\u3000\u30 Zhongyan Technology Co.Ltd(003001) 44 Songcheng Performance Development Co.Ltd(300144) )
Events
The net profit attributable to the parent company in 2020 was rmb1.552 billion (rmb1.183 billion + 1.52y billion) and the net profit attributable to the parent company in 2020 was rmb1.552 billion (rmb1.752 billion + 1.585 billion). In 2021q4, the revenue in a single quarter was 169 million yuan (yoy-40.43%), the net loss attributable to the parent was 117 million yuan (1.886 billion yuan in the same period in 2020), and the net loss not attributable to the parent was 102 million yuan (1.879 billion yuan in the same period in 2020). In 2022q1, the single quarter revenue was 85 million yuan (yoy-72.16%), the net loss attributable to the parent company was 39 million yuan (yoy-129.15%), and the net loss not attributable to the parent company was 40 million yuan (yoy-130.85%). The company plans to transfer 100% equity of Zhuhai Subsidiary to Songcheng group, which will be responsible for the construction and incubation of Zhuhai performing arts park. Songcheng group will entrust Songcheng Performance Development Co.Ltd(300144) to operate and manage the Performing Arts Park. The company plans to transfer 100% of the equity of the Hong Kong subsidiary to Songcheng group. The main assets of the Hong Kong subsidiary are the legendary project in Australia.
Key investment points
The epidemic has repeatedly impacted the main performing arts industry and promoted the upgrading of the model of performing arts parks against the trend. 1) Since 2021q3, the epidemic has been repeated, and many scenic spots have been closed in stages. In 2021, Hangzhou headquarters launched an outdoor version of eternal love, live performance and light and shadow show to carry out Halloween, Christmas and new year's day themed activities for young people, realizing an income of 486 million yuan (YoY + 69.4%), which recovered to 57.45% in 2019. In 2021, Shanghai Songcheng realized an income of 74 million yuan (the park was closed in winter from November to December), and recorded a net loss of 52 million yuan. During the closing period, the company improved the diversity of content, upgraded the existing plays, and completed the rehearsal of new performances. The annual income of Guilin / Sanya / Lijiang projects recovered to 58.9% / 40% / 35.5% in 2019 respectively, and the net profit was 860000 yuan / 54 million yuan / 34 million yuan respectively. The revenue of Jiuzhai / Zhang Jia Jie Tourism Group Co.Ltd(000430) / Xi'an project was + 77.2% / + 29.1% / - 32.9% year-on-year respectively. Asset light projects achieved a revenue of 102 million yuan (restored to 69.4% in 2019). 2) The epidemic situation in 2022q1 rebounded seriously and the prevention and control policies became stricter. Except for Sanya, Lijiang and Guilin projects, other scenic spots were basically closed. The epidemic is still the biggest uncertainty in the industry. We should pay attention to the improvement of the epidemic and the recovery process.
The gross profit margin was under pressure due to the decline of revenue, and the apparent expense rate increased significantly in 2022q1: the gross profit margin of the company was 51.1% (yoy-9.84pct) in 2021, mainly due to the decline of passenger flow under the epidemic; The gross profit margins of Hangzhou / Sanya / Lijiang / asset light projects are 43.45% / 67.5% / 57.6% / 95.85% respectively. The management expense rate was 21.6% (yoy-10.3pct); The sales expense rate was 5.59% (yoy-1.47 PCT), which was mainly due to the reduction of advertising investment under the situation that the flower house technology was no longer consolidated and the epidemic situation. The gross profit margin of 2022q1 is 42.2% (yoy-20.9pct, 2020q1 high base), and the expense rate during the period is 137% (YoY + 115.4pct), which is mainly due to the loss of passenger flow and the adjustment of operating costs to management expenses during the closing period.
Equity transfer Zhuhai and Australia projects, light pack and optimize the rhythm of capital expenditure. The epidemic has brought uncertainty. Zhuhai performing arts resort has high investment amount, large project scale and strong construction cycle; Australian projects are still in the initial stage, and it is more difficult to promote overseas projects. The company enhances its sustainable operation and anti risk ability by transferring the equity of its subsidiaries, and promotes the platform development.
Profit forecast and investment rating: since 2022, the epidemic has continued to repeat. We have reduced the net profit attributable to the parent company from 910 / 1.49 billion yuan to 390 / 1.12 billion yuan in 20222023, and 1.53 billion yuan in 2024, with a year-on-year increase of 22.7% / 190.5% / 35.9% respectively from 20222024. The corresponding dynamic PE is 93 / 32 / 24 times, maintaining the "overweight" rating.
Risk tips: repeated epidemics, macroeconomic fluctuations, slow recovery of culture and tourism industry, and the landing of new projects is not as expected by the company.
