The main business continued to be under pressure, resulting in a net profit loss of 95 million yuan. On the evening of February 22, the company released its 2016 annual report. During the reporting period, it achieved a total operating income of 126 million yuan, a year-on-year decrease of -16.97%; realized net profit of 95 million yuan, the second loss in the past five years (net profit from the mother's return in 2014 was -033 million yuan), EPS-0.5 yuan. On a quarterly basis, Q1-Q4 achieved revenue of $040 million (-16.83%), $0.45 million (+14.72%), $65 million (-18.29%), and $112 million (-57.62%), respectively; Q1-Q4 contributed net profit of -29 million yuan (-9.5%), -0.1 billion yuan (+30.14%), 0.13 billion yuan (+53.46%), and -069 million yuan (-281.04%), respectively. The company experienced large losses in 2016 compared to the same period last year. The main reasons: ① due to the continuous impact of the 2015 Nepal earthquake, the Xiangke team was blocked from entering the country; ② due to the construction of advanced highways, the original national highway was replaced by a construction walkway to reduce the accessibility of scenic spots; ③ In order to cooperate with the construction and operation of Lulang International Town, the maintenance efforts of National Highway 318 increased, resulting in a decrease of nearly 50% in the number of visitors received over the same period last year. ④ Affected by the relevant standards for vehicles applicable to the plateau, plateau vehicles needed to be renewed and eliminated, leading to a significant increase in the company's loss of non-current assets. ⑤ Compared to the same period last year, Guofeng advertisements were no longer included in the consolidated report during the reporting period. If this reason were excluded, operating income actually increased by 6.9598 million yuan on a comparable scale compared to 2015.

Gross margin increased by 3.41% year on year, and the cost rate rose sharply due to increased marketing efforts in scenic spots. The gross margin for the reporting period was 35.35%, up 3.41 percentage points from the previous year. The period fee rate was 94.32%, up 20 percentage points from the previous year, mainly due to the large increase in management expenses and sales expenses; among them, the sales expense ratio was 24.6%, up 10.03% from the previous year, mainly due to the sharp increase in sales expenses of 40.19% due to increased marketing channel maintenance costs to enhance the competitiveness of the company's scenic spots; the management expense ratio was 56.96%, up 11.52 percentage points from the previous year, brought about by the increase in fixed asset amortization expenses; the financial expense ratio was 12.75%, down 1.56 percentage points year on year, thanks to the company Lower interest rates on long-term loans have brought about a 26% reduction in financial expenses.

Focus on endogenous development and make it clear that the in-depth operation of scenic spots is the future priority. First, during the reporting period, the negative impact of the Nepal earthquake and the “two limits and one police” policy gradually declined. The number of visitors gradually showed a resumed growth trend. Combined with the factors of increased online and offline publicity efforts, it played a positive role in maintaining the tourist flow of scenic spots, but there is still a certain gap with expectations. Second, the company's hotels and scenic spots have achieved joint development, delegated hotel management rights to scenic spots, and set up a Himalayan hotel series, which is expected to further enhance hotel management level and management philosophy and optimize service awareness and level. At the same time, the company's main scenic spots, Ali and Linzhi, are popular tourist destinations in the region. The supporting facilities need to be improved, and the in-depth operation space is large. The increase in majority shareholders' holdings further reflects the clear goal of steadfast development and endogenous growth in the future.

Maintain profit forecasts and maintain a “increase in holdings” rating. The company is a listing platform for scarce tourism in Tibet, holding core local tourism resources. The majority shareholders of the company have increased their holdings many times before, demonstrating their determination for future development and are optimistic about long-term investment value in the context of major transportation and infrastructure improvements. Furthermore, the company's market capitalization is only 4 billion dollars, and there are certain bottlenecks in the development of the main business in the short term. It is not ruled out that there will still be capital operations in the future. The 17-18 EPS was 0.032/0.037/0.041, maintaining the “increase in holdings” rating

Risk warning: extreme weather effects, regional policy factors.