Core view: The company's annual report performance for the year 23 is in line with expectations. It promotes a dividend plan of 3.50 yuan (tax included) for every 10 shares. The Spring Festival data for '24 is relatively good, and the prosperity continues to be verified.
Adjust profit forecasts and maintain an “gain” rating. The company achieved revenue of 799 million yuan in 23, a record high since listing, and achieved net profit of 227 million yuan to mother in '23, which is also a record high since listing. The company introduced a dividend plan of 3.5 yuan (tax included) for every 10 shares in '23. The dividend rate was 3.68% based on the closing price of 9.5 yuan on March 11, '24. Overall, the ropeway business is still the company's core source of profit, but the number of people on the company's three ropeways is slightly different from our previous forecast. According to the previous forecast adjusted for the number of riders on the three ropeways in 23, the company's net profit for 24/25/26 is estimated to be 2.72/3.09/337 million yuan, respectively (previously forecast net profit to mother of 2.82/297 million yuan in 24/25), corresponding to PE 19.4/17.1/15.6x, maintaining the “increase in holdings” rating.
In terms of ropeway business, pay attention to the increase in the number of people on the Spruce Ping/Yak Niu Ping ropeway. In '23, the company's three ropeways received a total of 6.1211 million visitors, an increase of 215.67% over the previous year. Among them, the Hikawa Park Ropeway received 3.1622 million visitors, an increase of 143.20% year on year; the Yunshanping Ropeway received 2.5774 million visitors, an increase of 346.89% year on year; and Yakniuping Ropeway received 381,500 visitors, an increase of 514.46% year on year. Spruce Ping/Yak Niuping is also a core attraction in the Yulong Snow Mountain Scenic Area in Lijiang, and the visitor base is relatively low. It is expected to continue to handle the passenger flow that cannot be handled because Glacier Park's reception capacity is close to the upper limit. It is recommended to continue to monitor the increase in the number of people on the Yunshanping/Yakniuping Ropeway.
In terms of the hotel business, we will continue to pay attention to the future profit situation of Lijiang Hefu Hotel Company. The most important Lijiang Hefu Hotel Company in the company's hotel business (including Intercontinental Hotel, Indigo Hotel, Gucheng Rishi Hotel, 5596 Shopping Street, and Rishi Mountain Residence) has been profitable for 23 years, which is a welcome sign. Lijiang Hefu Hotel Company achieved operating income of 14753 in '23.
770,000 yuan, achieving net profit of 3.6834 million yuan. Hefu Hotel's revenue has successfully crossed the break-even point. It is recommended to continue to monitor future profit conditions, which may bring good incremental results to the company.
Expense control is good, and the management expense ratio and sales expense ratio are in line with expectations. The company's management expense ratio for 23 years was 15.42%, the sales expense ratio was 3.36%, the management expense ratio decreased by 3.43 pcts compared to '19, and the sales expense ratio decreased by 6.15 pcts compared to '19, and the cost control was good.
Lijiang Co., Ltd. saw a high increase in Spring Festival data in '24, and the boom continues to be verified, and attention is being paid to the implementation of new projects. The Spring Festival data of Lijiang Co., Ltd. continued to verify the boom in '24. In terms of ropeway business, the three ropeways received a total of 191,300 visitors, an increase of 48.02% over the Spring Festival in '23. In terms of performance business, I am impressed that Lijiang received 63,500 visitors, an increase of 67.41 percent over the previous year. Over the past 24 years, we have continued to monitor the implementation of new projects, including projects such as the Lugu Lake Indigo Hotel, the Yak Niuping Tourist Ropeway renovation and expansion, and the Lugu Lake Performing Arts Theatre.
Risk warning: (1) the risk of natural disasters; (2) the risk of a change in control; (3) the risk that the hotel will not be profitable.