Company overview
The company is a well-known tourism service provider located in Ningbo, Zhejiang Province, China, gaining a wide range of customers through tourism plazas, retail branches, sales offices, websites and applications.
Design, develop and sell tour groups and individual travel products, and provide other tourism supporting products and services to customers.
According to Frost Sullivan, the company ranked fifth in revenue among all travel agencies in Zhejiang province in 2017, with a market share of 0.9%.
FY2016-FY2018 's performance grew steadily, with revenue of 410.11 million yuan, 464.84 million yuan and 492.85 million yuan respectively, and CAGR9.6%; adjusted net profit of 18.02 million yuan, 29.95 million yuan and 32.83 million yuan respectively, CAGR35%. From 2016 to 2018, the gross profit margin was 16.9%, 19.3% and 21.6% respectively, showing a trend of increase year by year.
Industry status and prospects
With the continuous development of China's economy and the continuous increase of per capita disposable income, China's tourism consumption is growing rapidly. The overall tourism consumption is expected to reach 8.8275 trillion yuan by 2022, and the per capita tourism consumption expenditure has also increased from 1090.8 yuan in 2018 to 1286.6 yuan, CAGR4.2%.
China's tourism market is increasingly showing a trend of product diversification and customization, and the tourism demand of residents from third-and fourth-tier cities is gradually released, which has become a new market opportunity.
Advantages and opportunities
One of the leading integrated one-stop tourism service providers in Zhejiang Province, China.
Through a variety of ways to provide professional, high-quality and personalized services to meet customer needs.
The supply of products is diversified and can meet the needs of different customers.
Rich technical knowledge and information technology capabilities provide support for the future development of free travel products.
Weakness and risk
The company's income comes from Chinese customers, so it is affected by China's economic fluctuations.
Significant adverse changes in the economic, political or social environment related to the destination country and the deterioration of diplomatic relations with China may have a significant adverse impact on the company's business.
Natural disasters, terrorist activities, wars, travel accidents, infectious diseases and other negative situations will affect the company's business operations.
Market competition from travel agencies, hotel and flight suppliers, and online travel platforms has intensified.
Investment valuation
Based on the prospectus pricing (HK $1.01-HK $1.10) and 2018 adjusted net profit (excluding listing expenses, RMB32.833 million to HK $1.1338), the company's fully diluted price-to-earnings ratio for 2018 is moderate. Due to the small market capitalization of the company, we give IPO a special rating of "4".