\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 888 China Tourism Group Duty Free Corporation Limited(601888) )
Event comments
On March 10, 2022, the company released the announcement of main business data from January to February 2022. From January to February 2022, the company achieved an operating revenue of about 13.1 billion yuan, a year-on-year increase of about 20%; The net profit attributable to the parent company was about 2.4 billion yuan, a year-on-year increase of about 20%. The performance is in line with expectations.
Sanya International duty-free city has resumed business, and online sales have increased, which is expected to gradually eliminate the impact of the epidemic. Since March 3, Sanya International duty-free city has suspended its business in cooperation with epidemic prevention. During this period, it has increased online sales such as live broadcasting, and the discount of hot incense products has reached 70-80%. On the evening of March 7, the company issued a notice that the first and second phases of CDF Sanya international duty free city resumed business from March 8, indicating that the factors affecting the epidemic in Sanya have been gradually eliminated. We believe that the short-term impact of the Sanya epidemic is not expected to cause a downturn in performance in the first quarter. The increase in online sales is expected to accelerate the company’s sales repair and gradually eliminate the adverse impact of the epidemic.
The company plans to increase the profit side assessment, which is expected to show the continuous growth of performance and the continuous improvement of profitability under the support of deepening the relationship with suppliers + product structure and service upgrading + national policy support. In 2022, the company increased the profit side assessment. At present, in terms of tax exemption on outlying islands, the company has reached about 10000 yuan in passenger unit price, which still has broad room for improvement from the 100000 yuan limit stipulated by the national policy. At the same time, the company attaches importance to the upgrading of product structure and the increase of the proportion of high gross profit categories such as fali jewelry and watches. With the further deepening of the relationship between the company and suppliers, the negotiation ability and influence with upstream suppliers are expected to gradually improve. The new harbor duty-free city is expected to open in September this year, and will reach a new height in creating a sense of experience and rich categories. The company continues to improve its strength in terms of brand introduction and service upgrading, which is expected to boost the continuous improvement of profitability. At present, there are repeated epidemics in some areas, and the road to recovery of the prosperity of tax-free, tourism and other industries is not smooth. However, the national tourism industry plan for the 14th five year plan reflects the importance attached to tax exemption and tourism development. At the same time, relief policies such as tax relief have been successively issued to support tourism, tax exemption, catering, hotel and other industries significantly affected by the epidemic. We believe that the prosperity of the industry is expected to continue to rebound and boost the company’s performance to achieve sustained and rapid growth.
Investment advice
At present, Sanya International duty-free city has resumed business and increased online sales, which is expected to gradually eliminate the impact of the epidemic. The company is expected to show sustained growth of performance and continuous improvement of profitability under the support of deepening the relationship with suppliers + upgrading of product structure and services + national policy support. Maintain a “strongly recommended” rating.
Risk tips
Repeated epidemic impact; Macroeconomic fluctuations; Policy fluctuation risk.
