Event description

The company released three-quarter report in 2023, with revenue of 2.053 billion yuan (+ 647.46%), 21.41% for the same period in 2019; net profit of 14 million yuan (+ 110.72%), net loss of 132 million yuan for the same period last year, 12.32% for the same period in 2019; net profit of 10 million yuan (+ 107.56%), 9.62% for the same period in 2019; EPS0.01 yuan. Among them, 2023Q3 realized revenue of 1.261 billion yuan (+ 748.28%), net profit of 49 million yuan (+ 195.51%), and non-return net profit of 47 million yuan (+ 191.06%), an increase of 99 million yuan over the same period last year.

Event comment

The substantial improvement in the company's operation during the period is due to the gradual recovery of the main outbound tourism business. From the second quarter, the company's results began to show a sharp recovery, 2023Q2 achieved its first quarterly profit in three years.

Benefiting from the recovery of the list of the third batch of outbound countries and regions, the summer peak season accelerated the recovery of the tourism market, the continuous improvement of the prosperity of the industry led to the continuous improvement of the company's performance, and 2023Q1-3 turned its net profit from losses to profits. In the fourth quarter, the company mainly launched ice and snow products and anti-season products, including route products from Nordic countries such as Iceland, Norway and Finland, and superimposed warm destination tourism products such as migratory bird routes to offset the impact of the off-season on the company's performance.

The company's 2023Q1-3 gross profit margin is 11.52% (- 3.27pct) and net profit rate is 0.61% (- 59.29pct).

The overall expense rate is 11.41% (- 62.22pct), of which the sales expense rate is 7.17% (- 32.62pct), the management expense rate is 3.63% (- 17.26pct), and the financial expense rate is 0.61% (- 12.34pct). The net cash flow of operating activities is 111 million yuan (+ 140.29%). Of these, 2023Q3 gross profit margin is 11.84% (- 2.9pct) and net profit margin is 4% (+ 48.95pct). The overall expense rate is 7.87% (- 38.16pct), of which the sales expense rate is 4.81% (- 20.94pct), the management expense rate is 2.37% (- 12.99pct), and the financial expense rate is 0.69% (- 4.23pct).

Investment suggestion

The capacity of international routes continued to increase during the year, and the overall outbound travel market has basically recovered to 51% in the same period in 2019. As a leading supplier of outbound travel wholesale and retail, the company is expected to take the lead in undertaking outbound demand. We estimate that the EPS of the company in 2023-2025 is 0.040.260.48RMB, corresponding to the closing price of the company on October 30th 6.84RMB, and the PE in 2023-2025is 154.8\ 26.514.4 times respectively, maintaining the "overweight-B" rating.

Risk hint

The recovery of household consumption is not as expected; the risk of immigration policy change; the risk of market competition.