occurrences
On October 24, 2023, the company announced operating data for the first three quarters, achieving a tourism operating turnover of 14.191 billion yuan/ +19.4% (growth rate at a constant exchange rate, same later). Net profit was converted from loss to profit year-on-year.
reviews
Club Med has benefited from a recovery in demand+high-end upgrades, and the reservation situation is good. Club Med's turnover in the first three quarters of 23 was 11.78 billion yuan/ +21.3%, compared to the same period in '19, +16.8%; capacity in the first three quarters recovered to 97.2% in the same period in '19, OCC was 63.0% /+2.0pct, a difference of 3.0 pct from the same period in '19. The average daily bed price was RMB 1,680/+10.0%, +31.5% over the same period in '19. Looking at volume and price splitting, the continuous product upgrades of companies on the price side and the growth driven by overseas inflation are even more significant. There is still room for a slight increase in occupancy rates compared to '19; looking at the market split, the European, African, Middle Eastern, and American markets continued to grow in '23, while Asia Pacific recovered strongly, and Club Med's profits continued to rise steadily compared to the same period in '22 and '19.
2023.10.7 Club Med recorded cumulative scheduled turnover for the second half of this year (2H23) +6% compared to the same period last year and +23% compared to the same period in '19. The cumulative scheduled turnover for the first half of next year (1H24) was +22% compared to the same period last year, with full scheduled orders.
Sanya Yate benefited from MICE demand and maintained a high occupancy rate, and Lijiang Resort performed well during the summer season. In the first three quarters of 23, Sanya Yate had a turnover of 1.37 billion yuan/ +83.2%, the number of visitors was about 4.9 million yuan/ +105.2%, ADR 2504 yuan/ -5.8%, and OCC 85.1% /+40.6pct. Benefiting from an increase in the MICE demand structure, the increase in occupancy rate was even more significant. In the first three quarters of 23, Lijiang Resort's turnover was about 90.2 million yuan/ +26.3%, and Q3 alone contributed 50.6 million yuan.
The performance of all business lines operating on the National Day Tour continues to be strong. On the 23rd National Day Club Med China OCC was over 90%, and the turnover was over 25% according to a comparable scale (2023.9.29-10.5 seven days compared to 2019.10.1 to 10.7 seven days). Among them, the long-distance Lijiang and Guilin resorts OCC exceeded 94%, the short-distance Joyview Middle Gold Coast Resort was over 97%, and both Anji and Yanqing were fully booked for 4 consecutive days, reflecting the popularity of long-term and surrounding tours. During the National Day of Sanya Yate, the OCC reached 90%, and the turnover was comparable to 21% in 19 years.
Profit Forecasts, Valuations, and Ratings
The world's leading high-end resort, Club Med continues to be upgraded, Sanya Ya has excellent quality, and profit flexibility has been unleashed as business data continues to pick up. A new Q4 Taicang Ski Resort project will open, while focusing on a catalyst for increasing favorable real estate policies in the future. The estimated net profit for 23E to 25E is 4.7/66/950 million yuan, and the adjusted EBITDA is estimated to be 35.4/37.5/3.97 billion yuan. The corresponding EV/EBITDA valuation is 11.9/8.1/7.7 times, maintaining the “buy” rating.
Risk warning
Real estate sales fall short of expectations, risk of rising labor costs, risk of exchange rate fluctuations.