Main points of investment:
Event: spring Airlines announces third-quarter results for 2023. The operating income of Spring and Autumn Airlines 23Q3 was 6.07 billion yuan, with a net profit of 1.84 billion yuan in 19 years compared with the same period last year and 37.5% in the same period last year, significantly exceeding the pre-epidemic level. The net profit in the first three quarters was 2.68 billion yuan, reversing losses in 22 years compared with the same period last year, and the performance exceeded expectations.
Operation data: 2023Q3 summer travel demand is strong, Spring and Autumn Airlines operation data rebounded sharply. According to the company announcement, the overall ASK of the company's Q1-Q3 is + 11% year on year, and the overall RPK is + 8% year on year. The occupancy rate is-2.4 pcts compared with the same period in 19 years. Domestic: the domestic transport capacity demand of the company is higher than that before the epidemic. 2023Q3 domestic ASK returned to 155% of the same period in 2019; domestic RPK returned to 154% of the same period in 19 years; domestic occupancy rate was-0.99 pcts compared with 19 years; and domestic passenger volume returned to 143% of the same period in 19 years. International: the supply and demand of 2023Q3 overseas routes gradually recovered, and the company's ASK and occupancy rate rebounded sharply. The company's international ASK returned to 52% of the same period in 19 years; international RPK returned to 50% of that of the same period in 19 years; and the international passenger occupancy rate reached 82%. Compared with 19 years, the international passenger volume of-8.16 pcts; recovered to 55% of the same period in 19 years.
Fleet size: according to the company announcement, as of September 2023, the total fleet of Spring and Autumn Airlines reached 122, an increase of 39% compared with the same period in 19 years.
Financial data: profits in the first three quarters totaled 2.68 billion yuan, much higher than before the epidemic. Revenue-Spring Airlines 23Q3 operating income of 6.07 billion yuan, year-on-year + 37.5%, the first three quarters of revenue achieved a total of 14.1 billion yuan, 19 years + 21.9%; cost-Spring Airlines 23Q3 operating cost of 4.18 billion yuan, unit cost of 0.31 yuan, 19 years + 5.8%.
In the first three quarters, the operating cost totaled 11.14 billion yuan, with a unit cost of 0.31 yuan, which was + 5.9% over the same period last year. Profit-Spring Airlines 23Q3 achieved a net profit of 1.84 billion yuan, much higher than the level before the epidemic. The net profit was + 112.7% in 19 years compared with the same period last year. It made a total profit of 2.68 billion yuan in the first three quarters, reversing losses in 22 years.
Investment analysis opinion: the overall recovery of domestic demand this year is relatively fast, international routes are steadily recovering, and we continue to be optimistic about the improvement of the company's performance and the performance elasticity in the future supply and demand gap. The company's profitability is significantly ahead of the industry, and the low-cost advantage is highlighted. We have raised our 2023E-2025E profit forecast to 2.683 billion yuan 4109gamer 4.935 billion yuan (the original forecast is 1.876 billion yuan / 3.646 billion yuan / 4.347 billion yuan), corresponding to the current share price PE of 19xmem13x and 10x respectively, maintaining the "overweight" rating.
Risk hint: oil prices fluctuated sharply, macroeconomic growth was lower than expected, and subsidies fell more than expected.