\u3000\u3000 Songcheng Performance Development Co.Ltd(300144) (300144)
Event: Songcheng Performance Development Co.Ltd(300144) released the performance forecast for 2021. In 2021, it is expected to realize the net profit attributable to the parent company of 258-358 million yuan, reversing the loss year-on-year (the same period in 2020 was - 1.752 billion yuan); Deduct the net profit not attributable to the parent company of 208-308 million yuan, reversing the loss year-on-year (the same period in 2020 was -1.768 billion yuan). Excluding the impairment factors of flower houses in 2020, the net profit attributable to parent and net profit deducted from non parent in 2021 increased by 126.32% - 214.04% and 112.24% - 214.29% respectively year-on-year. The net profit attributable to the parent company in 2021q4 is expected to lose 75-175 million yuan, which has changed from positive to negative month on month, with a year-on-year loss reduction (the same period in 2020 is - 1.89 billion yuan); Deduct the loss of non parent net profit of 62-162 million yuan.
Repeated epidemics put pressure on the performance, and actively responded to cost reduction and efficiency increase: since 2021q3, the repeated epidemics in many places in China have caused continuous disturbance to the normal operation of scenic spots; Q4 superimposes off-season factors, and many scenic spots are intermittently opened, impacting the main performing arts business of the company. As of January 25, 2022, only three scenic spots, Sanya, tanhe ancient city and Yichun Mingyue, were in normal operation. Despite the orderly resumption of projects in many places in the first half of the year, revenue continued to be under pressure in the second half of the year affected by the epidemic. Considering the high fixed cost of the park's operation, the net profit in the second half of the year continued to suffer an impact, affecting the performance of the whole year in 2021, which was lower than the market expectation as a whole. With the frequent occurrence of local cases in Omicron in 2022, it is expected that it will still bring continuous challenges to the recovery and operation of the company in the short term. In view of the recurrence and normalization of the epidemic, in terms of business, the company added outdoor performance seats and flexibly responded to the restrictions that the epidemic prevention policy may have on the indoor performance business; In terms of cost, continue to promote cost reduction and efficiency increase, and alleviate the pressure of revenue contraction by further adjusting the employment mode and optimizing the operation management process.
The product matrix is further improved in layers, and the long-term strategic logic is clear: relying on the advantages of professional team and capital, the company will continue to enrich the product matrix in the future, and further improve it in layers mainly from the two aspects of income composition and age structure, forming a situation of "taking the eternal situation as the guide, supplementing all kinds of small and medium-sized plays and interspersed with all kinds of activities". Shanghai Songcheng opened on April 29, 2021 and completed the first layout of first tier cities. In addition to the trump card performance of eternal love series, it added imported dramas to enrich categories, attract local customers and open growth space; The national song and dance "love in Western Hunan" was successfully performed in Zhang Jia Jie Tourism Group Co.Ltd(000430) , which is different from Zhang Jia Jie Tourism Group Co.Ltd(000430) eternal love, and further tap the sinking market potential. In the future, the project reserves in Zhuhai and other places are still rich. In addition, the activities with young people as the target group achieved positive results. The number of people receiving wonderful night activities in 2021 increased by 384.66% year-on-year; Hangzhou Songcheng received the highest number of night tourists in a single day, setting a new record. The post-80s, 90s and 95s accounted for nearly 95%, of which the post-95s accounted for more than 60%.
Profit forecast, valuation and rating: affected by the epidemic, we lowered the EPS forecast for 21-23 years to 0.12/0.26/0.47 yuan (70% / 61% / 43% respectively). We are optimistic about the long-term development of the company after the epidemic and maintain the "buy" rating.
Risk tip: the epidemic repeatedly affects the recovery and operation risk of the tourism industry, the risk of slowing down macroeconomic growth, and the risk that the operation of new projects is less than expected.
