\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 706 Xi’An Qujiang Cultural Tourism Co.Ltd(600706) )
Event: the company issued the 2021 performance announcement. Under the background of repeated epidemics, the company’s performance still recovered beyond the pre epidemic level. In 2021, the company achieved a revenue of 1.365 billion yuan, a year-on-year increase of 26.80%; The net profit attributable to the parent company was 07 million yuan, turning losses into profits, with a year-on-year increase of 79 million yuan. The operation of scenic spots, hotel catering, travel agencies, tourism commodity sales, landscaping and sports business achieved revenue of 987 million yuan, 253 million yuan, 43 million yuan, 16 million yuan, 55 million yuan and 09 million yuan respectively. Despite the repeated Q4 epidemic and strict local control, thanks to the significant increase in management fee income in this period, the company’s annual revenue still recovered to a high level, an increase of 15.28% compared with 2019 before the epidemic.
The profitability was significantly improved and the expense rate was flat year-on-year: in 2021, the company achieved a gross profit of 330 million yuan, an increase of 39.91%; The gross profit margin was 24.16%, a year-on-year increase of + 2pct. The gross profit margins of scenic spot operation and hotel catering businesses were 33.84% and – 10.99% respectively, with a year-on-year increase of + 5pct and – 12pct respectively. As the fanglinyuan project was put into operation and converted into fixed assets, the depreciation and amortization expenses increased, and the gross profit of hotel service business turned negative. In 2021, the rates of sales, management and financial expenses were 5.10%, 14.21% and 4.52%, basically unchanged year-on-year.
The fanglinyuan project is put into operation, and the fund-raising activities are expected to improve the product level: the upgrading and reconstruction project of fanglinyuan hotel was put into trial operation in August 21. The hotel is positioned as a high-end hotel, which will improve the profit space of the company after it is put into operation. The company raised 229 million yuan by issuing non-public shares to replace the self raised funds invested in the light and shadow show of Datang Furong garden, the golden version of dream back to Datang and the upgrading and reconstruction project of royal banquet palace in advance. After the project is completed and put into operation, it is expected to continuously improve the growth momentum of the company.
Acquisition activities drive business expansion and diversified development and realize industrial integration: the company acquires 100% equity of Chinatown company and 55% equity of Wuxi huipao respectively. The former will expand the business scope of the company to Datang never night city pedestrian street and drive the coordinated development of scenic spots, catering, scenic spots and other businesses. The latter is expected to help the diversified combination of cultural and tourism business and sports of the company and realize integrated development.
Digital collections open the company’s digital economy sector, and the company’s issuance activities have been relatively active since this year: since the company’s scenic spot Xi’an city wall issued digital collections on Alibaba auction platform in November last year, the company’s business in digital collections has developed rapidly. At present, the digital collection platform cooperated by the company has been expanded to Alibaba auction, Qinchu and other platforms, The company’s Xi’an city wall announced on April 29 that it would cooperate with Tencent cloud to carry out the “Chang’an in” cultural tourism digital platform project to further develop the digital collection business.
The overall sales speed of the company’s digital collection is fast. The dragon head series sold in February Xi’An Qujiang Cultural Tourism Co.Ltd(600706) is completed in 2-5 seconds, and the digital collection officially issued by Daming Palace is also “empty in seconds”. At the same time, Daming Palace launched the play method of “purchasing a collection of digital collections to obtain lifelong free scenic spots”, which helped the company use digital collection technology to empower the physical scenic spot industry.
Investment suggestion: it is estimated that the net profit of the company from 2022 to 2024 will be RMB 0.16/0.80/0.90 billion respectively, and the PE valuation will be 156.2x/32.2x/28.6x respectively, which is rated as “overweight”.
Risk warning: repeated outbreaks in China; Weak consumption after the epidemic; The progress of projects under construction is less than expected; Digital collection supervision risk.
