\u3000\u3000 China Tourism Group Duty Free Corporation Limited(601888) (601888)
The company recently issued an announcement on the pre increase of annual performance in 2021. The company expects to realize a net profit attributable to the parent company of about 9.4 ~ 10.1 billion yuan in 2021, an increase of about 3.3 to 4 billion yuan over the same period in 2020, a year-on-year increase of about 54% to 66%. It was mainly affected by the epidemic disturbance in the second half of the year, and the performance forecast was slightly lower than the industry expectation.
Key points supporting rating
Tax exemption in Hainan is still hot, and Meilan Airport Tax shop has been put into operation. According to sunshine hainan.com, Hainan Province received 81.043 million tourists in 2021, yoy + 25.5%, returning to 97.5% in 19 years; The total tourism revenue was 138.434 billion yuan, yoy + 58.6%, an increase of 30.9% over 19 years. According to the statistics of Haikou customs, the duty-free sales of Hainan outlying islands in 2021 was 49.5 billion yuan, the number of shoppers reached 6.72 million, the total number of shopping pieces was 70.45 million, and the per capita consumption amount was 7368 yuan, an increase of 80%, 49.8%, 107% and 20.2% respectively over the same period last year. Meilan Airport Phase II was put into use in early December. The company’s airport duty-free stores were opened in the same period, with a total of 111 stores, including more than 500 international well-known brands. In the future, the company will continue to enrich duty-free categories, improve customer experience and open up duty-free consumption scenarios.
The tax-free policy is favorable again, and the company’s tax-free channels are perfect. On the last day of 2021, the “14th five year plan” for China’s trade development formulated by 22 departments including the Ministry of Commerce was officially released, which proposed to comply with the trend of consumption upgrading, promote the expansion and quality of the consumer market and accelerate the formation of the Chinese market; Improve the policy of duty-free shops in the city and build duty-free shops with Chinese characteristics. After the company acquired the Hong Kong China Travel assets company and supplemented the local tax-free license purchased back home, the tax-free channels were further improved. As a leading tax-free enterprise, it is expected to accelerate the development of tax-free businesses on outlying islands and in the city under the guidance of planning and consumption return.
Hainan tax preference will be implemented, and the company will benefit for a long time. The six Hainan subsidiaries of the company enjoy the preferential income tax rate of 15%. The preferential tax rate is up to December 31, 2024. Therefore, the company’s performance will continue to benefit from the tax preference for a long time, and the company’s performance is expected to be further thickened.
Valuation
Due to the great impact of the epidemic disturbance in the third and fourth quarters, the company’s performance is under pressure, but the peak tourism season in Hainan is coming, with the support of Hainan culture and tourism development policies, the medium and long-term growth value of the company is still there. Therefore, it is prudent to lower the company’s profit forecast. It is predicted that the company’s EPS in 21-23 years will be 5.00/6.83/8.96 yuan, and the corresponding P / E ratios will be 40.1/29.4/22.4 times respectively, maintaining the buy rating.
Main risks of rating
The opening of the country has diverted sales from outlying islands, intensified competition in the tax-free market, and the implementation of the policy is less than expected
