Company profile:
Hai Tiandi Yuetu is one of the leading leisure travel groups located in Saipan and Guam. In terms of hotel and resort business, the company has a tourist center and three hotel resorts in Guam and Saipan respectively, of which Fiesta Resort Saipan ranks first in TripAdvisor; in terms of high-end tourism retail business, the company provides nine world-renowned brands of high-end and leisure clothing, leather and fashion accessories, five of which are exclusive brands In terms of destination service business, the company provides sightseeing tours of three popular scenic spots and operates three souvenir and boutique shops to provide booking services for third-party operating activities and itineraries. and cooperate with travel agencies to provide destination concierge and tourism management services for their package holiday guests in Saipan.
Sino-Thai point of view:
A number of positive factors promote the development of Saipan tourism, and the future is promising: the total number of tourists in Saipan increased from about 434000 in 2013 to about 653000 in 2017, with a compound annual growth rate of 10.8 per cent during the period. At the same time, the total spending of Chinese tourists in Saipan has been the highest between 2013 and 2017, with spending of US $560 million in 2017. It is expected that Chinese and South Korean tourists will become the largest source of tourists in the next few years. In a number of positive market drivers, such as the government policy to promote tourism, the increase in connecting flights, the wide range of passengers with a population of more than 1.5 billion within a five-hour flight radius, and the increase in disposable income in major source markets such as China and South Korea, the Saipan leisure tourism market is expected to flourish in the next few years. According to Frost & Sullivan, total industry revenue is expected to reach about $970 million by the end of 2022.
In terms of operating performance: from 2016 to 2018, the operating income of Haitiandi Travel Service was $81 million, $89 million and $100 million, respectively.
The increase in revenue was mainly due to an increase in visitors to Saipan and Guam. The hotel and resort segment accounted for nearly 70% of revenue, with ARR (average rent) of $140 in fiscal year 2018 and RevPAR (average rentable room revenue) of $127.3 over the same period. The company's hotel rental rate in Saipan is generally about 90%, while that in Guam is 80%, which remains relatively stable. The net profit margin was 15.35%, 14.68% and 11.75%, respectively, mainly due to the increase in the contribution of the high-end tourism retail division (which has lower profit margins) (the revenue share from 2016 to 2018 increased from 17.1% to 28.9%).
In terms of valuation: based on 360 million shares after the global public offering, the company's market capitalization is HK $12.74-1.6128 billion, which is lower than that of its Hong Kong counterparts; the company's corresponding price-to-earnings ratio is about 13.8-17.5 times, which is higher than the industry average; and the price-to-book ratio is about 1.81-2.04 times, slightly higher than the industry average. In terms of profitability, the 18-year ROE and ROA were 21.3% and 15.5% respectively, higher than the industry average. Combining the company's industry status, performance and valuation, we give it a score of 66, with a rating of "neutral".
Risk tips: (1) market competition risk (2) the overall economic environment of Asian countries and the impact of tourist preferences