\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 111 Air China Limited(601111) )
Event: the company released the annual report of 2021. In 2021, the company achieved an operating revenue of about 74.5 billion yuan, a year-on-year increase of 7.2%; The net loss attributable to the parent company was about 16.6 billion yuan, an increase of about 2.2 billion yuan over the loss of the previous year (14.4 billion yuan), which was near the lower limit of the performance pre loss range; The net loss after deduction of non parent company is about 17.1 billion yuan, an increase of about 2.3 billion yuan over the loss of the previous year (14.7 billion yuan), which is near the lower limit of the performance pre loss range.
China’s aviation demand recovered, and the company’s Chinese route ask rebounded. The company’s ask (available seat kilometers) in 2021 decreased by 2.3% compared with the same period in 2020 and 47.0% compared with the same period in 2019. Among them, China’s passenger transport demand recovered well. The ask of Chinese routes in 2021 increased by 77% compared with the same period in 2020 and recovered to 87% in the same period in 2019; The supply and demand of overseas airlines is still at a low level. The ask of international and regional routes in 2021 is only 3.8% and 22% of that in the same period of 19 years. The company’s comprehensive seating rate in 2021 was 68.6%, a decrease of 1.74 PCT compared with the same period in 2020 and 12.4 PCT compared with the same period in 19 years. In 21 years, the daily utilization rate of the company’s aircraft was 6.28 hours, a year-on-year decrease of 0.06 hours. The company operated 746 passenger planes at the end of December 2021, an increase of 6.3% over the end of 2020, higher than the growth rate of the same period last year (1.2%).
Passenger kilometer revenue rebounded, driving the year-on-year recovery of passenger revenue. In 2021, the company’s passenger kilometer revenue was 0.5574 yuan, an increase of 9.9% over the same period in 2020 and 4.4% over the same period in 2019. Among them, the passenger kilometer revenue of China, international and regional regions changed by + 14.0%, + 126% and – 15.3% over 2020. Under the influence of comprehensive volume and price, the passenger revenue of the company in 2021 was 58.3 billion yuan, an increase of 4.6% over 2020 and a decrease of 53.2% over 2019.
Revenue from freight business maintained growth. Due to the repeated overseas outbreaks, air cargo still maintains a high degree of scenery. In 2021, the company achieved a revenue of 11.1 billion yuan from cargo and mail transportation, a year-on-year increase of 29.9%, a year-on-year increase of 20.9% in cargo and mail turnover, and a year-on-year increase of 7.4% in revenue per ton kilometer of cargo and mail.
Oil prices rose sharply and the gross profit margin continued to be under pressure. Due to the rigidity of depreciation and maintenance costs, the depreciation and maintenance costs of the company increased by 4.0% and 7.6% year-on-year respectively in 2021; The annual average price of Brent crude oil in 2021 was about US $70.9/barrel, which was significantly higher than that in 2020 (US $43.0 / barrel), putting great pressure on the company’s operating cost. The company’s aviation fuel cost in 2021 increased by 39.7% year-on-year, accounting for about 24.1% of its main operating cost. Based on the above, the company’s main operating cost increased by 13.5% year-on-year in 2021, significantly higher than the revenue growth in the same period. Affected by this, the gross profit margin of the company’s main business in 2021 was – 15.2%, a year-on-year decrease of 6.4pct. In addition, Cathay Pacific Airlines and Shanhang Airlines invested by the company brought about a loss of about 1.1 billion, which was significantly lower than the loss in the same period of last year (6.6 billion yuan).
Investment suggestion: the epidemic situation outside China has been repeated, and the recovery of air passenger transport demand has been negatively impacted. We believe that the growth logic and location advantages of head airlines have not changed substantially due to the epidemic situation; With the continuous advancement of covid-19 vaccine / treatment technology, the demand for air passenger transport will gradually recover, and the revaluation of the company’s value is a deterministic event. Based on the longer duration of covid-19 epidemic than expected, we lowered the company’s net profit forecast for 22-23 years to – 8.4 billion yuan and + 2.5 billion yuan respectively (originally – 5.5 billion yuan and + 3.8 billion yuan), and increased the net profit forecast for 2024 by 6.4 billion yuan; Based on the gradual improvement of the company’s fundamentals, maintain the “overweight” rating of the company’s A-Shares and H shares.
Risk warning: the duration of covid-19 epidemic exceeded market expectations; The sharp decline of macro economy leads to the decline of industry demand; Sino US trade frictions continue to ferment, and the RMB exchange rate fluctuates greatly; Crude oil prices rose sharply.
