Event: Lijiang Co., Ltd. released 2023H1 semi-annual report. The company's 23H1 realized operating income of 392 million yuan, an increase of 396.88% over 80 million yuan in the same period last year; net profit from home reached 121 million yuan, an increase of 326.48% over-53 million yuan in the same period last year, and realized a turnround from losses to profits; 23H1 realized net profit of 126 million yuan from non-return, an increase of 311.16% over-60 million yuan in the same period last year.
The number of visitors to the cableway, performing arts and hotel projects of 23H1 has increased significantly. At the ropeway project level, the three cableways of 23H1 received a total of 3.0066 million tourists, an increase of 484.37% over the same period last year. Lijiang had a total of 347 performances and received 799000 tourists, up 3603.08% over the same period last year, with operating income of 76.6008 million yuan, an increase of 3878.02%, and a net profit of 33.567 million yuan, up 481.08%. At the hotel project level, Lijiang Hefu Hotel Co., Ltd. achieved an operating income of 64.1182 million yuan, an increase of 209.44% over the same period last year, a net profit of 988200 yuan, and a net profit of 24.0216 million yuan over the same period last year. Diqing Shambala Tourism Investment Co., Ltd. (including Diqing Indigo Hotel, Benzilan Lishi Hotel, Shangri-La Lishi Hotel) achieved an operating income of 13.9081 million yuan, an increase of 139.40% over the same period last year, a loss of 14.4972 million yuan, and a loss of 2.2262 million yuan over the same period last year.
With the recovery of travel demand, the company's costs and expenses are strictly controlled. In terms of gross profit margin, the company's 23H1 gross profit margin reached 64.56%, an increase of 76.41pct over the same period last year; in terms of fees, the 23H1 sales rate of 3.20% was lower than the 10.75% and 8.84% of the same level in 19 and 22 years. The high revenue brought about by the increase in the number of tourists and relatively rigid fees led to the reduction of sales rates.
In the new project dimension, the company continues to promote the reconstruction and expansion projects of Lugu Lake Mosuo Town and Yuniuping cableway to create Shangri-La eco-tourism circle. The company plans to fully complete the construction of the Lugu Lake Indiger Hotel and strive for the Mosuo Palace Performing Arts project to start as soon as possible. At present, the progress of the Mosuo town project has reached 10.73%. At the same time, we will speed up the reconstruction and expansion project of the Yuniuping cableway to enhance the traffic coordination and passenger carrying capacity of the scenic area. On July 3, 2023, the Yulong Snow Mountain Ganhaizi tourist distribution center project will be put into operation on the ground. In the future, the traffic organization of the Ganhaizi area in the Yulong Snow Mountain scenic spot will be optimized to improve the operation efficiency. At the same time, the project is located opposite the impression Lijiang. The operation of the distribution center is expected to promote the tourist conversion rate of Lijiang, with greater growth flexibility.
Investment suggestion: the company is expected to achieve revenue of 8.28 / 9.18 / 960 million yuan and net profit of 2.45 / 2.67 / 290 million yuan in 23-25 years, corresponding to PE of 24.2 / 22.2 / 20.4X, maintaining the "overweight" rating.
Risk tips: security events in scenic spots affect demand; new project progress is not as expected; natural climate impact.