Introduction to this report:
The termination of the transfer of wholly-owned subsidiaries due to changes in regulatory and operating conditions is not expected to affect performance in 2023 and will benefit from the gradual easing of outbound travel bottlenecks and the gradual increase in passenger flow.
Key points of investment:
Increase in holdings. Considering the recovery situation in 2023/24/25, the 2023/24/25 EPS was lowered to 0.03/0.20/0.30 (-0.07/-0.08/-0.15) yuan, and the average valuation of the travel agency industry in 2025 was 13xPE. Considering that outbound travel is expected to return to normal in 2025, and the company is expected to enjoy improvements in supply and demand after a sharp exit from the industry, the company is expected to enjoy improvements in supply and demand, giving 2025 higher than the industry average of 32xPE and maintaining the target price of 9.70 yuan.
Incident: The company announced that it will terminate the transfer process of China Enterprise Credit Commercial Factoring, China Enterprise Credit Leasing, and Guangzhou Premium Loan held by the company and its wholly-owned subsidiaries. It will also refund 130 million yuan of equity transfer funds previously collected in advance. At the same time, the three subsidiaries will stop starting new business from now on, and begin transfer and settlement procedures for existing claims.
Regulatory changes, operating policy, and environmental changes were the core reason for the termination of the transaction. ① At the launch stage of this transaction plan, the company is adjusting its own business and focusing on decisions in the context of the core travel business; ② The target company's business of the transfer mainly involves the industrial chain and Internet finance related business. Due to changes in the Internet finance industry regulatory policy, the transaction has been slow to obtain permission from the relevant authorities, so the transaction took a long time. ③ It is expected that the termination of the transaction will not affect the company's performance in 2023.
Demand for outbound travel is gradually picking up, and the easing of capacity visa bottlenecks is expected to accelerate volume. ① The company's three-quarter report is in line with previous forecasts, and the rapid release of domestic and outbound travel demand during the peak season has driven a marked recovery in performance; ② Considering the rise in air tickets and overseas hotel prices, the current share of outbound travel revenue is still higher than that of the domestic travel business. ③ The core bottlenecks of outbound travel at this stage are transportation capacity and visas. It is expected that with the gradual easing of the above delays, outbound travel business is expected to resume at an accelerated pace.
Risk warning: Economic fluctuations affect demand, organizational structure integration, and efficiency improvements fall short of expectations.