Recently, the company released its 2022 annual performance forecast, and it is expected that it will lose money for the whole year. The company's net profit to parent is estimated to be -160 million yuan to 190 million yuan for the whole year. Compared with 2021, the loss may increase by 25.20% to 48.67%.
The company's business travel and lodging businesses were clearly repeatedly affected by the COVID-19 pandemic throughout 2022, but with the relaxation of prevention and control measures, restrictions on the company's domestic business will decrease, the resumption of the outbound travel business will soon begin, and performance is expected to rebound deeply. We maintain the company's holdings and ratings.
Key points to support ratings
The impact of the epidemic is obvious, and losses will expand throughout the year. According to the 2022 annual results pre-loss announcement issued by the company recently, it is expected to achieve net profit of 160 million yuan to 190 million yuan, loss may increase 25.20% to 48.67% year on year in 2022; non-net profit is expected to be -220 million yuan to -260 million yuan, loss may increase 19.19% ~ 40.86% year on year; operating income is expected to be 93 to 1.2 billion yuan, a decrease of 21.36% to 39.06% year on year. The company's main inbound and outbound travel business has not recovered in 2022, and due to the spread of the epidemic and the short-term impact after the liberalization of the epidemic at the end of the year, domestic business travel business and accommodation business operations have been limited.
Spring Festival travel data has been recovered, and we look forward to a rapid recovery in outbound travel. The Ministry of Culture and Tourism announced that travel agencies and online travel companies across the country will resume group trips and “flight+hotel” services for Chinese citizens to the countries concerned on a pilot basis starting February 6. Travel confidence has been strengthened. According to Ctrip data, during the Spring Festival in 2023, cross-border air ticket orders increased more than fourfold year on year, and overall outbound travel orders increased 640% year on year. Travel order performance was the best in the past three years. The company announcement also mentioned that during the Spring Festival, the company's business travel, accommodation, catering and other businesses achieved a strong recovery, and the willingness to travel abroad clearly recovered. The company also said that its subsidiary Guang Tour has carried out work such as promoting and publishing outbound travel products in response to existing policies and market demand, and that the resumption of the outbound travel business is already on its way.
Get grants through difficult times and continue to strengthen resource control. It was difficult for the company to operate in 2022, but from the beginning of the year to November 29, it received a total of 53.46 million yuan in various government grants, accounting for 41.83% of the absolute value of net profit for the most recent year, which helped the company's operations to a certain extent. Furthermore, as a state-owned enterprise and an enterprise that has some control over cultural tourism resources in the Guangdong-Hong Kong-Macao Greater Bay Area, on the one hand, the company continues to integrate tourism resources in the Greater Bay Area and explore new markets. On the other hand, it is also actively expanding its commercial footprint, carrying out a nationwide layout, and continuously building its own comprehensive destination service system.
valuations
As a cultural tourism resource enterprise with regional advantages, the company has some control over territorial resources. In addition, the company's pre-pandemic revenue was dominated by outbound travel. Currently, favorable outbound travel policies continue to be introduced and market confidence continues to recover. We are optimistic about the future recovery of the company's related business, but considering that the company's 22-year performance data is lower than expected, the company's 23-24 EPS forecast is 0.22/0.42 yuan, and the corresponding price-earnings ratio of 23-24 is 49.7/26.3 times, maintaining the rating for increasing holdings.
The main risks faced by ratings
The impact of the epidemic was repeated in the short term, market competition risks, and expansion progress fell short of expectations