Core views
During the 2023 Mid-Autumn National Day holiday, the company's Club Med China, Atlantis and other businesses performed well. The demand side was high quality and the turnover significantly exceeded the same period in 2019, continuously verifying the resilience of the current supply of high-quality leisure vacations. Club Med expects to open 17 new resorts in 2023-2025, with an optimized business model and an asset-based operation.
There is still room for improvement in the one-stop leisure resort at Atlantis Sanya. Club Med Mediterranean White Day Ark Nanjing Xianlin Resort and the Taicang project will open and operate in the near future.
Overall, it has benefited from the power of high-quality high-end vacation products and the rise of urban leisure vacations.
occurrences
During the 2023 Mid-Autumn National Day holiday, the performance of various domestic businesses such as Club Med and Sanya Atlantis, and many other indicators such as turnover, occupancy rate, and average daily room rate were all high quality.
Brief review
A number of operating indicators clearly surpassed before the epidemic, and the resilience of high-quality leisure vacations was continuously verified. According to comparable standards, Club Med China Resort's total turnover exceeded 90% for the same period in 2022, surpassed by about 25% for the same period in 2019, and an average occupancy rate of 90%. Among them, the occupancy rate of Lijiang and Guilin resorts was over 94% from September 30 to October 4, and the Lijiang Resort was fully booked from October 1 to 3. On the Club Med Joyview side, the occupancy rate of Gold Coast Resort reached over 97% on the 7th, full rooms for 5 consecutive days from September 30 to October 4, and the occupancy rate for Yanqing Resort was over 90% from October 1 to 3. Club Med's overall demand side product performance in China was excellent, and the turnover before the epidemic was clearly higher than before the epidemic. Nanjing Xianlin Resort began pre-sale on October 8. According to the plan for the past two years, there are still several domestic village plans to be implemented. In the future, it is expected that it will continue to benefit from the model of providing high-quality vacation products around the city, and the layout of China will be improved; the turnover of Atlantis Sanya has exceeded by more than 4 times the same period in 2022 and 21% over the same period in 2019. The average occupancy rate is 90%, and the highest is over 97%. The average housing price was about 3,948 yuan. The average housing price on October 1, 2, and 3 was above 4,400 yuan. The total number of visitors was 186,000, an increase of 257% over the same period in 2022.
Continuously optimize and sort out each business to gradually unleash growth potential
The quality performance of the company's business during the holiday period continues to verify the resilience of the supply of high-quality leisure vacation in the current travel market. The company adjusted its business classification, continued to optimize its business structure through asset-light and other models, and continued to advance in cost control and fee reduction. There is still room for high-quality expansion in domestic and overseas resorts and other businesses in the future, and will continue to benefit from the increase in the penetration rate of high-end domestic leisure vacations and leisure tours around cities.
Investment suggestions: Net profit of 471 million yuan, 677 million yuan, and 852 million yuan is expected to be achieved from 2023-2025. The current share price corresponding PE is 18X, 12X, and 10X, maintaining “increase in holdings”.
Risk analysis
1. If the expansion of domestic resorts and tourism products falls short of expectations, the opening and cultivation of the Tour City project falls short of expectations, or it may cause the company's overall turnover growth space to be limited in the future. If the operating efficiency of newly developed resorts in China is generally also likely to affect the growth space; 2. If repairs fall short of expectations, some high-asset construction projects in the early stages may also put some pressure on cash flow, and interest-bearing liabilities put pressure on financial expenses; 3. If the overall occupancy rate of Sanya Atlantis and room price increases is limited, then there is limited room for long-term growth in the future. Overall turnover growth; 4. Other influencing factors such as future IP addition and integration, macro environment and consumption preferences.