\u3000\u30 China Baoan Group Co.Ltd(000009) 78 Guilin Tourism Corporation Limited(000978) )
Core view
Event: the company issued 2021 performance announcement and 2022 Q1 performance announcement. In 2021, the company achieved a revenue of 239 million yuan, a year-on-year decrease of 6.39% (the main business revenue was 219 million yuan, a year-on-year increase of 0.62%); The net profit attributable to the parent company was -213 million yuan, and the loss narrowed by 20.18% year-on-year. Scenic spot tourism, Lijiang Waterfall Hotel, Lijiang cruise passenger transport, passenger service and other main businesses achieved revenue of 123 million yuan, 47 million yuan, 46 million yuan, 19 million yuan and 03 million yuan respectively, with a year-on-year increase of + 19.51%, + 20.53%, + 6.54%, - 8.11% and - 93.57% respectively. Affected by repeated epidemics in some regions, the number of tourists received in the first quarter of 2022 decreased by 45%, and the company achieved a revenue of 22 million yuan, a year-on-year decrease of 44.85%; The net profit attributable to the parent company was -71 million yuan, an increase of 30.37%.
Profitability is gradually restored, and there is still room for recovery compared with the cost before the epidemic. In 2021, the company realized a gross profit of -19 million yuan, and the loss narrowed by 36.48% year-on-year. The gross profit margins of scenic spot tourism, Lijiang Waterfall Hotel and Lijiang cruise passenger transport were 10.52%, 1.33% and - 35.94% respectively, with a year-on-year increase of + 11.7pct, + 2.2pct and - 11.72pct respectively. In order to obtain more market share, the commission paid to travel agencies by Cruise passenger transport business increased significantly. In 2021, the rates of sales, management and financial expenses were 7.82%, 46.15% and 21.65%, which were basically flat and increased slightly year-on-year. The increase in sales expenses was due to the strengthening of advertising and promotion, which still has a large recovery space compared with 3.02%, 25.89% and 8.35% in 2019 before the epidemic.
Integrating Guilin's core tourism resources, there is a large space for the recovery of post epidemic repair performance. In the short term, the restoration of the scenic spot is still affected by the epidemic. The company's passenger flow recovered rapidly in the first half of 2021, but the repeated epidemic in the second half of 2021 led to a year-on-year decline in passenger flow. In the first half of 2022, the epidemic situation in some areas still has a repeated trend, and the tourism industry is expected to pick up in the second half of the year. In the medium and long term, the company has the right to operate the core tourism resources in Guilin, and cooperates with the controlling shareholder Guilin Tourism Corporation Limited(000978) development group to build Qixing and Xiangshan scenic spots. It also has high-quality projects such as Lijiang river waterfall Hotel, and a vivid lotus performance project is under construction. Its core products have the advantages of resource monopoly and integration, and is optimistic about its performance in the post epidemic repair period.
Profit forecast and investment suggestion: at present, China is still in the stage of repeated epidemic, causing upward pressure on the recovery of passenger flow in scenic spots. However, in the long run, Guilin Tourism Corporation Limited(000978) has both favorable policies and high-quality tourism resources, and the resilience of post epidemic recovery is sufficient. It is estimated that the net profit of the company from 2022 to 2024 will be -156/0.15/0.35 billion yuan respectively, and the PE valuation in 2023 / 2024 will be 130.7x/55.5x respectively, which is rated as "overweight".
Risk warning: repeated outbreaks in China; Weak demand after the epidemic; The progress of projects under construction was less than expected.
