\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 888 China Tourism Group Duty Free Corporation Limited(601888) )
Performance overview: in 2021, the company achieved a revenue of 67.676 billion yuan / + 28.67%, and a net profit attributable to the parent company of 9.654 billion yuan / + 57.23%; In 2022q1, the company achieved a revenue of 16.783 billion yuan / - 7.45% and a net profit attributable to the parent company of 2.563 billion yuan / - 9.99%. The company was less affected by the epidemic from January to February. In the same period, the company achieved a revenue of 13.1 billion yuan / + about 20% and a net profit attributable to the parent company of 2.4 billion yuan / + about 20%. Under the epidemic in March, the company's operation was significantly under pressure, with a revenue of 3.683 billion yuan / - about 49% and a net profit attributable to the parent company of 163 million yuan / - about 9.99%.
Revenue: in 2021, the tax-free business of outlying islands maintained rapid growth, and the scale of daily direct mail was stable. In 2021, the company achieved revenue of 42.936 billion yuan / + 32.67% and 24.006 billion yuan / + 21.81% respectively from the sales of tax-free and taxable goods, of which the proportion of taxable business income decreased by about 2pcts to 35.9% year-on-year. Among them, Sanya store achieved a revenue of 35.509 billion yuan / + 66.58%, a net profit attributable to the parent company of 4.168 billion yuan / + 40.46%, a revenue of 15.962 billion yuan / + 61.05%, a net profit attributable to the parent company of 793 million yuan / + 20.75%, an overall revenue of 47.096 billion yuan / + 57.19% in Hainan, and a year-on-year decrease in gross profit margin of 4.79pcts to 23.57%. On the last day, Shanghai achieved a revenue of 12.491 billion yuan / - 9.02%. It is worth noting that in the second half of 2021, the epidemic situation was more repeated than expected, the price competition in Korean purchasing agency, other tax channels and other channels intensified, and the online competition pressure increased, resulting in a particularly obvious decline in the net interest rate of direct mail business in Shanghai. On 2021h2, the net interest rate of parent owned in Shanghai decreased by about 7pcts to 2.27% month on month, and the net profit of parent owned in the whole year decreased by 44.66% to 690 million yuan year on year.
Profitability: the increased promotion in 2021h2 led to a decline in profitability, and the actual operating profit margin in 2022q1 improved significantly month on month. The profitability of 2021h1 company is good. The repeated pressure of 2021h2 epidemic has affected the quality of profitability, and the profitability of 2022m1-m2 has rebounded significantly. However, the epidemic repeated again in March, which has dragged down the performance of 2022q1 to a certain extent. In terms of gross profit margin, the overall gross profit margin of the company from 2021q1 to 2022q1 was 39.11% / 37.52% / 31.27% / 26.44% / 34.00% respectively. The significant decline in the gross profit margin of 2021h2 was mainly due to the large impact of the epidemic in Nanjing in 2021q3, and the universal discount of tax-free channels for outlying islands was increased to about 70% in the second half of the year, resulting in a difference of about 13 PCTs between the overall gross profit margin at the end of 2021 and the beginning of the period. The local Chinese New Year is not enforced in 2022m1-m2, which overlaps the peak tourist season in Hainan, The company's terminal universal discount narrowed to about 85%, and the gross profit margin rose sharply by about 8pcts in 2022q1; In terms of operating profit margin, excluding the impact of 2021q3 capital airport rent reversal and income tax return, it is estimated that the actual operating profit margin of 2021q1-2022q1 is 16% / 14% / 9% / 6% / 14% respectively, of which the operating profit margin of 2022m1-m2 has rebounded to 17%, but due to the repeated epidemic, the profit margin fell to 4% in March, which dragged down the overall performance of 2022q1.
