occurrences
On February 1, 2024, the company announced its 23-year performance forecast. It is expected to achieve a year-on-year increase of no less than 15% year-on-year in tourism operation in 23 and no less than 25% year-on-year increase over 19. Net profit to mother is expected to be no less than 270 million yuan, reversing the year-on-year loss.
reviews
Q4 With the opening of the Taicang project, the company's ice and snow tour layout was continuously improved, and short-term one-time start-up fees affected the results in the second half of the year. On November 8, 2023, the company opened the Taicang Alps International Resort. The project is positioned as a high-end one-stop ice and snow themed city resort, with an excellent location (close to Taicang South Railway Station and Shanghai's Jiading District, 1 hour by car from downtown Shanghai), including a ski resort, an ice and snow park, Club Med Mediterranean Day Ark Taicang Resort, Alps Time Scene, Alps Camp, and the World of Light and Shadow. The total construction area of Snow World is 910,000 square meters, making it currently the largest indoor ski resort in East China. Passenger traffic is gradually climbing. During New Year's Day, Alps Snow World had an average daily passenger traffic of 3,000, and since December, the number of visitors on weekdays was about 1,500. According to the annual performance forecast data, the net profit of 2H23 is expected to be no less than -202 million yuan. The loss estimate for the second half of the year is related to the Taicang project starting about 1 month later than planned, high one-time start-up costs after Taicang opened, and sales of the real estate business falling short of expectations.
The main cultural tourism industry continues to perform well on New Year's Day, and we look forward to the arrival of the peak season of the Spring Festival. According to the company's official public account data, the total turnover of Club Med China Resort on New Year's Day in '24 was +154% over the New Year's Day holiday in '23 and +84% over the same period in '19, with an average occupancy rate of 85%. Among them, the three ice and snow resorts in Beidahu, Yabuli, and Changbaishan had an average occupancy rate of over 95% from December 29 to 31, and the four resorts in Xianlin, Taicang, Anji, and Yanqing approached or filled their rooms on December 30 and 31. Atlantis Sanya's turnover during New Year's Day '24 was +12% compared to New Year's Day '23 and +12% compared to New Year's Day '19, reaching the highest turnover on New Year's Day since opening. OCC was around 94%. We believe that the company's high-end resorts have strong operational capabilities and are rich in snow and ice tours, island tours, and tours around the city, which can meet different types of needs. We expect their performance to continue to be impressive during the Spring Festival season in '24.
Profit Forecasts, Valuations, and Ratings
The world's leading high-end vacation company, with stocks in Sanya Yate and CM with excellent quality, contributed to increased performance after the opening of the new Taicang project. The net profit from 23E to 25E is estimated at 2.7/3.9/550 million yuan, and the adjusted EBITDA is estimated at 32.8/34.0/3.59 billion yuan. The corresponding EV/EBITDA valuation is 7.8/7.5/7.1 times, maintaining the “buy” rating.
Risk warning
Real estate sales fell short of expectations, risk of exchange rate fluctuations, and asset-light progress fell short of expectations.