The current situation of the company
The company has received notice from the Anhui Provincial Price Bureau that from September 28, 2018, the peak season ticket price in Huangshan Scenic spot has been reduced from 230 yuan per person to 190 yuan per person. Prior to this, Wuzhen, Emeishan and other listed company scenic spots have reduced prices one after another, we believe that this is a normal measure under the trend of "reducing the ticket prices of key state-owned scenic spots", at the same time, the impact on the company's operation is limited.
Comment
The fare reduction has a limited impact on the company's performance. 1) in 2017, the company realized 233 million yuan in revenue from the garden development business (that is, tickets), accounting for 13% of the total revenue. The price reduction will have a certain impact, but according to our preliminary estimate, the impact on the 19-year total income of 2018 Universe is only about 0.5% (18 years only affects the fourth quarter). 2) at present, the group break-up ratio of Huangshan Scenic spot is about 1:1, and the fare reduction may promote the growth of individual passenger flow, and the group company is expected to make up for the price reduction losses by settling discounts on packaged services such as cableways and hotels. 3) the company is committed to increasing marketing efforts and horizontal expansion of traditional business, enriching consumption formats and raising the level of comprehensive consumption.
Operational efficiency is still ahead of natural scenic spots, and high-speed rail dividends drive passenger flow growth. 1) compared with other natural scenic spots, Huangshan has more scarce resources and higher operational efficiency. In 2017, both single passenger flow income (530 yuan) and single passenger flow profit (123 yuan) are significantly ahead, about 1.6 times and 2.0 times that of Emei Mountain. 2) the Hang-Huang high-speed railway has entered the joint survey stage and is expected to open before the end of this year, when Huangshan will be included in the "four-hour traffic circle" in China's richest Yangtze River Delta region, bringing deterministic growth in passenger flow.
Valuation proposal
Due to the reduction in ticket prices in Huangshan Scenic spot, we have slightly lowered the company's 2018-19 net profit forecast of 0.9% to 447 million / 493 million. The current share price corresponds to 2018 Universe, 17 / 16 / 19 / 19 / 17 / 16 / P / E. It maintains the recommended rating of Aamp B shares, but due to the decline in ticket prices and recent market adjustments, it has lowered the target price of Aamp B shares by 17% to 12.53 yuan / US $1.45, respectively, which is based on the price-to-earnings ratio of 1919 Universe in 2019. There is room for a rise of 20% and 21%, respectively.
Risk
The bad weather affects the passenger flow of the scenic spot, and the extension expansion project is not as fast as expected.
