\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 888 China Tourism Group Duty Free Corporation Limited(601888) )
Event: China Tourism Group Duty Free Corporation Limited(601888) announced that it is expected to realize a net profit attributable to the parent company of about 2.4 billion yuan from January to February. The company released the announcement of main business data from January to February 2022. It is expected to realize an operating revenue of about 13.1 billion yuan during the period, with a year-on-year increase of 20%; The net profit attributable to the parent company is expected to be about 2.4 billion yuan, with a year-on-year increase of 20%, and the net profit attributable to the parent company is expected to be 18.32%.
The implementation of income tax preference superimposed on the reduction of off Island discount, and the net interest rate attributable to the parent company increased significantly. The announcement predicts that from January to February 2022, the net interest rate attributable to the parent company will be 18.32%, an increase of 2.6pct compared with 2021q1. On September 30, 2021, the company announced that six subsidiaries such as Haitang Bay, Haimian and Meilan Airport can enjoy the preferential corporate income tax rate of 15%. The past income tax preference will be reversed at one time in Q3, 2021. The impact of the preferential income tax rate has actually been reflected since Q4, 2021q. It is expected that the company’s subsequent profitability will be slightly improved. The tax-free discount rate of superimposed outlying islands has narrowed, and the net interest rate attributable to the parent has increased significantly.
The passenger flow in the island recovered smoothly, enabling the tax-free sales in the outlying islands to increase. From January to February 2022, the cumulative passenger throughput of Haikou Meilan International Airport was about 3.62 million person times, with a year-on-year increase of 35.7%, returning to 74% of the level in the same period in 2019; Sanya Phoenix International Airport has a total passenger throughput of about 3.6 million person times, a year-on-year increase of about 26.6%, returning to 85% of the level in the same period in 2019. January and February are the peak tourist seasons in Hainan, and the superimposed passenger flow recovers smoothly, providing impetus for the growth of tax-free sales on outlying islands.
Investment suggestion: the company’s cost control ability, profit margin level and operation have a significant scale effect, which is brought about by the characteristics of tax-free industry license and the absolute influence of the company. Three factors are expected to further enhance the company’s scale advantage and profitability: (1) the penetration rate on the demand side is improved; (2) the company’s continuous category improvement and operation improvement on the supply side; (3) the new harbor project further strengthens and improves the volume, SKU and customer group coverage. It is estimated that the net profit attributable to the parent company in 2021, 2022 and 2023 will be 9.591 billion yuan / 11.757 billion yuan / 16.509 billion yuan respectively, and the corresponding PE will be 38.02/31.02/22.09 respectively. Raised to buy rating.
Risk tips: repeated outbreaks have hindered population mobility; Risk of intensified competition on the island
