Core views:
Jiuhua Tourism operates many core assets within the Jiuhua Mountain Scenic Area and lays out multiple links in the tourism industry chain.
Jiuhua Mountain is a famous Buddhist mountain integrating natural scenery and cultural heritage. According to the company's financial report, the company operates the Tiantai Ropeway, Baisui Palace Cable Car, and Huatai Ropeway. It has 3 hotels within the scenic area and 4 hotels outside the scenic area, and has 6 travel agencies and passenger transport franchises within the Jiuhuashan Scenic Area. The business covers many links in the tourism industry chain, and all businesses occupy a dominant position in the Jiuhuashan tourism market.
The number of visitors to the Jiuhuashan Scenic Area has been recovering steadily, and demand for the Famous Mountains and Dachuan Scenic Area is still supported. According to the official website of Jiuhuashan Scenic Area, the number of visitors to the Jiuhuashan Scenic Area increased by 17% to 9.25 million in '23, returning to 82% of the same period in '19. On the demand side, according to Ai Media Consulting's official account, historical and cultural tours and natural landscape tours are the main travel themes for online travel platform users in the past year and the year ahead. We believe that famous mountain and river scenic spots that combine culture and nature are more in line with consumer needs. The strong recovery in passenger flow in 23 years did not only benefit from the release of compensatory demand after the epidemic; there is still room for continuous growth in the future.
Transportation improvements and new projects are expected to support future growth. In terms of traffic improvement, the Chihuang High Speed Rail is about to open. After opening, it will become a golden tourist route connecting many scenic spots; the expansion of Jiuhuashan Airport has created conditions for route encryption, and the coverage of the scenic area is expected to expand further to medium and remote regions.
In terms of new projects, the Wenzong Ancient Village Project and the Dajiuhua Hotel Business Building Renovation Project have already been completed and put into operation; the Jiuhuashan Transportation Transformation Center function upgrade project is about to be completed, which will optimize traffic and tourist experience in the scenic area; at the same time, the company is also proceeding with all preliminary work of the Lion Peak project in an orderly manner.
Profit forecast and investment advice: The company's revenue for 23-25 is expected to be 7.2/7.9/860 million yuan, respectively, with year-on-year growth rates of 117.8%/9.8%/8.0%, respectively, net profit due to mother of 1.7/2.0/ 220 million yuan, turning a loss into a profit in '23, and a year-on-year growth rate of 14.7%/11.5%, respectively. Considering that the company relies on scarce famous Buddhist mountains, has abundant high-quality assets, future transportation improvements and new project construction to help growth, and is expected to benefit from temple theme tours. The company was given a PE valuation of 20 times in 2024, with a corresponding reasonable value of 36.20 yuan/share. The first coverage gave it a “buy” rating.
Risk warning: risk of macroeconomic fluctuations, risk of natural disasters and bad weather, risk that the construction progress or operation results of new projects fall short of expectations.