What happened: the company released its third quarterly report for 2022. In the first three quarters of 2022, the company achieved operating income of 15.2 billion yuan, an increase of 1.96% over the same period last year; the net loss of homing was about 990 million yuan, a substantial increase over the loss of 260 million yuan in the same period last year; and the net loss of non-homing was about 1.03 billion yuan, a sharp increase over the loss of 260 million yuan in the same period last year.
The company's operating income in the third quarter of 22 was 5.75 billion yuan, an increase of 8.9 percent over the same period last year. The company's net loss was 230 million yuan, slightly less than that of the same period last year (260 million yuan), and a loss of 140 million yuan compared with Q2.
With repeated domestic epidemics, more long-distance lines have been opened to promote the growth of passenger transport revenue. In the first nine months of 22, the company sent a total of 22.56 million passengers, down 28.8 percent from the same period in 21 years and 67 percent from the same period in 19 years, mainly due to the repeated impact of the domestic epidemic. The passenger volume of intercity trains, through trains and long-distance trains decreased by 39.8%, 100% and 21.1% respectively compared with the same period in 21 years, and 74%, 100% and 58% respectively compared with the same period in 19 years.
The company's per capita passenger revenue rose 71% in the first half of 22 compared with the same period last year, mainly due to the operation of some cross-line long-distance EMU trains heading for the Jiangxi-Shenzhen high-speed railway. In addition, since April 2021, the company has applied for some additional cross-line long-distance EMU trains. Combined with the above factors, the company achieved passenger transport revenue of 3.13 billion yuan in the first half of 2022, an increase of 6.4 percent over the same period in 2021 and a decrease of 23 percent over the same period in 2019.
The number of train operation decreased, and the revenue from road network liquidation decreased compared with the same period last year. The revenue of the company's road network clearing service in the first half of 2022 was about 1.63 billion yuan, down 10.9% from the same period in 2021 and 20% compared with the same period in 19 years. This is mainly due to the impact of the domestic epidemic and the decrease in the number of passenger train running pairs compared with the same period last year. Revenue from other transport services in the first half of 2022 was about 3.46 billion yuan, an increase of 1.7 percent over the same period in 2021 and 29 percent over the same period in 19 years. This is mainly due to the company's new railway operation services for the Jiangxi-Shenzhen Railway.
The freight business is in the doldrums. The company delivered about 12.25 million tons of goods in September 22, down 13.2% from the same period in 21 years and 1.8% higher than the same period in 19 years. The total turnover of goods delivered by the company in June 22 was 13.3% lower than that in the same period in 21 years and 6.4% lower than that in the same period in 19 years, mainly due to the epidemic situation of COVID-19 and the slowdown in macroeconomic growth. Combined with the above factors, the company achieved freight revenue of 830 million yuan in the first half of 2022, down 16.7 percent from the same period in 2021 and 9.8 percent from the same period in 19 years.
Costs continued to rise and gross profit margin turned negative compared with the same period last year. The company's main cost rose 8.7% year-on-year in the first half of 2022, lower than the growth rate of operating income in the same period, mainly due to the rigidity of part of the company's operating costs. In the context of the new cross-line long-distance EMU trains, the company's labor costs, equipment rental service charges, depreciation, materials and water and electricity consumption increased by 3.8%, 19.1%, 1.1% and 1.6% respectively in the first half of 2022 compared with the same period last year. Combined with the above factors, the company's gross profit margin in the first three quarters of 2022 was-7.6%, which was significantly lower than that of the same period last year (- 0.92%). The company's gross profit margin in the third quarter of 2022 was-4.1%, which was somewhat higher than that of Q1 (- 9.3%) and Q2 (- 10.1%).
Investment advice: the negative impact of the epidemic on the company's production and operation will continue, and short-term profits will be under pressure. Considering that the company's domestic epidemic situation is still repeated, we downgrade the company's 22-24 net profit forecast to-1.33 billion yuan, + 250 million yuan, + 550 million yuan (originally-280 million yuan, + 280 million yuan, + 570 million yuan). We maintain the company's A-share and H-share "overweight" rating.
Risk hints: the macroeconomic downturn led to the downward demand for passenger and freight transport; the passenger volume of self-operated railway lines declined significantly; and the growth of road network liquidation income and railway operation service income was lower than expected.