\u3000\u3000 Juneyao Airlines Co.Ltd(603885) (603885)
Event: the company issued the announcement of pre loss of performance in 2021. The net loss attributable to the parent company in 2021 is expected to be about 330 million yuan to 420 million yuan, a decrease of 50 million yuan to 140 million yuan compared with the loss in the same period of last year (470 million yuan); Among them, the net loss attributable to the parent company in the fourth quarter of 2021 is expected to be about 280 million yuan – 370 million yuan, changing from profit to loss compared with the same period in 2020 (profit of 06 million yuan), and expanding by 130 million yuan – 220 million yuan compared with the loss of the company in the third quarter of 2021 (150 million yuan). The company expects to deduct non net loss of about 470 million yuan to 550 million yuan in 2021, which is 120 million yuan to 200 million yuan lower than the loss of the same period last year (670 million yuan); In the fourth quarter of 2021, the company expects to deduct a net loss of about 410 million yuan to 490 million yuan.
China’s aviation demand recovered and China’s route ask rebounded. In 2021, the company’s ask (available seat kilometers) increased by 15.3% over the same period in 2020 and decreased by 12.0% over the same period in 2019. Among them, China’s passenger transport demand recovered well. In 2021, the ask of Chinese routes increased by 19.7% over the same period in 2020 and 5.5% over the same period in 2019; The supply and demand of overseas airlines are still at a low level. In 2021, the ask of international routes and regional routes decreased by 91.6% and 68.3% respectively compared with the same period in 19 years. The company’s comprehensive seating rate in 2021 was 75.7%, an increase of 0.46 PCT over the same period in 2020 and a decrease of 9.58 PCT over the same period in 19 years. At the end of December 2021, the company operated 110 passenger planes (including Jiuyuan Airlines), an increase of 12.2% over the end of 2020, higher than the growth rate of the same period last year (2.1%).
The overall passenger turnover rebounded year-on-year, and the revenue increased year-on-year in the first three quarters of 21 years. China’s aviation demand recovered in 2021. Shanghai and other places where the company’s main base is located are less affected by the local epidemic in China, but Nanjing and other places where the company’s main base is located are more affected by the epidemic in China. The passenger turnover of the above companies increased by 16.0% year-on-year in 2021, of which the passenger turnover of Chinese routes, international routes and regional routes changed by + 19.3%, – 68.1% and + 81.1% year-on-year respectively. In the first three quarters of 2021, the company achieved an operating revenue of 9.13 billion yuan, an increase of 27.3% over the same period in 2020 and a decrease of 29.8% over the same period in 2019.
The sharp rise in oil prices had a negative impact, and the fixed increase boosted the profitability of the company. The annual average price of Brent crude oil in 2021 was about US $70.9/barrel, which was significantly higher than that in 2020 (US $43.0 / barrel), which put great pressure on the operating cost of the company. Considering the superimposed cost rigidity, the company still could not make a profit in 2021. The company plans to increase 3.3 billion yuan for the introduction of aircraft and standby engine projects and the repayment of bank loans. After the funds raised this time are in place, the company’s transportation capacity and business scale will be effectively improved, the airline operation capacity will be expanded, and the company’s operating revenue and profitability will be further improved.
Investment suggestion: the epidemic situation outside China is repeated, the recovery of air passenger transport demand is negatively impacted, and the company’s short-term performance is under pressure; With the continuous advancement of covid-19 vaccine / treatment technology, the demand for air passenger transport will gradually recover, and the company will return to the growth track. Considering that the covid-19 epidemic lasted longer than expected, we lowered the company’s net profit forecast for 21-22 years to – 400 million yuan and + 540 million yuan respectively (originally + 30 million yuan and + 720 million yuan). We think there will be a significant recovery in overseas aviation demand in the second half of next year, and raised the net profit forecast for 23 years to 1.13 billion yuan (originally 1.08 billion yuan); Based on the company’s future fundamentals will gradually improve, maintain the company’s “overweight” rating.
Risk warning: the duration of covid-19 epidemic exceeded market expectations; The sharp decline of macro economy leads to the decline of industry demand; Sino US trade frictions continue to ferment, and the RMB exchange rate fluctuates greatly; Crude oil prices rose sharply.
