\u3000\u3000 China Tourism Group Duty Free Corporation Limited(601888) (601888)
Key investment points
Event: the company released the performance express for 2021. In 2021, it is expected to achieve an operating revenue of 67.669 billion yuan, a year-on-year increase of 28.65%, and the net profit attributable to the parent company is 9.592 billion yuan, a year-on-year increase of 56.23%. The operating income of Q4 in 21 years was 18.17 billion yuan, with a year-on-year increase of 4.07%, and the net profit attributable to the parent company was 1.101 billion yuan, with a year-on-year decrease of 63.00%.
Q4 net profit attributable to parent company is slightly lower than market expectation. In the first three quarters of the year, while the company’s operation was improving, it continued to be favored (some subsidiaries in Hainan enjoyed a preferential corporate income tax rate of 15% and the rent concession of capital airport), which improved the market’s expectation of the company’s annual performance in the next 21 years. The company’s annual net profit attributable to the parent company was 9.592 billion yuan and Q4 net profit attributable to the parent company was 1.101 billion yuan, slightly lower than the previous market expectation.
The performance is slightly lower than expected, which may not come from the decline of gross profit margin. Different from the previous concerns of the market, we speculate that Q4 performance is slightly lower than expected, which is likely to come from the superposition of multiple factors: 1) cost side. When the two items of sales expenses + management expenses are added together, 21q1 / Q2 / Q3 are 2.2 billion / 2 billion / – 800 million respectively. Q4 due to the opening of Hainan new channel and year-end bonus, we estimate that the two expenses may exceed 3 billion. 2) Asset impairment. Affected by the epidemic, the company had withdrawn 909 million yuan of inventory falling price reserves in 2020, and the inventory was still high at the end of 21 years, so the possibility of withdrawing falling price reserves cannot be ruled out. 3) The Q4 performance of the Japanese department may be lower than expected. Judging from the gap between the total profit of Q4 and the net profit attributable to the parent company, the performance of Q4 in Japan may be lower than expected, mainly due to online channels or diversion from Hainan. 4) Member points unrecognized income. According to the operating income of Q4, or there are still more unrecognized income of member points.
The epidemic has impacted the performance in 21 years, and the long-term logic is still good. 1) Space: the scale of duty-free in Hainan has impacted 100 billion in 22 years, and the policy of duty-free shops in Chinese cities is expected to become stronger and stronger. 2) Competition in Hainan: China free occupies an absolute advantage in terms of new channels, procurement scale and membership base in the future. The balance of the 22-year competition game may tilt to China free, and the expected gross profit margin of China free is expected to improve quarter by quarter. 3) Operation: new high-end brands continue to move in, and there is still room for improvement in store entry rate and customer unit price. In the new year, the company will strengthen fine management and is expected to reduce costs, increase efficiency and increase performance.
Investment suggestion: we believe that the company’s long-term logic will not change due to the epidemic, but considering that the company’s performance is greatly affected by the epidemic, the company’s profit forecast is lowered. It is estimated that the company’s net profit attributable to the parent company from 2021 to 2023 will be 9.6/12.5 billion yuan (previously 114 / 158 / 20.2 billion yuan), and the adjusted performance growth rate will be 56.2% / 25.3% / 37.4%, maintaining the “buy” rating.
Risk warning events: the scattered epidemic affects the passenger flow of outlying islands; Permeability improvement is less than expected; The profitability of online business is uncertain.
