Key investment points
The revenue of tax exemption and hotel sectors recovered well, and the sub sectors with optimized supply and demand structure in the medium term achieved excess returns
China’s passenger flow recovered from twists and turns in the past 21 years, and most of them focused on tracking the year-on-year growth of the company’s revenue. In Q1 of 22 years, with the closure and control of the epidemic in many places, the revenue and profit of listed companies fell sharply. Focus on tracking the revenue performance of Listed Companies in 2021 and 22q1, and the performance of some companies assisted by cost control exceeded expectations. From a horizontal comparison, the 21-year income recovery rate is tax-free, hotel, scenic spot, performing arts, airport, aviation and outbound tourism from high to low. On the profit side, the tax-free, hotel and performing arts sectors made profits, and other sub industries were in a loss state as a whole. In Q1 22, due to the closure and control of the epidemic in many places, the operation of various sub industries was under pressure, and the asset liability ratio increased. Under the background of normalization of the epidemic, the company pays more attention to cost reduction and efficiency increase, and the effect of cost control in 2021 is reflected in many sectors. The hotel and aviation sector has achieved positive returns since the beginning of 21 years (April 30, 22). Although the profits have not yet recovered, the optimization of medium-term supply and demand pattern has promoted the continuous improvement of sector valuation.
Aviation: fleet expansion slows down and unit revenue increases
The revenue recovery rates of Listed Companies in 2021 and 22q1 are 58% and 46% respectively; The total losses were 36.8 billion and 26.2 billion respectively. Since the outbreak of the epidemic, the aircraft fleet introduction plan of each aviation company has been more cautious. In 2021, the total fleet size of Air China, China Southern Airlines, China Eastern Airlines, Chunqiu and Jixiang increased by only 3.9% year-on-year in 2021. It is relatively certain that the supply growth rate of 2-3 industries will slow down in the future. In the 21st year, the unit income of airlines increased, and the rrtk and rrpk of many airlines exceeded the level in 2019. However, affected by the high oil price, the operating cost has risen, resulting in increased losses in the industry. The proportion of aviation fuel cost has increased. Ask, a relatively good control unit of listed aviation companies, has a leading ability of Spring Airlines Co.Ltd(601021) cost control.
Airport: the entry-exit tax-free business is blocked, and a variety of non aviation income is made
The revenue recovery rates of Listed Companies in 2021 and 22q1 are 55% and 49% respectively; The total losses were 2 billion and 900 million respectively. The number of take-off and landing sorties and passenger throughput fluctuated with the epidemic. The Guangzhou Baiyun International Airport Company Limited(600004) passenger throughput was the largest in 2021. Haikou airport benefited from the tax exemption policy of Hainan outlying islands, so it recovered well. International routes with higher rates have not been restored, and the decline of aviation sortie related revenue and passenger related revenue in 21 years is greater than that of sortie and throughput. When the entry-exit tax exemption is blocked, Shenzhen Airport Co.Ltd(000089) fali has a variety of non aviation income such as tax commerce, aviation logistics, aviation advertising and so on.
Hotels: leading enterprises accelerate the expansion of stores, and ADR drives the repair of business data
The revenue recovery rates of Listed Companies in 2021 and 22q1 are 76% and 70% respectively, and the total profits are 300 million and – 400 million respectively. The number of newly opened hotels in Jinjiang / Huazhu / BTS in 2021 is 1763, 1540 and 1418 respectively. In 2021, the income of Huazhu exceeded the level of 2019, the profit side Huazhu reduced losses, and Jinjiang, ShouLv and Junting made profits. Benefiting from the continuous increase in the proportion of medium and high-end, the recovery elasticity of ADR is stronger than that of OCC. In 2021, the RevPAR of Jinjiang, Huazhu and the first brigade will recover to 87%, 87% and 75% respectively in 2019, and the ADR will recover to 101%, 102% and 96% respectively in 2019.
