\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 888 China Tourism Group Duty Free Corporation Limited(601888) )
Event: the company released its 2021 annual report and 2022q1 performance: 1) in 2021, the company realized an operating revenue of 67.676 billion yuan / + 28.67%, and a net profit attributable to the parent company of 9.654 billion yuan / + 57.23%. 2) The company’s 2021q4 revenue is 18.177 billion yuan / + 4.1%, and the net profit deducted from non parent company is 1.145 billion yuan / – 61.5%. 3) 22q1, the company realized an operating revenue of 16.782 billion yuan / – 7.45%, and a net profit attributable to the parent company of 2.563 billion yuan / – 9.99%. Previously, the company announced that from January to February 2022, the company realized an operating revenue of about 13.1 billion / + 20%, and the net profit attributable to the parent company was about 2.4 billion / + 20%. It is estimated that the income in March is 3.7 billion yuan / – 49%, and the net profit attributable to the parent company is 160 million yuan / – 81%.
The tax-free Spring Festival on outlying islands continues to exert force, and is under pressure due to the impact of the epidemic in the short term. 1) The local epidemic occurred in Sanya in the middle and early March, and the requirements for nucleic acid detection into and out of the island were further strengthened. The number of visitors to the island decreased significantly month on month. Sanya Haitangwan store closed from 14:00 on March 3 to resume business on March 8 (closed for 4.5 days in total). The pressure on duty-free sales in March was obvious. 2) According to the data of Hainan Provincial Department of Commerce, in 2021, the total sales volume of 10 outlying island duty-free stores in Hainan was 60.17 billion yuan / + 84%, of which the duty-free sales volume was 50.49 billion yuan / + 83%; 9.677 million person times of duty-free shopping / + 73%; The customer unit price is 6218 yuan / + 6%. Among them, the duty-free sales, shopping trips and passenger unit price of 21q4 outlying islands supervised by Haikou customs were 13.9 billion yuan / + 22%, 1.58 million person times / – 7% and 8791 yuan / + 32% respectively. In addition, according to the data of Hainan Department of Commerce, the sales volume of duty-free stores in 2022q1 exceeded 16 billion yuan, of which the daily average during the Spring Festival exceeded 300 million yuan / + 150%. Affected by the epidemic, the daily average fell to about 100 million yuan in March.
The cost rate continued to be optimized, and the gross profit margin increased significantly month on month. The gross profit margin of 2021q4 company was 26.4% / – 13.5pcts, and that of 2022q1 company was 34.0% / – 5.1pcts. The gross profit margin of Q1 increased by 7.6pcts month on month, mainly due to the obvious contraction of the company’s discount since the beginning of this year. The net interest rate of 2022q1 was 17.4%, up 8.9pcts month on month compared with the net interest rate of 2021q4 of 6.6%. The company’s 2022q1 sales expense rate was 8.71% / – 1.06 PCTs (mainly due to the sharp decline in rent under the new airport rent agreement), the management expense rate was 2.57% / + 0.19pct, and the financial expense rate was -0.47% / – 0.49 PCT.
Looking ahead to Q2, the impact of the epidemic still needs to be continuously tracked. Since April, the national epidemic situation has remained at a high level. The epidemic situation in traditional passenger flow source areas of Sanya such as Shanghai and Jilin is serious, and there are sporadic cases in other regions. The national epidemic prevention and control measures are still relatively strict, which is bound to affect the willingness of passenger flow to Hainan. There was a local epidemic in Sanya in April. Sanya Haitang Bay duty-free city closed from 13:00 on April 2 to 14:00 on April 11 (closed for 9 days). However, the traditional may day peak season is expected to be affected under the current epidemic prevention and control background, and Q2 duty-free travel may still be under pressure.
The medium and long-term core logic remains unchanged: since 2020, the China Tourism Group Duty Free Corporation Limited(601888) scale has been promoted to the first in the world, and the liberalization of outbound tourism has yet to be released. It is expected that China free will continue to fully enjoy the return dividend of high-end consumption and maintain a leading position in the world. 1) Hainan: marginal increment of contribution of Haikou international duty free city and Sanya store phase I land 2 project. 2) Online: as a taxable business, online business does not have the barrier of tax-free license, but relying on the advantages of price, shopping experience and other aspects brought by strong supply chain and operation strength, it has strong profitability, which once again proves the strength of the supply chain and operation system other than China exemption license; 3) The new tax exemption policy for Chinese citizens in the city is expected to accelerate the implementation and open up new growth points.
Investment suggestion: buy – a investment rating. The medium and long-term fundamentals of the company are stable, with first mover and scale advantages, and the supply chain has accumulated profound experience. It is expected to continue to share the tax-free incremental dividend. It is estimated that the growth rate of net profit from 2022 to 24 will be 12% / 34% / 36% respectively.
Risk warning: repeated epidemic travel limits the risk; Obvious downside risks of macroeconomic growth; The tax exemption policy dividend is lower than the expected risk; The performance repair of airport duty-free stores is lower than the expected risk; Overseas travel resumed diversion consumption risk.
