\u3000\u3000 China Tourism Group Duty Free Corporation Limited(601888) (601888)
Event:
The company issued the 2021 performance express. In 2021, the company achieved an operating revenue of 67.67 billion yuan, a year-on-year increase of 28.7%, an operating profit of 14.74 billion yuan, a year-on-year increase of 52.0%, and a net profit attributable to the parent company of 9.59 billion yuan, a year-on-year increase of 56.2%.
Comments:
Revenue side: in 2021, the company achieved an operating revenue of 67.67 billion yuan, a year-on-year increase of 28.7%. In 2021, especially in the second half of 2021, under the adverse situation of continuous and repeated covid-19 pneumonia epidemic, the company closely focused on the main business of tax exemption, paid close attention to key markets and major projects, adhered to innovation to lead development, strengthened the improvement of core business capabilities, continuously enhanced the driving force of endogenous and external development, and better completed various tasks.
Profit side: in 2021, the company realized a net profit attributable to the parent company of 9.59 billion yuan, with a year-on-year increase of 56.2%, and the net interest rate attributable to the parent company was 14.2%, with a year-on-year increase of 2.5pct. On a quarterly basis, the net profit attributable to the parent company in 2021q1 / Q2 / Q3 / Q4 was RMB 28.5/25.1/31.3/1.1 billion respectively, with a year-on-year change of + 13129.5% / + 163.6% / + 40.2% / – 63.0% respectively, and the net profit attributable to the parent company was 15.7% / 14.4% / 22.4% / 6.1% respectively. In the follow-up, we believe that the discount in Hainan is expected to be reduced and the profit margin is expected to be significantly improved.
The recovery of inbound and outbound tourism is expected to increase, the level of departure tax rebate is expected to increase, and the tax exemption policy in the city is expected to increase. On January 20, the State Council issued the “14th five year plan” for tourism development. We believe that with the gradual and orderly liberalization of inbound and outbound tourism, the company’s airport business will be further restored, driving the steady increase of gross profit margin. The tax-free business in the city is also expected to continue to be promoted, and the profit margin level is expected to be continuously improved.
We expect that the company’s 22-year assessment index is expected to extend to the profit side and the supplier relationship will continue to deepen. In the past 21 years, the company has continued to expand, improve market share, and then improve the discourse power of supply chain negotiation. There is still broad room for improvement in store entry rate and customer unit price. On the other hand, over the past year, the relationship between the company and suppliers has been further deepened, and the negotiation influence with upstream suppliers has gradually increased after the scale has increased. Considering the mitigation of the impact of the epidemic and the recovery of airport business in the future, the company will also actively coordinate online business and continuously improve supply chain management, and the profit level is expected to increase significantly.
Investment suggestion: at present, the impact of the epidemic on tax exemption in Hainan is gradually alleviated. The assessment indicators are expected to extend to the profit side in 2022. Looking forward to 2022, the profitability of the company is expected to be significantly and continuously improved. At the same time, the duty-free market in Hainan continues to expand. The new seaport plans to open within the year, with rich categories and improved services. It is expected to effectively boost the number of people entering the store, conversion rate and customer unit price. In the future, the company will further consolidate its leading position in the global duty-free market, and its advantages in supply chain and location are expected to be further highlighted. Due to the impact of epidemic factors, we adjusted the company’s performance in 21 / 22 / 23 to 9.59/115/13.5 billion yuan (the previous value was 10 / 12 / 16.1 billion yuan), and the corresponding PE of the current stock price was 41 / 34x / 29x respectively, maintaining the “buy” rating.
Risk warning: the risk of repeated epidemic, the company’s operation is not as expected, the recovery of inbound and outbound tourism is not as expected, and the performance express is the preliminary calculation result. The specific financial data shall be subject to the company’s disclosure announcement
