\u3000\u30 Shenzhen Fountain Corporation(000005) 24 Guangzhou Lingnan Group Holdings Company Limited(000524) )
The company announced the first quarterly report of 2022, and 22q1 company achieved a revenue of 188 million yuan, yoy-35.01%; The net profit attributable to the parent company was -75.39 million yuan, yoy-35.74%; The net profit deducted from non parent company is -77.62 million yuan, yoy-27.29%; During the period, the company’s basic earnings per share was -0.36-113.yoy yuan. In the first quarter, the epidemic in China disturbed the recovery rhythm of business travel. The short-term pressure on the company’s business performance in the first quarter was obvious, and the revenue level in the same period only reached 10.31% in 19 years. However, the company’s financial performance is still relatively stable under the pressure of the epidemic. The R & D investment of the company’s guangzhilv continues to increase, and it is expected to recover rapidly after the epidemic is controlled.
Key points supporting rating
The epidemic situation is disturbed and the business pressure is obvious. During the reporting period, affected by the epidemic situation in China and the circuit breaker mechanism of inter provincial travel, the income of business travel and accommodation decreased year-on-year. The company achieved a revenue of 188 million yuan, yoy-35.01%; The net profit attributable to the parent company was -75.39 million yuan, yoy-35.74%; The net profit deducted from non parent company was -77.62 million yuan, yoy-27.29%. But at the same time, due to the decrease of business income, costs and sales expenses also decreased, with a year-on-year decrease of 30.46% and 32.36% respectively. The company’s revenue in the first quarter was only 10.31% of the same period in 19 years, but according to the historical data of 17-19 years before the epidemic, the first quarter was the off-season of the company’s revenue, accounting for about 22% – 23% of the annual revenue. If the national epidemic can be quickly and effectively controlled, the overall recovery rhythm of the company throughout the year can still be maintained.
The epidemic situation in Guangdong is initially stable, and the recovery of domestic income is expected. Since the outbreak of covid-19, the state has shut down the outbound tourism business, and the proportion of the company’s business income in Hong Kong, Macao, Taiwan and overseas areas has decreased from 60.49% in 19 to 1.21% in 2021. At the same time, due to the disturbance of the epidemic and the impact of inter provincial tourism, the travel radius of Chinese tourists has been reduced and the proportion of peripheral tourism has increased. The income proportion of the company in Guangdong Province has increased from 21.95% in 19 years to 67.88% in 21 years. However, the overall epidemic prevention and control pressure in Guangdong was great in the first quarter. In early February, the Health Commission required to quickly cut off the transmission chain, which had a certain impact on the company’s business. However, in April, the National Health Commission said that the epidemic situation in Guangdong and other places was generally controllable. It was expected that after the epidemic prevention achieved further results, the control measures were expected to be relaxed, so that the company’s business could recover quickly and undertake more business tourists from Guangdong and other provinces.
The overall financial situation is stable, and the investment in research and development is increased. Although the disturbance of the epidemic has caused some obstacles to the company’s revenue, the company’s current asset liability ratio is 26.70%, which is lower than the asset liability ratio of 30.77% in Q1 in 21 years. At the same time, the net CFO remains stable year-on-year, yoy-2.8%, and the overall financial structure remains stable. The company also provides financial assistance to its four subsidiaries to help the whole overcome difficulties. During the reporting period, the company increased R & D investment in guangzhilv, and it is expected that the investment in science and technology can enable business development in the future.
Valuation
According to the company’s first quarterly report of 22 years, the EPS of 22-24 years is adjusted to 0.31/0.55/0.69 yuan. The corresponding P / E ratio is 29.0 / 16.2 / 13.0 times. The disturbance of the epidemic in the first quarter put pressure on the company’s business development, and the inter provincial tour continued. However, the company’s overall financial stability, Guangdong epidemic prevention and control initially improved, the company promoted the development of science and technology enabled business, and its performance is expected to recover rapidly after the epidemic improved, so it maintained the overweight rating.
Main risks of rating
China’s epidemic prevention and control policy continues to face risks, overseas travel recovery is less than expected risks, and market competition risks
