Spring Airlines announced its 2023 earnings pre-profit announcement on January 30, 2024:
The company expects net profit attributable to mother for 2023 to be between 2.1 billion yuan and 2.4 billion yuan, a loss of 51-5.4 billion yuan compared to the same period in 2022; net profit without deducted income for 2023 is between 2 billion yuan and 2.35 billion yuan, a loss of 52-5.5 billion yuan compared to the same period in 2022.
The company achieved net profit of 2,677 billion yuan in the first three quarters of 2023, and the estimated net loss due to mother was 280 million yuan to 580 million yuan in the fourth quarter of 2023; in the first three quarters of 2023, the company achieved net profit deducted from mother of 2,574 million yuan, and estimated that the company's net loss after deduction for the fourth quarter of 2023 was 220 million yuan to 570 million yuan.
The company turned a loss into a profit in 2023, and the full year's results are expected to reach a record high. As a leading low-cost airline, the company has outstanding advantages in refined control. In 2023, with the recovery of the civil aviation market, the company's main business improved dramatically. The specific performance is as follows:
Net increase of 5 aircraft. By the end of December 2023, the company operated 121 Airbus A320 series aircraft, an increase of 5 aircraft over the end of 2022.
Domestic business data increased significantly compared to 2019, leading the industry in passenger occupancy levels. Throughout 2023, the company's ASK and RPK recovered to 109% and 107% respectively in the same period in 2019. ASK and RPK in China recovered to 147% and 144% respectively in the same period in 2019, international ASK and RPK recovered to 40% and 37% respectively in the same period in 2019, and regional ASK and RPK recovered to 43% and 45% respectively in the same period in 2019. Domestic business data increased significantly compared to 2019. In terms of occupancy rate, the company's average occupancy rate in 2023 was 89.39%, only lower than 1.42pct in 2019, leading the industry in terms of occupancy rate.
Profit forecast, valuation and investment rating: As a low-cost airline leader, the company bucked the trend and expanded during the pandemic, and its fleet and daily growth rate were higher than the industry average. In 2023, when international routes were not fully restored, profits reached a record high. We believe that with the continuous restoration of international routes, the industry's supply and demand pattern will continue to improve, the tight supply balance is prominent, and the company is expected to increase revenue and profit. Considering that the company will gradually pay income tax normally after making a profit, we adjusted the company's profit forecast for 2023-2025 to 23/34/43 (previous value was 28/37/5.1 billion yuan), and the corresponding P/E is 23.1X/15.5X/12.3X, respectively, maintaining the “buy” rating
Risk warning: macroeconomic downside risk, oil price increase risk.