\u3000\u3 Shengda Resources Co.Ltd(000603) 885 Juneyao Airlines Co.Ltd(603885) )
Performance
On April 28, Juneyao Airlines Co.Ltd(603885) released the first quarter report of 2022. In 2022q1, the company achieved a revenue of 2.486 billion yuan, a year-on-year increase of 1.2%; The year-on-year net loss was RMB 6.7 billion to RMB 4.4 billion; The net profit deducted from non return to parent was -554 million yuan, with a year-on-year increase of 312 million yuan.
Analysis
The epidemic situation in China has been repeated and the turnover has decreased significantly. The epidemic situation in China has been repeated. In March, the company’s main base in Shanghai was seriously affected by the epidemic, the number of flights decreased significantly, and the demand performance was weak. In terms of turnover, ask of Q1 company decreased by 12% year-on-year and 21% compared with 2019; In terms of supply and demand, the occupancy rate was 66%, a year-on-year decrease of 7pct and 19pct compared with 2019. Affected by the collection of fuel surcharge, the ticket price level increased year-on-year. The RPK revenue of 2022q1 unit was 0.48 yuan, up 28% year-on-year and 98% in 2019; The unit ask revenue was 0.32 yuan, up 15% year-on-year and 77% in 2019.
High oil prices, rigid costs and declining profitability. Q1 oil prices continued to rise. The average ex factory price of China’s aviation oil was 5462 yuan / ton, up 55% year-on-year. At the same time, the company’s fleet turnover is limited, resulting in high unit fixed costs. With high oil price and low turnover, the unit ask operating cost of 2022q1 company increased by 25% to 0.38 yuan. The cost per seat kilometer increased more than the cost per seat. In 2022q1, the gross profit margin of the company decreased by 9.54pct to – 21.38% year-on-year. In terms of cost rate, the total cost rate of sales, management and R & D was 9.59%, with a year-on-year increase of 0.35%. Q1 other income was 210 million yuan, a year-on-year increase of 7.7%. Under the continuous impact of the epidemic, 2022q1 company recorded a net loss of 544 million yuan, higher than our previous assumptions.
Short term performance may still be under pressure. In April, the civil aviation industry was still significantly affected by the epidemic, the aircraft utilization rate was low, and the ex factory price of China’s aviation oil increased by 84% year-on-year to 7499 yuan / ton in April. It is expected that the company’s performance in Q2 traditional off-season will still be under pressure. Recently, the number of newly diagnosed and asymptomatic covid-19 infections showed a downward trend, and the aviation industry can recover. It is expected that after the impact of this round of epidemic is eliminated, the company is expected to return to profitability, and Juneyao Airlines Co.Ltd(603885) achieve good performance during the peak summer transportation season.
Investment advice
Considering the impact of the 2022q1 epidemic and the rise of oil prices beyond previous assumptions, the company lowered its net profit forecast for 2022 to – 300 million yuan (original 117 million yuan), and maintained the net profit forecast for 202324 of 1.17 billion yuan and 1.73 billion yuan. Maintain the “buy” rating.
Risk tips
The impact of the epidemic exceeds the expected risk, exchange rate fluctuation risk, oil price rise risk, additional dilution risk and safety accident risk.
