China Tourism Group Duty Free Corporation Limited(601888) (601888)
event:
On December 14, the company announced that it planned to acquire 100% equity of China Hong Kong China Travel Asset Management Co., Ltd. held by China Travel Group investment and Asset Management Co., Ltd., a wholly-owned subsidiary of China Travel Group, in cash by means of non-public agreement transfer, with a transaction price of RMB 126 million.
comment:
The purchase price is higher than the book premium, mainly due to the appreciation of buildings and parcel assets
This transaction refers to the company's purchase of equity assets from the wholly-owned subsidiary of the controlling shareholder, that is, the company plans to purchase 100% equity of Hong Kong China Travel assets company held by China Travel assets in cash by means of non-public agreement transfer. According to the valuation results of the appraisal institution, the appraisal price of Hong Kong China Travel assets Co., Ltd. is 126 million yuan, an increase of 114 million yuan over the book value, mainly due to the large increase in the value of the commercial buildings and the parcel of land held by Hong Kong China Travel assets.
The acquisition helps to solve horizontal competition and lay out the duty-free market in the post epidemic era
At present, Harbin overseas Chinese, a subsidiary of Hong Kong China Travel asset company, has the qualification of Chinese duty-free goods business, and can participate in the bidding of duty-free operation right nationwide. It is possible to compete with the company in the same industry. The company can eliminate the problem of horizontal competition through this acquisition. At the same time, Harbin overseas Chinese can operate local duty-free shops for returning home, which is the only missing link of the company's tax-free license at present. After the acquisition, the company can further integrate the current tax-free license resources, rely on the existing urban layout of outbound duty-free stores, and further extend the business links to inbound duty-free stores, so as to pave the way for the liberalization of cross-border travel in 2022-23.
Investment advice
It is expected that from the fourth quarter of this year to the peak season of the first quarter of next year, the recovery of offline passenger flow in Hainan is expected to drive the recovery of the company's operating margin. In the medium and long term, the tax-free market space of outlying islands remains unchanged, and the company has significant competitive advantages. After the implementation of Haikou and Sanya heavy projects in 2022-2023, it can further undertake the dividend of tax-free policy of outlying islands. It is estimated that the company's net profit attributable to the parent company from 2021 to 2023 will be 10.9 billion yuan, 15.1 billion yuan and 19 billion yuan, with corresponding PE of 41x, 30x and 24x respectively. The current valuation matches the performance growth rate, has significant cost performance, and maintains the "buy" rating.
Risk statement
Risk of repeated epidemic in China; The progress of new project construction and climbing is lower than expected.
