Incident: China Youth Travel Service released its 2023 Annual Report. In 2023, it achieved operating income of 9.635 billion yuan, a year-on-year increase of 50.15%; net profit of 194 million yuan, loss of 334 million yuan in the same period last year; and basic earnings per share of 0.27 yuan. The company plans to distribute a cash dividend of 0.85 yuan for every 10 shares.
The tourist traffic performance in the scenic area was impressive in 2023, and the travel agency sector recovered in an orderly manner. The scenic area sector maintained steady growth. In 2023, Wuzhen Scenic Area received a total of 7.72.07 million visitors, up 568% year on year. Among them, Dongzha Scenic Area received 2.2742 million visitors, an increase of 1309.92% year on year, and Xizha Scenic Area received 5.4464 million visitors, an increase of 447.65% year on year. Wuzhen Company achieved revenue of 1,784 billion yuan, a year-on-year increase of 183.65%; achieved net profit of 284 million yuan, and a steady recovery in business performance. In 2023, the Gubei Water Town Scenic Area received a total of 1,523,600 visitors, an increase of 34.89% year on year, and achieved operating income of 735 million yuan, an increase of 6.78% year on year. The operating performance achieved profit, which was a significant improvement over 2022. Cross-border travel policies continued to be catalyzed, and the travel agency sector recovered in an orderly manner, achieving revenue of 1,298 billion yuan, an increase of 179.62% over the previous year, and the business situation continued to improve.
In addition, the overall operating performance of integrated marketing picked up, with annual revenue of 2.887 billion yuan, an increase of 108.99% over the previous year; net profit of 44.532 million yuan, turning a year-on-year loss into a profit.
Shanshui Hotel terminated its listing, and the strategic repositioning focused on integrated management of cultural tourism. On October 30, 2023, Shanshui Hotel terminated its listing on the national SME share transfer system, which helped Shanshui Hotel to better concentrate on good management, reduce operating costs, and improve the efficiency of management decisions. Currently, Shanshui Hotel is positioned as a “pioneer of cultural tourism hotels in China” and is actively exploring the development path of cultural tourism integration in the hotel industry. In 2023, Shanshui Hotel achieved revenue of 410 million yuan, an increase of 27.77% over the previous year, a loss of 39.4417 million yuan compared to 2022, but it has not yet reversed its losses.
Investment advice: The company is expected to achieve operating income of 109.71/127.87/13.867 billion yuan in 2024-2026 and net profit to mother of 351/5.52/654 million yuan, corresponding to 22.6/14.3/12.1 times PE, maintaining an “increase in holdings” rating.
Risk warning: Extreme weather affects scenic spot operations; outbound travel restoration falls short of expectations; industry competition intensifies.