\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 888 China Tourism Group Duty Free Corporation Limited(601888) )
Performance summary:
In 2021, the total operating revenue was 67.68 billion, a year-on-year increase of 28.7%, and the net profit was 9.65 billion, a year-on-year increase of 57.2%. 4q achieved a revenue of 18.18 billion, a year-on-year increase of 4.1%, and recorded a net profit of 1.16 billion, a year-on-year decrease of 60.9%. In 2022q1, the revenue was 16.78 billion, a year-on-year decrease of 7.5%, and the net profit was 2.56 billion, a year-on-year decrease of 10%. Dividend scheme: cash dividend of 15 yuan for every 10 shares.
From the perspective of the whole year, the growth rate of the profit side in 2021 far exceeded that of the income side, mainly due to the return of the capital airport to withdraw the rent in the third quarter and the tax return obtained by the Hainan subsidiary. On a year-on-year basis, 4q’s performance decreased significantly compared with the same period in 20 years, mainly due to the high base period caused by 4q’s reversal of a large number of accrued airport rents in 2020, the decline in tourism popularity in Hainan caused by repeated domestic winter epidemics, and the increase in 4q promotion discounts (the gross profit margin decreased by 13.5 percentage points to 26.4% year-on-year). In terms of expenses, affected by the reversal of accrued rent, the annual comprehensive expense rate decreased by 9.93 percentage points year-on-year to 8.97%, and the 4Q expense rate remained stable at 14.7% month on month.
At the beginning of 2022, although the company’s main business maintained rapid growth from January to February, the operation of the company’s offshore duty-free stores was impacted by the outbreak of the Chinese epidemic in March. According to the previously published data from January to February, the monthly revenue in March was 3.68 billion, a year-on-year decrease of 49%, and the net profit was 160 million, a year-on-year decrease of 81%. Due to the epidemic in Hainan, Sanya duty-free shop of the company was suspended from April 2 to April 11. Generally speaking, the epidemic in the second quarter is still serious, and the performance is expected to continue to be under pressure in a short time.
From the perspective of gross profit margin, the gross profit margin of 22q1 rose 7.6 percentage points to 34% month on month, mainly benefiting from the narrowing of discount since new year’s day. In the short term, due to the epidemic, the discount may be increased to reduce inventory, but the annual gross profit margin is expected to maintain the recovery trend, and the price war of duty-free stores will be slowed down. In terms of expenses, the expense rate of 22q1 decreased by 1.36 percentage points to 10.8% year-on-year, mainly due to the year-on-year decrease of 1.06 percentage points in the sales expense rate.
Throughout the year, we expect that the company will continue to consolidate the competitive advantage of Hainan market (the revenue of Hainan sector will account for 76% and the profit will account for 51% in 2021). The 150000 square meters Haikou international duty-free city is planned to be opened to the outside world at the end of the third quarter, which is expected to benefit from the improvement of the epidemic situation; Procurement and investment promotion will continue to strengthen the connection with high-quality brands and optimize member management and services. The total number of members in the whole year is expected to exceed 26 million. In the post epidemic market, the company will also continue to bid for duty-free shops at ports (won the bid for three duty-free operation rights at Suifenhe railway port, Taiyuan airport and Quanzhou Shijing port in 21 years, and completed the preparation of duty-free shops such as Chengdu Tianfu airport, Qingdao Jiaodong airport, Ningbo Lishe Airport and Yiwu Airport), and actively carry out strategic cooperation with key cities to layout duty-free shops in the city.
Considering the epidemic situation, the profit forecast is lowered. It is estimated that the net profit will be 10.6 billion and 14.3 billion respectively from 2022 to 2023, with a year-on-year increase of 10% and 35% respectively. The EPS will be 5.43 yuan and 7.33 yuan respectively. The current share price corresponds to 33 times and 24 times of PE respectively. It is suggested to “interval operation” investment.
