Fosun Tourism Culture released 23H1 performance announcement: 23H1 achieved revenue of 8.90 billion yuan/yoy +39%, recovering to 98% of 19H1, of which tourism/property sales revenue was 849/4.1 billion yuan; adjusted EBITDA of 2.30 billion yuan, +92%/16% compared to 22H1/19H1, respectively, of which the tourism operation/property sales business adjusted EBITDA was 2,29/0.1 billion yuan respectively. Net profit for the return mother was 4.7 billion yuan, reversing losses from the previous year and recovering to 96.3% of 19H1. In addition, the company 23H1 earned other revenue and net revenue of $385 million, including $280 million from disposal and sale of leaseback resorts, $50 million from disposal of Casa Cook and Cook's Club Hotel, and $0.7 billion in exchange rate revenue.
23H1 Club Med's strong recovery in turnover increased 20% from 19H1, and profitability surpassed before the pandemic.
1) 23H1's turnover was 7.94 billion yuan/yoy +32.2%, exceeding 20% in the same period in '19. Among them, Europe, Africa, the Middle East/America/Asia Pacific respectively recovered to 112.7%/164.6%/92.7% of 19H1, and mainland China's turnover was 320 million yuan, recovering to 83.1% of 19H1. 23H1's recurring operating profit reached RMB 950 million, up 169% from the same period in 2022, exceeding 54% of the same period in 2019; adjusted EBITDA of 1.99 billion yuan, compared to 19H1 +48.2%; recurring EBITDA profit margin was 26%, and 19H1 was 19%.
2) 23H1 global OCC was 62.4%, compared to 19H1-2.7 pCT, and ADR was 1753.3 yuan, compared to 19H1 +32.2%. Among them, the company's four-star and five-star resorts accounted for 96.9%, compared to 19H1+11.2 pct.
3) The 23H1 Club Med capacity was +13.4% year-on-year, recovering to 99.2% of 19H1. Among them, Europe, Africa, the Middle East/America/Asia Pacific recovered to 91.4%/102.2%/109.8% of 19H1, respectively.
4) On July 31, the company announced the launch of Club Med's new high-end urban vacation product line “Mediterranean White Day Ark”. The location will focus on first-tier and new-tier cities. The world's first White Day Ark Nanjing Xianlin Resort is expected to open its doors on 23Q3 to welcome guests.
5) Reservations and new resorts: As of August 5, the cumulative number of bookings for Club Med23H2 was +6%/21% compared to the same period in '22/19, respectively. The cumulative number of bookings for the first half of '24 increased 27% year-on-year. We are optimistic about Club Med's performance during the snow season. The company plans to open 4 new resorts in 23H2; 17 new resorts in 23-25, and capacity will increase by at least 20% in 2025 compared to 2022.
Sanya Atlantis 23H1 had a turnover of +35% compared to 19H1; Lijiang Resort 23H1 had a higher turnover.
1) Atlantis 23H1 had a turnover of 890 million yuan/yoy +82.2%, compared to 19H1 +35%, adjusted EBTIDA was 450 million yuan/yoy +123%, compared to 19H1 +63%, adjusted EBTIDA rate of 52%, and 19H1 was 43%. ADR reached 2408.3 yuan in the first half of the year, compared to 19H1 +1.6%, and OCC was 86.2%, compared to 19H1+24.2 pct; there were 3.2 million visitors, an increase of 107% over the previous year. The Sanya Yate business format continues to be rich. The Mermaid Open and Halloween Scream Night events continued in the second half of the year. We look forward to continued impressive performance in the future.
2) Lijiang Resort 23H1 has a turnover of 0.4 billion yuan/yoy +122.5%, and the number of visitors is 64,000/yoy +39.1%; of these, Club Med Lijiang Resort contributed 0.3 million yuan in turnover, an ADR of 959 yuan, and OCC reached 36%.
3) Taicang Alps International Resort will soon be unveiled in the second half of the year. The resort includes the large-scale indoor ski resort “Alps Snow World” in East China, the Mediterranean White Day Ark Taicang Resort, and the themed shopping street “Alps Time Zone”. It is expected to officially open in 23Q4.
TC China has repositioned itself as a retouring event, the number of members & turnover has continued to grow, and member stickiness has continued to increase.
23H1 strategically withdrew from the Avignon business and repositioned TC China as the Fuyoukai - Fosun Travel & Culture Global Member Operation Platform. As of 23H1, the platform had 6.13 million/yoy +17%, 524,000/yoy +12.6% of new members in the first half of the year, 56,000/yoy +13.6% of paying users; turnover was 180 million yuan/yoy +11.5%, and order volume was 413,000 orders/yoy +128%.
Investment suggestions: The company is one of the leading comprehensive travel groups focusing on leisure and vacation travel. 23H2 bookings continue to grow, and 23 full-year performance is expected to continue to recover; Taicang Alps Snow World and resorts will open in the second half of the year, and more resorts will be launched in the middle of the year, making it optimistic about the company's future growth space. Considering that international routes have not yet recovered to before the pandemic, the company's net profit for 23-25 is estimated to be 47/ 63/82 million, respectively (previous value was 47/730 million in 23-24), adjusted EBITDA of 35.9/42/4.6 billion, and maintained a “buy” rating.
Risk warning: macroeconomic fluctuations, declining consumer spending power, new project construction progress falling short of expectations