\u3000\u3 Shengda Resources Co.Ltd(000603) 885 Juneyao Airlines Co.Ltd(603885) )
Events
Juneyao Airlines Co.Ltd(603885) issued the 2021 annual report on April 19, 2022. The company’s operating revenue in 2021 was RMB 11.767 billion, a year-on-year increase of 16.49% and a decrease of 29.75% compared with 2019; The net loss attributable to the parent company was 498 million yuan, an increase of 24 million yuan year-on-year; Deducting the net loss of 666 million yuan, a year-on-year decrease of 05 million yuan. The performance is basically in line with expectations.
China’s demand recovers rapidly, and China’s line ask exceeds 2019
In terms of RPK, the company’s RPK (revenue passenger kilometers) in 21 years increased by 15.96% year-on-year and decreased by 21.85% compared with that in 19 years. Among them, the demand in China and regions recovered well, the RPK of Chinese routes increased by 19.30% year-on-year, recovered to 92.83% of the level in 2019, and the RPK of regional routes increased by 81.10% year-on-year; International line demand further shrank, with RPK down 68.07% year-on-year. In terms of ask, the company’s ask (available seat kilometers) increased by 15.25% year-on-year in 21 years and decreased by 11.95% compared with 19 years. Among them, the ask of Chinese routes increased by 19.72% year-on-year and increased by 5.55% compared with the same period in 19 years; Ask of regional routes increased by 30.53% year-on-year; Ask on international routes continued to decrease due to the global epidemic, with a year-on-year decrease of 65.18%. In terms of seating rate, as RPK grew faster than ask, the company’s seating rate in 21 years increased by 0.46 percentage points year-on-year to 75.65%, 9.58 percentage points lower than that in 19 years.
Passenger kilometer revenue increased and freight revenue decreased
Passenger transport: in 2021, the revenue per passenger kilometer was 0.409 yuan, a year-on-year increase of 2.17%, including 0.398 yuan for domestic routes, an increase of 7.35%, and 2.380 yuan for overseas routes, a significant year-on-year increase of 41.36%. We believe that it is due to the reduction of international routes. Freight: the freight revenue in 21 years was 509 million yuan, a year-on-year decrease of 17.93%, but still a significant increase of 69.96% compared with 2019, accounting for 4.32% of the company’s air transportation revenue.
Good cost control and rising gross profit margin
During the period, the company’s aviation fuel cost was RMB 3.337 billion, with a significant year-on-year increase of 53.09%, mainly due to the sharp rise in fuel prices and the increase of transportation capacity. However, the overall control of the company’s operating costs is good, with an operating cost of 11.78 billion in 21 years, a year-on-year increase of 14.66%, less than the revenue growth, and the gross profit margin of its main business increased by 1.39 percentage points. The cost of oil deduction was 8.442 billion yuan, a year-on-year increase of only 4.31%, far lower than the growth rate of revenue. However, the financial expenses during the period increased by 43.97% year-on-year to 540 million yuan, mainly due to the significant increase in interest expenses caused by the implementation of the new leasing standards.
Investment advice
As a private airline company, with Shanghai as the main operation base, the company has obvious business efficiency and market advantages. The “full service + low cost” model is expected to obtain a greater market share. Under the background of the mismatch between supply and demand in the civil aviation industry during the 14th Five Year Plan period, it is expected that the passenger occupancy rate may increase and the revenue level of the airline company will improve. However, affected by the unstable global epidemic situation and the sharp rise in oil prices, it is expected that the company will still be difficult to make profits in 2022. International routes are expected to begin to be opened in 2023. The company will benefit from the double dividend of the growth of international line revenue and the continuous improvement of China line revenue. We lowered the previous forecast of the company’s net profit in 2022 from 2.01 billion yuan to -469 million yuan, increased the forecast of net profit attributable to the parent company in 2023 and 2024 to 347 million yuan and 863 million yuan, and maintained the “buy” rating.
Risk tip: the recovery of the epidemic situation in various regions is less than expected, the oil price rises sharply, the RMB depreciates sharply, China’s economic growth is less than expected, and aviation safety incidents.
