3Q23 performance meets market expectations
The company announced 3Q23 results: revenue in the first three quarters was 3.852 billion yuan, an increase of 90% over the same period last year; net profit was-697 million yuan, compared with-1.511 billion yuan in the same period last year. The company's performance is in line with market expectations. The company's 3Q23 realized revenue of 1.636 billion yuan, an increase of 111% over the same period last year and 40% month-on-month growth. The net profit of 3Q22 and 2Q23 was 55 million yuan, while that of 3Q22 and 2Q23 was-5.58 yuan and-476 million yuan respectively. We estimate that after excluding the effect of exchange loss and premium, the net profit of homing is 37 million yuan, while that of 3Q22 and 2Q23 is-406 million yuan and-306 million yuan respectively.
3Q23 entered the peak season, operating data continued to repair; unit RPK passenger revenue was the same as the same period in 2019. 3Q23's ASK and RPK returned to 109% and 106% of the same period in 2019, respectively, increasing 7ppt and 8ppt compared with the same period in 2019. The occupancy rate was 80.1%, a decline in 3ppt compared with the same period in 2019.
3Q23 company unit RPK passenger transport revenue (including institutional capacity purchase income) is 0.63 yuan, which is basically the same as 3Q19, we estimate that individual customer air ticket prices may achieve a certain increase.
Operating costs per unit of ASK fell sharply. The operating cost of the company's 3Q23 unit ASK was 0.45 yuan, down 32% from the same period last year and 4% from the previous month. In terms of aviation fuel cost, 3Q23 domestic aviation kerosene factory average price fell 25% year-on-year, month-on-month increase of 7%; with the company's aircraft utilization increased, we believe that the unit non-oil cost has decreased compared with the month-on-month.
Trend of development
We expect 4Q23 to make a loss after excluding foreign exchange gains and losses. We mainly assume that 1) the company's ASK achieves a high unit growth compared with 2019; 2) the occupancy rate is slightly lower than the level of the same period in 2019, and the corresponding passenger kilometer income of individual customers is slightly higher than that in the same period in 2019; 3) according to the view of CICC bulk Group, we assume that the Brent oil price is 90 US dollars per barrel in the fourth quarter, and the unit non-oil cost is slightly higher than that of 3Q23. 4) according to the budget plan for subsidies related to the Civil Aviation Development Fund issued by the Civil Aviation Administration in 2024, we assume that the company confirms 145 million yuan in regional subsidies this year (175 million yuan in vs last year).
Profit forecast and valuation
We reduced the net profit by 2023 and 2024 to-831 million yuan and 631 million yuan (original value-329 million yuan, 759 million yuan), mainly due to the upward adjustment of Brent oil price hypothesis, the downward adjustment of CAA regional subsidy hypothesis and the 2024 capacity growth hypothesis. Maintain an outperform industry rating, with the current share price corresponding to 13.3 times 2024 p / e. We cut our target price by 16% to 8.7 yuan, which is 33% higher than the current share price, corresponding to 18 times 2024 price-to-earnings ratio. It is recommended to continue to pay attention to the progress of the company's capacity repair and the improvement of aircraft utilization.
Risk
The recovery of capacity was less than expected, the renminbi depreciated sharply against the dollar, and oil prices rose sharply.