\u3000\u3 Shengda Resources Co.Ltd(000603) 136 Jiangsu Tianmu Lake Tourism Co.Ltd(603136) )
Event: on March 28, the company announced that the controlling shareholder Mr. Meng Guangcai planned to transfer his 16.226 million shares (accounting for about 8.71% of the total share capital of the company) to Liyang urban construction and Development Group Co., Ltd. at the price of 19.98 yuan / share. The total transfer price was about 324 million yuan. This transfer will not lead to changes in the controlling shareholder and actual controller of the company. After the transfer, Meng Guangcai’s shareholding decreased from 34.84% to 26.13%; Liyang Chengfa’s shareholding increased from 11.61% to 20.32%.
The company’s operation ability and performance are recognized by the market
Since the restructuring in 2003, as a private company, the operation efficiency and management ability of the company have attracted the attention of the industry. It is not only a leading leisure tourism enterprise in East China, but also a leading one-stop leisure and vacation destination in China. As of 2019, the gross profit margin of the company has always been higher than 60% since its listing. Under the background of continuous pressure on the overall tourism market after the epidemic, the company has achieved an orderly recovery of performance by relying on high-quality products and excellent operating capacity. In five of the seven quarters since the epidemic, the company has achieved net profit attributable to the parent company, and the gross profit margin has remained 50% in 2020 and the first three quarters of 2021. Tourism industry is one of the pillar industries in Liyang City. Liyang Chengfa’s increased shareholding in the company is also a recognition of the company’s operation experience accumulated in the cultural and tourism industry for many years. “Let professional people do professional things”. In the future, the company is expected to obtain more resource support in the process of building global tourism in Liyang, so as to drive the local economic development.
Clear strategic orientation and internal growth
The company has always been positioned as a national one-stop leisure and vacation destination, regardless of the products or styles of a single scenic spot, and has successfully built many high-quality projects such as Nanshan bamboo sea, landscape garden, Yushui hot spring, water world and so on. On the occasion of its 30th anniversary, the company put forward the strategy of “consolidating the base area, taking root in the Yangtze River Delta, paying attention to urban agglomeration and professional development”, which aims to explore the extension expansion inside and outside the province on the basis of steady development and open up the space for long-term growth. At present, the transformation of hot spring phase I has been put into operation. On August 16, 2021, the company announced that the expected completion period of Nanshan Xiaozhai phase II was postponed by one year to September 2023. According to the construction progress, it is expected that the project will be started in 2022h2. According to the company’s development strategy of “reserving generation, planning generation and landing generation”, the company has sufficient project reserves at present, After the national epidemic situation is stable, it is expected that several high-quality leisure and vacation products will be distributed throughout the country in the future.
The corporate governance system is perfect and the management is experienced
The company adopts a modern corporate governance mechanism. Neither the actual controller nor the immediate relatives of the original shareholders work in the company, and all employees are trained internally and recruited externally. At present, the original shareholders still serving in the company are all professional development and deep cultivation of their respective specialties. The chairman Meng Guangcai is responsible for the overall strategic development of the company. Other original shareholders such as Chen Donghai is responsible for the project investment decision as the leader of the investment department, Tao Ping is responsible for the construction of cultural and tourism projects as the leader of the project construction department, and Shi Yaofeng is responsible for the overall marketing business and subsidiary operation of the company. The current president of the company is a management who has been rooted in the company system for many years and is completely independently trained by the company. He comes from a non original shareholder, but has a rich understanding of the company and the culture and tourism industry. The separation of the board of directors from the senior management also demonstrates the perfection and in place of the corporate governance system.
Investment suggestion: relying on the regional advantages of the Yangtze River Delta and relying on the endogenous extension of its own operation ability, the company continues to develop new projects. Although its short-term performance is repeatedly under pressure due to the epidemic, it benefits from the increased penetration of peripheral tourism / leisure tourism / parent-child tourism in the medium and long term, and its resource position is more stable after the introduction of local state-owned assets. We are optimistic about the high performance flexibility brought by the company’s operation and repair after the epidemic. It is estimated that the net profit attributable to the parent company in 202123 will be RMB 60 / 119 / 149 million respectively, and the corresponding PE will be 60x / 30x / 24x, maintaining the “recommended” rating.
Risk warning: macroeconomic fluctuation risk; Repeated outbreaks exceed the expected risk; The risk of intensified industry competition; The landing of new projects is less than the expected risk; Health and safety risks in scenic spots
