On September 28, 2022, the company issued a foreign investment announcement that its controlling subsidiary, Guang Tour, increased its capital to Hainan SEZ CITS. After the completion of this transaction, Guang Tour will take a 51% stake in Hainan SEZ CITS as its controlling shareholder. This transaction is in line with the company's development strategy such as "giving consideration to both places" and is conducive to enriching its ground connection capacity in Hainan and making full use of the policy advantages of "Hainan Free Trade pilot Zone". Strengthen its ability to control Hainan tourism resources and the construction of domestic destination resource supply chain.
Support the main points of rating
The merger and acquisition of Hainan Special Economic Zone CITS will enrich the integration of the group. According to the company announcement, Guangzhou Guangzhi International Travel Service Co., Ltd. (Guangzhou Travel), a subsidiary of the company, plans to contribute 2536759.78 yuan with its own capital to subscribe for Hainan Special Economic Zone International Travel Service Co., Ltd. (Hainan Special Zone International Travel Service Co., Ltd.) with an additional registered capital of 1785000.00 yuan. In addition, natural persons Han Xianchou, Huang Chunrong and Han Jin subscribed for a total of 305548.10 yuan to subscribe for Hainan SEZ CITS with an additional registered capital of 215000.00 yuan. After the completion of this capital increase, Guangzhou Travel will hold a 51% stake in Hainan SEZ CITS and become the controlling shareholder of Hainan SEZ CITS. The main business of Hainan Special Economic Zone International Travel Service, which is the investment target, includes destination reception and group organization, in which the ground pick-up business is its core, and it has accumulated certain resources for many years in Hainan. And it is a fully qualified travel agency with business licenses for outbound tourism, domestic tourism, inbound tourism and other travel agencies.
This acquisition is expected to enrich the strategic layout of the company's organization and land integration. Prior to this, the company has successively acquired Shanghai Shenshen International Travel Service, Xi'an Qinfeng International Travel Service, Shanxi Hyundai China Travel Service, etc., after this transaction, the company will once again expand the company's business scope and improve its ability to master destination resources. promote the coordinated development of destination services, product supply, channel development and other business.
Be optimistic about and expand Hainan tourism market. As a special economic zone and free trade pilot zone in China, Hainan Province enjoys preferential fiscal, tax and subsidy policies in tourism, exhibition, medical care, trade and retail and other fields.
At the same time, Hainan continues to build an international tourism island, making use of its rich tourism resources to hit high-end tourism destinations, tourism attractiveness is gradually improved, and there is more room for the development of the tourism market. The merger and acquisition of the company will help to expand the Hainan tourism market and create a future Hainan destination reception service center for Guangzhou Tour, which is expected to enjoy more favorable factors for the development of Hainan tourism market in the future.
The policy margin is relaxed and the tourism industry is expected to recover further. The impact of the recent epidemic has not been significantly expanded, and the Ministry of Culture and Tourism has openly solicited opinions on the measures for the Administration of Border Tourism, and the relaxation of Hong Kong's immigration policy marks the marginal relaxation of China's immigration policy. The business travel business operated by Guang Tour was the core of the company's business before the epidemic, and its revenue in 2019 was 86% of the company's revenue level, while under the epidemic, the business travel business was seriously hindered and some of the business stagnated. At present, the company's practice of continuing to lay out the tourism business with rich resources demonstrates its confidence in the recovery of the tourism industry in the future.
Valuation
The company's overseas investment enriches its local access resources, strengthens the company's ability to control Hainan tourism resources, and promotes the company to build a supply chain of destination resources. at the same time, Hainan has great potential for tourism development, and this layout will help the company to improve its long-term performance. to sum up, we maintain a forecast EPS of 0.10 / 0.26 / 0.50 yuan and a corresponding price-to-earnings ratio of 91.2 / 34.8 / 17.7 times for 22-24 years. And maintain the overweight rating.
Main risks faced by rating
COVID-19 epidemic repeated risk, market competition aggravated risk, policy relaxation is less than expected risk.