Main points of investment
Company announcement: 2023H1, the company achieved revenue of 392 million yuan / year-on-year 2019H1 growth of 23.26%, net profit / deduction of 1.21 / 126 million yuan, year-on-year 2019H1 increased by 23.47% / 33.42% respectively (in the previous forecast median) In the single quarter of 2023Q2, the company realized revenue of 212 million yuan / year-on-year 2019Q2 growth of 11.84%, and net profit / deduction of 65,85,000,000 yuan of non-parent net profit, which increased by 4.98% and 15.98% respectively over the same period of 2019Q2.
Comments:
The passenger flow increased beautifully in the first half of the year, the bottleneck of large ropeway carrying capacity and the resumption of the second elimination project restricted the release of Q2 performance. 2023Q2, the company's revenue / performance increased by 11.84% and 4.98% respectively compared with 2019Q2. The growth rate of the performance side was lower than that of the revenue side, which was mainly due to the loss of the new hotel. Excluding the non-homed net profit, it increased by 23.52% compared with 19Q2. Look at the items:
1) cableway: 2023H1, the three cableways received a total of 3.0066 million tourists / + 43% (compared with the same period in 2019, the same below). Among them, Yulong Snow Mountain cableway 1.6348 million person-time / + 11%, spruce ping 1.222 million person-time / + 128%, yak ping 149800 person-time / + 74%, Yulong cableway receives 10,000 people a day, Q2 receives 857900 person-times, close to the upper limit of 910000 person-times. Spruce ping and yak ping benefited from the diversion of the big ropeway, and the number of reception increased significantly.
2) performances: impression Lijiang had a total of 347 performances, received a total of 799000 tourists, realized business income of 7660.08 million yuan /-1.0%, and realized net profit of 3356.70 million yuan / + 0.8%. The income and net profit of performing arts projects in the first half of the year were the same as in the same period of 19 years. The performance is weaker than the growth rate of passenger flow on the ropeway, which is presumed to be mainly affected by the decline in the willingness of tourists to spend.
3) Hotel and commercial street: Lijiang Hefu Hotel (including Continental Hotel, Indigo Hotel, Ancient City Lishi Hotel, 5596 Shopping Street, Lishishan House) realized business income of 6411.82 million yuan / + 25%, net profit of 988200 yuan, and 2019H1 loss of 9.5278 million yuan. Diqing Shangbala Tourism (including Diqing Indigo Hotel, Benzilan Lishi Hotel, Shangri-La Lishi Hotel) achieved a business income of 1390.81 million yuan / year-on-year + 139%, a loss of 1449.72 yuan / year-on-year loss of 2.2262 million yuan. The original hotel project made a profit with the growth of passenger flow, the cultivation of new projects accelerated, and the Q2 loss narrowed by about 9.821 million yuan month-on-month. We look forward to a further increase in occupancy and room prices during the summer peak season.
Summer passenger flow has returned to high growth, and is optimistic about the prosperity of the peak season. According to Lijiang Culture Travel: 1) from July 1 to 16, Yulong Snow Mountain received a total of 460000 tourists, and the average daily passenger flow increased by about 30% compared with July-August 2019. According to the previous summer passenger flow performance, it gradually reached the peak from mid-late July to early August, so there is still room for improvement in the overall growth rate. 2) from July 1 to 17, Lijiang Ancient City Scenic area received a total of 2.975 million tourists / an increase of 42% compared with 2019. In addition, the increase in the proportion of summer group guests will lead to the growth of the second consumer. "impression of Lijiang" will be performed once a day, and the hotel is expected to reduce losses for the whole year.
Profit forecast and investment advice: the growth rate of 23Q2 core business is not as fast as the overall passenger flow, on the one hand, it comes from the bottleneck of cableway transportation, on the other hand, due to the decline in consumption capacity, other businesses except large cableways are expected to increase month-on-month in summer. At the same time, the company occupies a leading position in tourism in northwest Yunnan, with high-quality tourism resources of Shangri-La Ring (Lijiang, Shangri-La, Benzilan, Bucun, Batang, Aden, Lugu Lake, Jinsha River tourism belt), the overall tourism growth rate of the region also leads the domestic; at the same time, Lijiang traffic and urban track continue to improve, as well as the headquarters mountain traffic and ropeway reconstruction project is expected. It is estimated that the net profit from 2023 to 2025 will be RMB 311,351 million, corresponding to the closing price of PE on August 14, 2023, which is 16.9 times higher than that of 22.3 Universe, covering and issuing an "overweight" rating for the first time.
Risk tips: passenger flow growth is not as expected, industry systemic risk, corporate governance risk and so on.