Event: China Youth Travel Service announced its 2023 annual results forecast. Net profit attributable to owners of the parent company is expected to be RMB 183.6034 million in 2023. Compared with the same period in 2022, it will turn a loss into a profit.
On New Year's Day '24, the tourist flow in the scenic area was impressive, and the outbound travel sector recovered in an orderly manner. During the 2024 New Year's Day holiday, the revenue of the company's Wuzhen Scenic Area increased 10% compared to 2019, the number of visitors recovered to about 80%, and the average tourist consumption increased by more than 30% compared to 2019. The revenue of Gubei Water Town Scenic Area increased 14% compared to 2019, the number of visitors increased 11%, and the average tourist consumption was basically the same as in 2019. In terms of outbound travel, with policy improvements and the recovery of outbound flight supply, the number of outbound travelers continues to rise. The China Institute of Tourism Research expects the number of inbound and outbound tourists and international travel revenue to exceed 264 million and 107 billion US dollars respectively in 2024. As of January 30, 24, outbound flights have recovered to 69.35% of the same period in '19. Flight supply continues to improve, and the pace of recovery in the company's outbound travel business sends a positive signal.
Shanshui Hotel terminated its listing, and its strategic positioning focused on integrated cultural tourism management. On October 30, 2023, Shanshui Hotel terminated its listing on the national SME share transfer system, which helps Shanshui Hotel to better concentrate on good management, reduce operating costs, and improve the efficiency of management decisions. Currently, Shanshui Hotel is positioned as a “pioneer of cultural tourism hotels in China” and is actively exploring the development path of cultural tourism integration in the hotel industry. Shanshui Hotel achieved operating income of 319 million yuan in the first three quarters of 2023. Net profit loss was drastically narrowed, and operating performance was effectively improved.
Investment advice: The company is expected to achieve revenue of 97.10/114.43/13.426 billion yuan in 2023-2025, net profit to mother of 1.84/4.73 billion yuan, corresponding PE of 43.6/16.9/13.8X, maintaining an “increase in holdings” rating.
Risk warning: Extreme climate affects passenger flow; project incubation falls short of expectations; industry competition intensifies.