\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 888 China Tourism Group Duty Free Corporation Limited(601888) )
The company released the announcement of main business data from January to February 2022, realizing an operating revenue of about 13.1 billion yuan, a year-on-year increase of about 20%; The net profit attributable to the shareholders of the listed company was about 2.4 billion yuan, with a year-on-year increase of about 20%. The company focused on key markets and maintained rapid growth in its tax-free main business.
Key points supporting rating
The net interest rate has been repaired brightly, and Q1 is expected to maintain a considerable growth rate. From January to February, the company achieved a revenue of about 13.1 billion yuan and a net profit attributable to the parent of about 2.4 billion yuan, with an average year-on-year increase of about 20%. The net interest rate increased by about 2.61% compared with Q1 in 21 years and 12.26% compared with Q4. The company paid close attention to the opportunities of peak seasons such as new year’s day and Spring Festival, and still recorded a considerable growth rate under the background of advocating local Chinese New Year celebrations throughout the country and on the basis of high base performance in the same period last year. Affected by the epidemic, Sanya duty-free City Phase II was suspended on March 3 and immediately resumed on March 8. It is expected that the impact will be small. In addition, the company continues to strengthen online business planning and improve business flexibility under risk. The company’s 22q1 is expected to maintain a year-on-year growth trend.
Tax free consumption in Hainan continued to expand, and confidence in policy objectives was strengthened. The government work report of Hainan Province in 2022 pointed out that striving to achieve the sales target of 100 billion yuan of duty-free shops on outlying islands will increase by 66.2% compared with 2021. In addition, moodiedavitt report shows that the tax-free income gap between Hainan and South Korea will shrink from 19.4 billion US dollars to 5.27 billion US dollars from 2019 to 2021. With Hainan striving to build a global consumer boutique display and trading platform and the first destination for China to replace outbound consumption, The duty-free market in Hainan is expected to further expand. As a leader, the company is expected to absorb the momentum of expanding consumption and contribute to the main sales volume of the whole province.
The cooperation between the project and the brand will be promoted together, and there will be broad incremental space in the future. The No. 2 land project of Sanya duty free city phase I has achieved the capping of the main structure in January 22, and the hotel industry of the project has signed a contract with intercontinental group; Haikou duty-free city is expected to open in September 22, with characteristic investment attraction and differentiated positioning; The company’s first store in Macao, China, opened at the end of 22, realizing the strategic layout of Dawan district. The company cooperates with more than 1000 brands around the world and has strong bargaining power and brand cooperation potential. According to Tencent, top luxury brands successively announced plans to withdraw cabinets from Korean duty-free stores at the beginning of the year. The cooperation between the company and top luxury is expected to be gradually implemented. On the basis of rich channels and brands, the company has a broad space for revenue increment.
Valuation
The company continues to expand channels and explore incremental space. Under the establishment of Hainan tax exemption target, the company’s performance growth as a leader and market expansion are expected to complement each other. We expect the company’s EPS to be 4.91/6.53/8.53 yuan in 21-23 years, with corresponding P / E ratios of 38.0/28.6/21.9 times respectively, maintaining the buy rating.
Main risks of rating
The opening of the country has diverted sales to outlying islands, intensified competition in the tax-free market, and the implementation of the policy is less than expected.
