The company released its annual report for 2023, achieving revenue of 799 million yuan for the full year, +152%/+11% year on year 22/19, achieving net profit of 227 million yuan, +12% year on year 19, net profit of 235 million yuan after deducting net profit of non-return to mother, +16% year on year 19. Single 23Q4 achieved revenue of 157 million yuan and net profit to mother of 16 million yuan, -4%/-16% respectively compared with 19Q4.
By business, ropeway transportation/hotels/entertainment/catering/other achieved revenue of 3.87/1.88/1.37/0.33/0.54 billion yuan in 2023, +17%/+58%/-23%/-21%, respectively. The company's three ropeways received a total of 6.1211 million visitors throughout the year, +28% compared to 19. The gross margin of ropeway transportation/hotel/entertainment was 85%/26%/59%, respectively, compared to +4/-27/ -6pct in '19. The decline in hotel gross margin was mainly due to depreciation of the hotel cultural experience area of the Shangri-La Shambala Moonlight City project in accordance with accounting standards, but has not yet been opened to generate revenue.
Affected by the increase in the share of new businesses such as hotels, the company's comprehensive gross margin was 58.7% in '23, compared to -8.4 pct in '19. The cost side has been optimized. The sales/management expense ratio in '23 was 3.4%/15.4%, respectively, compared with -6.2/-3.4pct in '19, or 1) the efficiency of the company's sales expenses was optimized; 2) the number of employees was reduced by 4% compared to '19.
The company pays a cash dividend of 3.50 yuan (tax included) for every 10 shares. Previously (23H1), the company's dividend policy was 2.5 yuan for every 10 shares. This time, the dividend ratio increased significantly. The total cash dividend was 192 million yuan, or 84% of net profit to mother, corresponding to the current dividend rate of 3.68%. The company's net cash flow from operating activities at the end of 2023 was 405 million yuan and monetary capital of 622 million yuan, with strong payment guarantees.
Profit forecast and investment suggestions: We are optimistic about the sustainability of the demand driven boom in the scenic area industry. We are optimistic about the company's leading tourism position in northwest Yunnan. The company has high-quality tourism resources such as Yulong Snow Mountain, Shangri-La, and Lugu Lake in Lijiang. The improvement of surrounding traffic and supply optimization in the scenic area are driving long-term growth. We expect the company to achieve revenue of 886/9.64/1,049 million yuan in 2024-2026, yoy +11%/+9%, achieve net profit of 2.75/3.13/358 million yuan, yoy +21%/+14%. The PE corresponding to the current stock price is 19/17/15X, maintaining the “recommended” rating.
Risk warning: risk of macroeconomic fluctuations, risk of natural weather changes, risk of project construction falling short of expectations.