Event: The company released the third quarterly report of 2023:1) 23Q1-3 The company realized revenue of 642 million yuan/+150.3%(year-on-year, the same below), net profit attributable to parent company of 212 million yuan/+695%, net profit deducted from non-parent company of 216 million yuan/+1989%; 2) 23Q3 Company realized revenue of 249 million yuan/+40.5%(year-on-year, the same below), net profit attributable to parent company of 91 million yuan/+13.3%, net profit deducted from non-parent company of 91 million yuan/+29.2%. 3) 23Q1-3 Operating cash flow of the Company is RMB 361 million/+174%.
Comments:
The decline in gross profit margin was mainly affected by the business structure, and the expense ratio improved significantly. From the perspective of gross profit, the gross profit margin of 23Q3 Company is 62.3%/-2.5pct, which may be caused by the rapid growth of hotels and performances with low gross profit due to the limitation of bearing capacity of high-gross profit ropeway products. From the expense side, the sales/management/finance expense ratio in 23Q3 was 2.9%/13.6%/-0.6%, with year-on-year changes of-0.7pct/-1.1pct/0.2pct respectively, and the expense ratio showed a downward trend as a whole. From the profit side, the net interest rate of 23Q3 parent company is 36.4%/-8.7pct, which is mainly due to the investment income brought by the disposal of equity of joint-stock companies and the enjoyment of tax preference in the same period last year.
The tourism market has improved and the number of tourists received has increased significantly. According to the business situation, 1) Cableway business: 23Q1 -3 Company received 4.825 million tourists/+193% in total (among which, Yulong Snow Mountain Cableway/Yunshanping Cableway/Yuniuping Cableway received 2.481 million tourists/2.0393 million tourists/304,700 tourists respectively,+131%/+297%/+429% respectively compared with the same period last year. With the increase of tourists in the scenic spot, medium/small ropeways take over the diversion of tourists.
2) Performance business: Impression Lijiang performed 569 performances in Q1-3, receiving 1,292,700 tourists/+393%, realizing revenue of 120 million yuan/+395.14%. In July, the Yulong Snow Mountain Ganhaizi Tourist Distribution Center project opposite Impression Lijiang Theater was put into trial operation, helping tourists in the scenic spot to transform into performances, which is expected to improve the operation efficiency of Impression Lijiang.
3) Hotel business: Lijiang Hefu Hotel realized revenue of 116 million yuan/+67%, and Diqing Shambhala Tourism Investment Co., Ltd. realized operating revenue of 30 million yuan/+69%.
Company highlights: 1) Yunnan tourism market fundamentals improved. 2) During the epidemic period, the Company actively promoted the Lugu Lake Mosuo Town Project and accelerated the development and construction of the project in September this year. The project is expected to gradually produce benefits in the next 3-5 years. 3) At present, the layout of Shangri-La Boutique Small Ring Road of the Company has been basically completed, and the in-depth experience package product of "hotel + on-site experience" has been launched to the market. In the future, the company will still anchor high-end tourism consumption and actively build Shangri-La eco-tourism circle.
Earnings forecast: We expect the company to achieve a net profit of 2.55/2.99/3.33 million yuan from 2023 to 25, and the closing price on October 24 corresponds to PE of 17/15/13 times respectively. We believe that tourism is still a traffic business in essence. The inherent IP value of Yunnan tourism and Lijiang tourism is expected to continue to increase the traffic viscosity, and the traffic restructuring is expected to directly affect the growth center of the scenic spot in the next long cycle. We are optimistic about the potential release of the tourism resources of the Great Shangri-La Ring Road.
Risk warning: macroeconomic recovery is less than expected, market competition intensifies, new project construction is less than expected.