Shanghai Airport released its 2023 Annual Report on March 29, 2024:
For the full year of 2023, the company achieved net profit of 934 million yuan and net profit of non-return to mother of 829 million yuan, turning a loss into a profit compared to 2022;
In 2023, Q4 achieved net profit of 437 million yuan and net profit of non-return to mother of 373 million yuan, an increase of 20% and 7%, respectively, over the 2023 Q3.
The civil aviation industry continued to recover in 2023. The Shanghai Airlines hub achieved restorative growth, the domestic market returned to pre-epidemic levels, the number of inbound and outbound passengers increased dramatically, the company's profit level increased steadily, the asset consolidation effect was obvious, and the overall business situation improved. The specific performance was as follows:
In 2023, passenger throughput and flight volume at Pudong Airport recovered to 72% and 85% respectively in the same period in 2019.
In 2023, Pudong Airport's passenger throughput was 54.48 million passengers, recovering to 72% of the same period in 2019, while domestic, international, and regional passenger throughput in China recovered to 101%, 39%, and 64% of the same period in 2019, respectively. The number of aircraft take-off and landing was 433,863, recovering to 85% in the same period in 2019. The number of domestic, international, and regional aircraft take-off and landing in China recovered to 110%, 54%, and 73% of the same period in 2019, respectively.
In 2023, passenger throughput and flight volume at Hongqiao Airport recovered to 93% and 98% respectively in the same period in 2019.
In 2023, the passenger throughput of Hongqiao Airport was 42.49 million passengers, recovering to 93% of the same period in 2019. Among them, domestic and overseas passenger throughput (including Hong Kong, Macao and Taiwan regions of China) recovered to 96% and 62% of the same period in 2019, respectively. The number of aircraft take-off and landing was 26,6812, recovering to 98% in the same period in 2019. Among them, the number of domestic and overseas aircraft take-off and landing (including Hong Kong, Macao and Taiwan regions of China) recovered to 100% and 78% of the same period in 2019, respectively.
The company's tax exempt contract revenue in 2023 was $1,788 billion. The company achieved tax-free revenue of 1,788 billion yuan in the full year of 2023. At the end of 2023, the company signed a new tax exemption agreement with Nisshang Shanghai, and it is expected that tax-free revenue flexibility will return in the future.
Profit forecast, valuation and investment rating: In 2024, the recovery of international routes accelerated. In February, the number of international passengers at Pudong Airport recovered to 82% of the same period in 2019, and the recovery rate hit a new high since January 2023. With the favorable visa-free policies of various countries, it is expected that the pace of recovery of international routes will further accelerate, driving the company's aviation revenue and non-aviation revenue to increase. We maintain our previous profit forecast for the company. We expect net profit to be 2,820/4.062 billion yuan for 2024-2025, and an additional profit forecast of 4.4 billion yuan for 2026. The corresponding P/E is 32.0X/22.2X/20.5X, respectively. Since the merger of Hongqiao and Pudong, the company's ability to integrate resources has been strengthened, resource allocation and collaboration capabilities have been continuously improved, and the recovery trend of international routes has been determined, maintaining a “buy” rating.
Risk warning: macroeconomic downside risk, risk of aviation and non-aviation business recovery falling short of expectations, risk of untimely updates of research information.