Event
The company released its annual report in 2019, with operating income of 1.305 billion yuan, down 2.95% from the same period last year, net profit of 45 million yuan from the same period last year, down 40.83% from the same period last year, and net profit of 30 million yuan from the same period last year, down 45.21% from the same period last year.
The company released its quarterly report for 2020, showing a net profit loss of 67.9227 million yuan for Q1 and a loss of 69.4173 million yuan for non-parent net profit.
Brief comment
The operating income is relatively stable, and the project promotion is carried out steadily.
In 2019, the company's annual operating income decreased by 2.95% compared with the same period last year, and its net profit decreased by 40.83% compared with the same period last year. The main reason for the decrease in operating income and net profit compared with the same period last year is that the original "Dream back to Datang" project of the company's Datang Furong Garden Management Branch was suspended in April 2019, and the company's Tanghua Hotel, Xi'an Qujiang International Hotel Management Co., Ltd. catering branch project was prepared, and the Royal Banquet Palace was upgraded and renovated. In terms of cash flow, the net cash flow generated by operating activities in 2019 was 47 million yuan, a decrease of 68.15% compared with the same period last year, mainly due to the increase in the current payment for collecting tickets to scenic spots and the operation share of Datang Furong Garden paid according to the agreement; on the expense side, the company's sales expense rate in 2019 was 4.91%, down 0.14pct from the same period last year. The rate of management expenses is 13.90%, which is higher than that of the same period last year. The financial expense rate was 1.87%, an increase in 0.19pct compared with the same period last year. The gross profit margin in 2019 was 26.22%, a decrease in 0.90pct compared with the same period last year, mainly due to the decline in gross profit margin in the hotel catering sector. On the asset-liability side, the company's total assets increased by 22.59% year-on-year by the end of 2019, mainly due to the increase in fixed assets and projects under construction. The asset-liability ratio was 59.98%, an increase of 7.48pctbot 20Q1 over the same period last year, and the company achieved revenue of 165 million yuan, down 48.15% from the same period last year. The net profit of returning to the mother was-67.9227 million yuan, down 321.75% from the same period last year. The epidemic had a great impact on the performance in the first quarter. The net cash flow of Q1 operating activities was-24.7363 million yuan, compared with-38.5112 million yuan at the end of last year, mainly due to the decrease of cost expenditure affected by the epidemic.
Short-term pressure on scenic spots and catering performance, and orderly development of commodity sales
In 2019, the operating income of the company's scenic spot operation and management business reached 856 million yuan, down 2.71% from the same period last year, and the gross profit margin was 35.64% (- 0.31pct). The hotel catering business achieved an operating income of 191 million yuan, an increase of 0.97% over the same period last year, a gross profit margin of 9.3% (- 7.24pct), and a year-on-year increase of 9.72% in operating costs, mainly due to an increase of 14.67% in labor costs and 6.94% in catering commodity service costs. The operating income of the tourism commodity sales business was 13 million yuan, an increase of 57.44% over the same period last year, and the operating cost was 7.5659 million yuan, an increase of 94.72% over the same period last year, mainly due to the increase in the company's commodity sales business, with a gross profit margin of 43.46% (- 10.82pct). The operating income of the tourism service (travel agency) business was 212 million yuan, down 8.51% from the same period last year, and the gross profit margin was 4.58% (+ 0.04pct). The operating income of landscaping was 32 million yuan, a decrease of 7.62% over the same period last year, and the gross profit margin was 11.83% (+ 6.45pct). In terms of quarterly financial data, the net profit of Q1-Q3 is 31 million yuan, 34 million yuan and 38 million yuan respectively, and the loss of Q4 net profit is-58 million yuan. In 2019, the undersea restaurant of Ocean Polar Park was completed and opened to the public on June 21. The Lou Guan Tourism Distribution Center opened for trial operation on May 1.
The golden version of "Dream back to Datang" has been promoted steadily for its successful premiere. The upgrading and transformation of the Royal Banquet Palace and the night excursion of water dance and shadow show in Furong Garden have all been completed. A number of key activities such as the Datang Furong Garden Spring Festival and the Daming Palace International Kite Festival were successfully held to actively promote the intelligent construction of the scenic spot.
The impact of the epidemic on the performance in the first quarter will benefit for a long time from the optimization of industrial layout. COVID-19 's epidemic has brought a greater impact on the development of the cultural tourism industry. The company's 2020Q1 net profit loss is mainly due to the decrease in ticket revenue and travel agency income affected by the epidemic. Datang Furong Garden Scenic area, Xi'an City Wall Scenic area, Daming Palace National ruins Park and Lou Guandao Cultural Exhibition area have been reopened to the public since February 29, while Qujiang Ocean Polar Park is still not open for the time being. In 2019, the company seeks transformation and development according to the strategic goal of "one nuclear, three transformation and four major industries" and actively explores the development model of "cultural creativity + tourism services + life services". Datang Furong Garden, Qujiangchi Fitness Trail Promotion Project completed, Qujiang Youth Park opened to the public; recorded "Daily of the Tang Dynasty" with Youku, landed 16 "Tang +" wisdom convenience stores, operated 6 Wenchuang stores in major scenic spots, and launched self-created brands such as "Tang Li" rice wine and "Qujiang Water", landing Quantum Morning Restaurant, "YEP" Coffee, Leisure Court Restaurant, Hewei Restaurant and undersea Restaurant. The key projects were carried out in an orderly manner, the undersea restaurant of Ocean Polar Park was completed and opened to the public, the Lou Guan Tourism Distribution Center was opened for trial operation, and the golden version of "Dream back to Datang" was successfully premiered. In 2019, the balance of the company's construction project is 497 million yuan, of which, the reconstruction and expansion project of Tanghua Hotel is 399 million yuan, the water dance light and shadow show project of Datang Furong Garden night tour series is 22.4496 million yuan, and the Imperial Banquet Palace upgrading project is 75.2771 million yuan. In 2020, the company will continue to promote Ocean Park favorite coffee, Lu Yu teahouse cultural creation space, Tang + smart containers, and cultivate new business growth poles. The company's Datang Furong Garden Fanglinyuan Hotel will be closed for upgrading from April 1, 2020, with an estimated investment of about 123 million yuan.
Investment suggestion: affected by the operation and management business of scenic spots and the transformation and upgrading of hotel catering business, the business performance in 2019 is under pressure, and the impact of the epidemic is mainly concentrated in 2020, and the overall domestic tourism gradually recovers in the second half of the year. In the future, the strategic goal of "one nuclear, three transformation and four major industries" will promote the transformation and upgrading of the company, and is expected to improve the profitability.
It is estimated that the return net profit of the company from 2020 to 2021 is 8.01 million yuan and 62.22 million yuan, corresponding to 0.04 yuan and 0.29 yuan corresponding to EPS, and the current stock price corresponds to 190X and 24X, maintaining the "overweight" rating.
Risk tips: the impact of the epidemic continues; the income generated by the company's new projects is not as expected; the systemic risk of the tourism market; macroeconomic recovery is not as expected.
