The company announced its 2023 annual results forecast. In '23, the company expects to achieve net profit of 184 million yuan, a year-on-year loss of 517 million yuan; net profit after deducting non-return to mother of 143 million yuan, reversing a year-on-year loss of 561 million yuan. 23Q4 is expected to achieve net profit attributable to mother of -0.23 million yuan, a year-on-year reduction of 140 million yuan; net profit without return to mother of -51 million yuan, a year-on-year decrease of 183 million yuan. In '23, the company grasped the opportunities for cultural tourism market recovery, and overall business performance improved. Subsequent suggestions focused on the recovery of cross-border travel catalyzing the company's travel agency business and maintaining the purchase rating.
Key points to support ratings
The company's results in '23 turned a loss into a profit. In '23, the company expects to achieve net profit of 184 million yuan, a year-on-year loss of 517 million yuan; net profit after deducting non-return to mother of 143 million yuan, reversing a year-on-year loss of 561 million yuan. Among them, 23Q4 is expected to achieve net profit attributable to mother of -0.23 million yuan, a year-on-year reduction of 140 million yuan; net profit without return to mother of -51 million yuan, a year-on-year decrease of 183 million yuan.
Seize the recovery opportunities of the cultural tourism market and promote the full recovery of all major businesses. The scenic area sector is deeply cultivating unique resource endowments to maintain and consolidate the advantages of a comprehensive destination for leisure, vacation, and cultural exhibitions; the integrated marketing business focuses on strategic customers and projects to continue to maintain its leading edge in the exhibition industry; the travel agency sector adapts to market changes and takes more measures to promote a recovery in performance.
The scenic area sector is expected to maintain steady growth; cross-border travel policies continue to be catalyzed, and the travel agency sector can be expected to perform flexibly. 1) Domestic travel: Judging from the 2014 New Year's Day travel data, the number of domestic tourists and revenue recovery rates improved marginally, and the popularity of travel remains unabated. The company's resource endowments in Wuzhen and Gubei Water Town are of high quality and are expected to maintain steady growth. 2) Cross-border travel: Following mutual visa exemption between Malaysia and China at the end of '23, China has recently signed visa-free agreements with Singapore and Thailand. As a classic Southeast Asian travel route, “New Matai” is expected to usher in a wave of outbound travel during the Spring Festival. By the end of January, China had concluded mutual visa exemption agreements with 157 countries covering different types of passports, and had achieved full mutual exemption of visas with 22 countries. Currently, the visa-free effect is being released at an accelerated pace, international flights are also being resumed in an orderly manner. The convenience of cross-border travel is constantly increasing, and the desire for cross-border travel continues to heat up. The company's travel agency business is expected to benefit, and performance flexibility can be expected.
valuations
According to the company's performance forecast data, the Q4 performance was slightly lower than our previous expectations. We adjusted the company's EPS for 23-35 to 0.25/0.62/0.81 yuan, which is 40.5/16.6/12.7 times PE. In the medium to long term, the company's scenic spot business has grown steadily, the external environment of the travel agency business has improved markedly, performance flexibility can be expected, and the purchase rating has been maintained.
The main risks faced by ratings
Consumer demand fluctuates, market competition is fierce, and geopolitical factors are at risk.