risk warning: increased competition in the industry, sluggish demand for terminal consumers, changes in consumer finance operations and policies, etc.