Tax exemption: the profit margin of China tax exemption 22q1 has improved month on month, and it needs benefits from high-quality development
Benefiting from the tax-free bonus of Hainan outlying islands, 2021 and 22q1 China Tourism Group Duty Free Corporation Limited(601888) income are + 29% and – 7% respectively; Net profit attributable to parent company is + 57% and – 10% respectively. The decline in the performance of 22q1 China free revenue was mainly due to 1) the sharp decline in the number of passengers at Sanya and Haikou airports by 73% and 46% respectively in March. 2) In March, Sanya duty-free city closed for 4.5 days The net interest rates of China Tourism Group Duty Free Corporation Limited(601888) 21q4 and 22q1 were 6.6% and 17.4% respectively, which improved significantly month on month. In December 2021, Meilan Airport Phase II duty-free store opened. In 2022, Sanya Phoenix Airport duty-free store expanded and Haikou international duty-free city opened. China tax exemption will continue to usher in a large number of new stores in Hainan in 22-24 years, and the subsequent high growth is expected.
Performing Arts: increase revenue and reduce expenditure, waiting for profit restoration
Indoor performing arts are under more control. The revenue of Songcheng Performance Development Co.Ltd(300144) 2021 is 1.185 billion yuan, accounting for 45% of the revenue in 2019; The net profit attributable to the parent company was 315 million yuan, turning losses into profits; In 2012, Q1 realized an income of 85.304 million yuan, a year-on-year decrease of 72%, and the net loss attributable to the parent company was 38.586 million yuan, a year-on-year decrease of 129.15%. The company announced the transfer of projects in Australia and Zhuhai, and is expected to receive cash flow of nearly 1 billion yuan. The group is responsible for project development to alleviate the company’s cash flow pressure. In addition, the company makes full use of its leading product creation ability and scientific and technological ability in the performing arts industry, makes efforts to light asset output, widens the scope of asset light projects, and expands the source of income in a more “light” mode.
Investment suggestion: at present, the industry fundamentals have bottomed out, and the recovery of travel demand has brought strong industry benefits β
Aviation: the introduction of airlines’ fleet is slowing down, and the supply slowdown is the most clear. During the epidemic period, ticket discounts are large, and the travel demand is restored. Ticket prices are expected to release greater flexibility. Recommendations: Air China Limited(601111) , China Southern Airlines Company Limited(600029) , Spring Airlines Co.Ltd(601021) , Juneyao Airlines Co.Ltd(603885) , China Eastern Airlines.
Airport: tax business, aviation logistics and other non aviation businesses will be promoted. If international passengers resume the airport flow value in the future, the tax exemption agreement is expected to be renegotiated, and the sector companies are expected to usher in the dual catalysis of tax exemption and tax. Recommended targets: Guangzhou Baiyun International Airport Company Limited(600004) , Shanghai International Airport Co.Ltd(600009) ;
Hotel: since 2015, the industry has gradually entered the era of stock development, and the epidemic has accelerated the liquidation of single hotels. In 2020, the number of new “Hotel” related enterprises registered decreased for the first time in nearly a decade during the epidemic. The number of registered enterprises in 2020 was 364000, a decrease of 17.4% compared with 2019, and the net increase of “Hotel” related enterprises decreased by 24% year-on-year. Leading hotels accelerate the expansion of stores, continuously improve the market share, and strictly control the fees + increase the franchise rate, which is expected to lead to better performance than expected. Recommended targets: Shanghai Jin Jiang International Hotels Co.Ltd(600754) , Btg Hotels (Group) Co.Ltd(600258) , Zhejiang Ssaw Boutique Hotels Co.Ltd(301073) .
Scenic spots: when the epidemic situation improves, the demand for vacation travel will recover rapidly. During the epidemic period, high-quality scenic spot companies pay attention to product upgrading and transformation, improve human efficiency and reduce personnel costs through flexible employment and personnel exchange. It is expected that the recovery of travel will bring double improvements in income and profit margin. Recommended target: Songcheng Performance Development Co.Ltd(300144) .
Tax exemption: Hainan outlying islands will achieve a tax-free sales target of 60 billion in 2021, and the Hainan government will put forward a tax-free sales target of 100 billion in 2022. In December 2021, Meilan Airport Phase II duty-free store opened. In 2022, Sanya Phoenix Airport duty-free store expanded and Haikou international duty-free city opened. China tax exemption will continue to usher in a large number of new stores in Hainan in 22-24 years, and the market share is expected to continue to increase. Since 22 years ago, the company has paid more attention to the assessment of profit margin, and the subsequent profit margin is expected to continue to improve. Recommended target: China Tourism Group Duty Free Corporation Limited(601888) .
Risk tips: the recovery of epidemic situation is less than expected, the supply clearance is less than expected, natural disasters, etc
