\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 888 China Tourism Group Duty Free Corporation Limited(601888) )
Event: on the evening of April 22, 2022, China Tourism Group Duty Free Corporation Limited(601888) released the annual report of 2021 and the statement of the first quarter of 2022. In 2021, the company achieved a revenue of 67.676 billion yuan, a year-on-year increase of +28.7%; The net profit attributable to the parent company was 9.654 billion yuan, a year-on-year increase of + 57.2%; Deduct the net profit not attributable to the parent company of RMB 9.534 billion, a year-on-year increase of + 59.77%. Split into quarters, the company's revenue in 2021q4 and 2022q1 was 18.177/16.782 billion yuan respectively, with a year-on-year increase of + 4.1% / - 7.5% respectively; The net profit deducted from non parent company was 1.145/2.559 billion yuan respectively, with a year-on-year increase of - 61.5% / - 9.7% respectively.
Affected by the epidemic, the revenue and profit in March 2022 were under pressure. It is estimated that the company achieved an operating revenue of 3.68 billion yuan and a net profit attributable to the parent company of 160 million yuan in March, a decrease of about 49% and 81% respectively compared with the revenue of 7.22 billion yuan and the net profit attributable to the parent company of 850 million yuan in the same period last year. It is mainly affected by the confirmed covid-19 epidemic in Sanya and Haikou since March. At present, Haikou and Sanya have successively cleared their social aspects, and the suspended duty-free stores have been opened successively. It is expected that with the gradual control of the epidemic in Shanghai and the subsequent unsealing, they will climb slowly and resume normal operation.
Attach importance to high-quality development, and the gross profit margin and parent net profit margin in the first quarter rebounded significantly month on month. The gross profit margin of 2021q4 / 2022q1 was 26.4% / 34.0% respectively, with a year-on-year decrease of 13.5 / 5.1 percentage points respectively, and 2022q1 significantly increased by 7.6pct compared with 2021q4. The company has achieved the restoration of gross profit margin by narrowing the discount since new year's day in 2022. The net interest rate attributable to the parent company rebounded sharply, with a significant increase of 8.9pct in 2022q1 compared with 2021q4.
Sales in Hainan market accounted for more than 70% of the total revenue, becoming the largest source of profit contribution. The sales revenue in Hainan market accounted for more than 76% of the total revenue in 2021, which was further increased by more than 17 percentage points compared with 2020 (the revenue of Phoenix Airport store was not disclosed); Contribute 51% of the total net profit of the parent company. According to the disclosure of the Department of Commerce of Hainan Province, the total sales volume of duty-free shops on Hainan outlying islands exceeded 60 billion yuan in 2021. It is estimated that the market share of China free is more than 78%, which is still the leader of the industry.
In 2022, the business objective is to make progress while maintaining stability and consolidate the leading position in the tax-free market of outlying islands. The company announced five key tasks in 2022, taking seeking progress while maintaining stability as the overall business goal and taking the operation of Haikou international duty-free city as an opportunity to consolidate the leading position of outlying island duty-free market.
Profit forecast and investment rating: given that there is still room for tax exemption policy, the liberalization of epidemic control and the restoration of international routes are conducive to the market expansion of tax-free industry again; The market position of China tax exemption is stable. The newly added outlying island duty-free benchmark stores will be put into operation in 2022 / 2023 to re-enter the channel of increasing market share. China Tourism Group Duty Free Corporation Limited(601888) as the leader of tourism retail in the medium and long term, it will benefit from the gradual recovery of cross provincial and outbound tourism. Considering that the Hainan tourism retail market is still under pressure due to the epidemic from April to may, the company's profit expectation is slightly lowered. It is expected that the net profit attributable to the parent company from 2022 to 2024 will be 10.83/15.5/16.6 billion yuan respectively, corresponding to 32 / 23 / 21 times of PE, maintaining the "buy" rating.
Risk tip: the spread of the epidemic exceeded market expectations, and the recovery of residents' Consumption Willingness was less than expected
