\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 888 China Tourism Group Duty Free Corporation Limited(601888) )
Event: China Tourism Group Duty Free Corporation Limited(601888) released the annual report of 2021 and the first quarterly report of 22 years. In Q1 of 21 and 22 years, the company achieved operating revenue of 67.676 billion yuan and 16.782 billion yuan respectively, with a year-on-year increase of + 28.67% and - 7.45% respectively; The net profit attributable to the parent company was 9.654 billion yuan and 2.563 billion yuan respectively, with a year-on-year increase of + 57.23% and - 9.99% respectively.
Tax exemption on outlying islands is still the core channel contributing to revenue and profit growth, and the airport channel is under pressure due to the impact of the epidemic. In 21 years, Hainan achieved a total sales volume of 60.17 billion yuan of duty-free shops on outlying islands, a year-on-year increase of + 84%, including 50.49 billion yuan of duty-free sales on outlying islands, a year-on-year increase of + 83%. The company cultivates outlying islands for tax exemption and fully enjoys channel dividends. In 21 years, Sanya City store and Haimian company achieved revenue of 35.51 billion yuan and 15.96 billion yuan respectively, with a year-on-year increase of + 66.6% and 61%, accounting for 76.1% of the total revenue and contributing about 51.4% of the net profit. The global epidemic situation was severe in 21 years. The Ministry of culture and tourism estimated that the number of inbound tourism and inbound and outbound passengers in the whole year only recovered to 22.1% and 16.3% in 19 years. The company's airport channel was under pressure. RISHANG Shanghai and RISHANG China achieved revenue of 12.49 billion yuan and 1.9 billion yuan respectively, up - 9% and - 40.5% year-on-year. Affected by the outbreak of the epidemic in China, the tax-free sales of Q1 outlying islands in Hainan reached 11.08 billion yuan, only + 6.6% year-on-year. From March 3 to 8, the company's Sanya International duty-free city was suspended. Due to the decline of tourist traffic under the influence of the epidemic, Q1 revenue was significantly under pressure of - 7.45% year-on-year. With the reduction of discounts and the improvement of gross profit margin, profits increased significantly under rent reduction and tax preference.
Affected by the intensification of market competition and the repeated epidemic, the company took the initiative to increase discounts, and the gross profit margin of the company in 21 years was -6.96 PCT year-on-year To 33.68%, with the significant reduction of tax-free discounts on outlying islands in Q1 in 22 years, the gross profit margin increased by 8pct month on month compared with Q4 in 21 years, Marginal improvement is obvious. In the future, when the epidemic disturbance weakens, the discount will return to the normal level. Considering that maintaining the limited competition pattern is the most benign development state of the industry, it is expected that the license will not be liberalized on a large scale in the future, and the company is in the leading position. Based on the principle of mutual benefit and win-win between operators and brands, the discount intensity and gross profit margin will be maintained at an appropriate level in the long run. The company signed a supplementary agreement with the capital airport, and the net profit increased by 1.14 billion yuan due to rent reduction; Six subsidiaries can enjoy the corporate income tax rate of 15%, resulting in an increase in net profit of 740 million yuan. The implementation of two major uncertainties has greatly improved the annual profit of 21 years, with a year-on-year increase of + 57.23%.
The short-term disturbance of the epidemic situation is still in progress, but the marginal improvement. In the medium and long term, the company pays attention to the entry-exit opening and the implementation of the city store policy. The company continues to strengthen its comprehensive strength and its leading position remains unchanged. Sanya duty-free city was suspended from April 2 to January 1. Considering that many places across the country are limited by the impact of epidemic control, the short-term epidemic disturbance is still ongoing, and the performance of the company in the first half of the year may continue to be under pressure. However, at present, Hainan Province has realized the dynamic clearing of social aspects, all stores of the company have resumed business, and the tax-free channels on outlying islands have been marginally improved. Airport channels pay attention to the huge recovery space brought by the recovery of entry-exit under the recovery of the global epidemic. Long term attention has been paid to the incremental market brought by the implementation of the policy of opening stores in the city to the Chinese people after the epidemic. As a leader in China's duty-free market, the company has actively promoted all-channel expansion in the past 21 years, continued to integrate online business, opened up a multi business digital system, and gradually went online. It has completed the overall planning of the warehousing system and the integrated supply chain scheme in Hainan, deepened brand cooperation and the development of new brands, continuously strengthened its advantages in brand cooperation, supply chain construction and national duty-free channel layout, and continuously enhanced its operation capacity, Lay a foundation for it to face more fierce competition in China and international duty-free market.
Profit forecast: the return of consumption and the expansion of middle and high-end income groups are the core driving forces to support the long-term growth of the tax-free industry. Under the improvement of the short-term epidemic, the marginal improvement of tax-free in outlying islands, the recovery of medium and long-term airport channels and the landing of local stores will bring huge incremental space. The company will consolidate its leading position by making efforts in brand cooperation, channel laying, operation management and financial support, and will fully enjoy the growth dividend of the industry. It is estimated that the company's net profit attributable to the parent company in 22-24 years will be 10.918, 15.74 and 18.65 billion yuan, and EPS will be 5.6, 8.1 and 9.6 yuan. The corresponding PE of 22-24 years is 32, 22 and 19 times, maintaining the "strongly recommended" rating.
Risk tip: the policy exceeded expectations, the epidemic situation in China repeated, and the tax-free competition on outlying islands intensified.
