\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 888 China Tourism Group Duty Free Corporation Limited(601888) )
Key investment points:
Event: the company released its 2021 annual report and the first quarter report of 2022 on April 22. In 2021, the operating revenue was 67.676 billion yuan, a year-on-year increase of 28.67%; The total profit was 14.801 billion yuan, a year-on-year increase of 53.04%; The net profit attributable to shareholders of listed companies was 9.654 billion yuan, a year-on-year increase of 57.23%. In the first quarter of 2022, the company achieved a revenue of 16.782 billion yuan, a year-on-year decrease of 7.45%, and a net profit attributable to the parent company of 2.563 billion yuan, a year-on-year decrease of 9.99%.
Comments:
The company’s performance in 2021 was in line with expectations, and its profitability improved month on month in the first quarter of 2022. In 2021, the company achieved an operating revenue of 67.676 billion yuan, a year-on-year increase of 28.67%; The total profit was 14.801 billion yuan, a year-on-year increase of 53.04%; The net profit attributable to the parent company was 9.654 billion yuan, a year-on-year increase of 57.23%. In 2021, the gross profit margin of the company’s main business was 33.08%, a year-on-year decrease of 7.14 percentage points, or because the intensification of tax-free competition in Hainan outlying islands in 2021 led to the increase of the company’s discount and the proportion of online business with low gross profit. In the first quarter of 2022, the company achieved a revenue of 16.782 billion yuan, a year-on-year decrease of 7.45%, and a net profit attributable to the parent company of 2.563 billion yuan, a year-on-year decrease of 9.99%. From January to February 2022, the company’s main business maintained rapid growth, but since March, the sporadic epidemic in China has spread to many provinces and cities. Sanya Haitang Bay International duty-free city was temporarily closed due to the epidemic, which impacted the company’s operation. The gross profit margin of 22q1’s main business was 33.43%, an increase of 8.1 percentage points month on month, the discount was narrowed month on month, the profitability was significantly improved, and the balanced development of revenue and profit was realized.
The tax-free business of Hainan outlying islands maintained a high growth. In 2021, the company’s tax-free income from Hainan outlying islands maintained a high growth, of which the duty-free stores in Sanya achieved an operating income of 35.509 billion yuan, a year-on-year increase of 66.58%, and a net profit attributable to the parent company of 4.168 billion yuan, a year-on-year increase of 40.46%; Haimian achieved an operating revenue of 15.962 billion yuan, a year-on-year increase of 61.05%, and a net profit attributable to the parent company of 793 million yuan, a year-on-year increase of 20.75%. The operating income in Shanghai was 12.491 billion yuan, a year-on-year decrease of 9.02%, accounting for 18.66% of the main business income.
Maintain recommended ratings. The company’s total operating revenue in 2021 was in line with expectations, and its profitability was significantly improved in the first quarter of 2022, realizing the balanced development of revenue and profit. In the long run, the implementation of the tax exemption policy can be expected. The company occupies the core tax exemption points of airports and outlying islands in advance, with a significant first mover advantage. Recently, China’s sporadic epidemic has been repeated, and tourism travel is limited in the short term. The company’s earnings per share in 2022 / 2023 have been reduced to 5.50 yuan and 6.17 yuan, corresponding to PE valuations of 32.2 times and 28.69 times respectively, maintaining the “recommended” rating of the company.
Risk warning. The intensification of industry competition has led to the increase of discounts, covid-19 epidemic has repeatedly affected passenger flow, the proportion of inventory is relatively high, the implementation of tax exemption policy is less than expected, macroeconomic impact, etc.