Core view: 1) under the expectation that the epidemic situation in China will stabilize, the company's valuation will improve with the recovery of passenger flow in Hainan in the short term. According to the operation data of Haikou Meilan International Airport, the passenger throughput of Meilan Airport in March 2022 was 978100 person times, a year-on-year decrease of 52.72% and a month on month decrease of 44.41%. The passenger throughput of Meilan Airport in Q1 2022 was 4456700 person times, a year-on-year decrease of 5.93% and a recovery to 61.89% in the same period in 2019. At present, the situation of epidemic prevention and control is still grim. According to the official microblog data of Haikou Meilan Airport, the average daily passenger throughput of Meilan Airport decreased by 79% year-on-year from April 1 to April 20, 2022. Referring to the situation of last year, the number of overnight tourists in Hainan increased by 5% year-on-year in the stable period of China's epidemic from April to may 2021, which shows that the passenger flow in Hainan recovered well in the stable period of China's epidemic, Therefore, we expect that the passenger flow growth of Haikou airport will continue to decline in April, and the suppressed consumer demand may lag until the release in the middle and late second quarter. At that time, the passenger flow in Hainan will have strong recovery potential, which will directly drive the growth of duty-free sales in Hainan outlying Islands, and the universal discount may narrow after the passenger flow recovers, which is expected to support the company's operating profit margin to stabilize at the level of 15% +, At the same time, by virtue of its scale advantage, China free has a friendly relationship with upstream brands, which can ensure sufficient supply in time after the passenger flow recovers, and the advantage of the supply side is expected to support its market share to remain at a high level; 2) The certainty of the company's medium and long-term performance increment is supported by the advantages of channel and scale. On the one hand, after the gradual liberalization of outbound tourism, China's duty-free market will face diversified competition. However, the company can effectively link the 40 million person time Hainan passenger flow market and 155 million person time outbound passenger flow market by virtue of its comprehensive channel advantages in Hainan, airport, city and online, superimposing its internal membership system. The market space is broader and the opportunities outweigh the challenges. From the perspective of policy, considering the serious problem of consumption outflow in China before the epidemic and the current recovery of tax-free market in South Korea, we expect that it will still be the core work of the government to continue to guide the return of consumption after the recovery of outbound tourism. After the recovery of outbound tourism, the departure policy for Chinese people is expected to be strengthened. From the perspective of the company, the company currently has 20 million members. In the future, relying on the advantages of Hainan + Airport + all-round channels in the city, Hainan and outbound members, mainland and Hong Kong and Macao members, offline and online member systems are expected to interact. After the connection of all-channel traffic, the strong member stickiness will become another competitive advantage of the company and enhance its comprehensive strength to participate in international competition. On the other hand, there is not much correlation between the passenger flow in Hainan and the outbound tourist flow. Although the groups in their respective target markets overlap, there is no relationship between growth and decline. Since the epidemic, China's high-end consumer groups have been basically intercepted in China's high-end tax channels (there are 10 shopping centers with sales of more than 20% in the top 50 of the 2020 national shopping center sales list, of which 9 are luxury shopping centers), The tax-free customers in Hainan outlying islands are price sensitive, and the company can continue to maintain the price advantage in the terminal market by virtue of its scale advantage. Therefore, we believe that after the opening of outbound tourism, the potential customers in the middle and high-end of the traditional commercial formats in the sinking market may contribute a large increment to the company's business in Hainan market.
Profit forecast and investment suggestions: channel slot and scale effect are the two cores of the medium and long-term development of tax-free enterprises. The company has an omni-channel tax-free layout, with large performance flexibility, and maintains the "recommended" rating of the company. Considering the repeated impact of the epidemic on passenger flow performance, we lowered the operating revenue from 2022 to 2024 to 81.9 billion yuan / 114.6 billion yuan / 149 billion yuan respectively (with a year-on-year growth rate of + 21% / + 40% / + 30%), the net profit attributable to the parent company to 11.4 billion yuan / 15.4 billion yuan / 19.4 billion yuan respectively (with a year-on-year growth rate of + 18% / + 35% / + 26%), and EPS to 5.84 yuan / 7.87 yuan / 9.93 yuan respectively. The current market value corresponding to PE is 31x / 23x / 18x respectively. We give the company 30-35xpe in 2023, The corresponding target price is 236.10-275.45 yuan, maintaining the company's "recommended" rating.
Risk warning: repeated epidemic risk; The tax exemption policy is less than expected; The number of tax-free licenses issued exceeded expectations; The development of online direct mail is blocked; Airport bidding rent risk.
