The current situation of the company
The company announced 3Q23 operations: 1-3Q23 tourism operating turnover (consistent exchange rate) increased by about 19.4% year-on-year to 14.2 billion yuan (vs. 1H23 increased by about 29.0% year-on-year), and unaudited return net profit turned from a loss to a profit. From a business point of view:
The turnover of Club Med:1-3Q23 (consistent exchange rate) increased by about 21.3% to 11.8 billion yuan over the same period last year and 16.8% over the same period of 19 years (vs. 1H23 increased by about 32.2% year-on-year and 19.6% over the same period of 19 years). 1-3Q23 capacity increased by about 6.7 per cent year-on-year to about 97.2 per cent in the same period in 19 years; the global average bed occupancy rate was about 63 per cent (year-on-year + 2ppt/ compared with the same period in 19 years-3ppt); and the average daily bed price increased by about 10 per cent year-on-year and 31.5 per cent over the same period in 19 years. Thanks to continued growth in Europe, Africa, the Middle East and the Americas and the strong recovery in the Asia-Pacific region, 1-3Q23 Club Med's unaudited net profit increased steadily compared with the same period in 22 and 19.
Sanya Atlantis and others: 1-3Q23 turnover increased by about 83.2% year-on-year to 1.368 billion yuan, corresponding to 3Q23 turnover increased by about 84.8% year-on-year to 481 million yuan. The average daily rate of 1-3Q23 rooms fell by about 5.8 per cent year-on-year (mainly due to an increase in the share of MICE business), while the average occupancy rate increased by about 40.6ppt to 85.1 per cent year-on-year. 1-3Q23 Lijiang Mediterranean International Resort operating business turnover increased by about 26.3% to 90 million yuan compared with the same period last year.
Comment
Focus on Club Med and art Q4 and recovery next year. As of 2023-10-7, Club Med recorded 2H23 cumulative bookings (consistent exchange rate turnover) of + 6% year-on-year and + 23% compared with the same period of 19 years; 1H24 cumulative bookings recorded + 22% of the same period last year and + 53% of the same period of 21 years; and the turnover of Chinese resorts during the Mid-Autumn Festival National Day holiday exceeded about 25% of the same period of 19 years, with an average occupancy rate of 90% 1. As the growth in Europe and the United States has stabilized since the beginning of this year, the company has further strengthened its market promotion in South America to make up for off-season sales in the snow season, and the Asia-Pacific region continues to recover. The turnover of Yat during the Mid-Autumn Festival National Day holiday is comparable to about 21% in the same period of 19 years, with an average occupancy rate of 90%. It is recommended to pay attention to the recovery trend of Club Med and art.
Pay attention to the new project market feedback. Nanjing Xianlin Project, as the world's first urban series of resorts, has opened at 10But 18, with a total of 220rooms, with an average house price of more than 1000 yuan, and equipped with water park, water screen light and shadow show, U BAR and other trendy facilities 2. The company expects the Taicang Alps International Resort 10Cang 28 to open, including Snow World (recreational snow / skiing area, ticket prices from 328pm 498 yuan in flat season and 398pm 698 yuan in peak season), Taicang city series resorts (a total of 307 rooms with an average house price of more than 1000 yuan) and Timeless (Phase I). It is recommended to pay attention to the market feedback of new products.
Profit forecast and valuation
Maintain profit forecasts for 2023 and 2024. The current share price is equivalent to 7 times EV/EBITDA in 24 years.
Maintain the outperform industry rating, taking into account a correction in sector valuations, lowering the target price by 18 per cent to HK $9.8, corresponding to 7.4 times EV/EBITDA in 24 years, with 42 per cent upside space.
Risk
Club Med Bali and Atlantis recovered less than expected; new project development climbed less than expected.