Report summary:
China Youth Travel released its annual report. In 2023, the company achieved revenue of 9.635 billion yuan/ +50.15%/recovered to 69% of the same period in 2019, net profit to mother of 194 million yuan/year-on-year loss/recovered to 34% in 2019, and net profit after deducting non-return to mother 130 million yuan/year-on-year reversed/recovered to 30% in 2019. 2023Q4's quarterly revenue of 2.90 billion yuan/ +81%/recovered to 64% in the same period in 2019, net loss to mother of 12 million yuan/year-on-year loss narrowed, after deducting non-return net loss of 63 million yuan/year-on-year loss narrowing.
The scenic area business has recovered significantly, and Wuzhen's return to the lead boosted its annual performance. Wuzhen Company achieved revenue of 1,784 billion yuan/ +183.65% in 2023, and the operating revenue of the scenic area, excluding government subsidies and real estate business, recovered to 98% in 2019, with net profit of 284 million yuan/year-on-year reversing losses; Wuzhen received 7.72 million visitors throughout the year/+568%/recovered to 84% in 2019, including 2.27 million in Dongzha, 5.45 million in Xizha, and a customer unit price of 223 yuan/ -46%/+16% compared to 2019. Gubei Water Town achieved revenue of 735 million yuan/ +6.78%/recovered to 77% in 2019, turning a year-on-year loss into a profit (confirmed investment profit and loss of 1.13 million under the Equity Law); Gubei Water Town Scenic Area received 152.36/ +34.89% of visitors throughout the year/recovered to 64% in 2019, and the customer unit price was 482 yuan/ -21%/+21% compared to 2019.
The non-scenic area business is picking up steadily. The annual revenue of the integrated marketing business was 2,187 billion yuan/ +108.99%/recovered to 82% in 2019, and net profit of 44.52 million yuan/year-on-year reversed/recovered to 63% in 2019.
The hotel business achieved revenue of 410 million yuan/ +27.77%/recovered to 74% in 2019, a year-on-year loss of 39.44 million yuan. The travel agency business achieved revenue of 1,298 billion yuan/ +179.62%/recovered to 26% in 2019, with continuous product innovation and continuous improvement in operations. The strategic investment business continues to bring stable profit contributions to the company.
Investment advice: As a high-quality target with the resources of the two core scenic spots of Wuzhen and Gubei Water Town, the company ushered in a strong recovery against the backdrop of a steady recovery in the tourism market and travel agency customers, and the boom is expected to continue in 2024. The company's net profit for 2024-2026 is estimated to be 408/5.17/619 million yuan, respectively, maintaining a “buy” rating.
Risk warning: The recovery in passenger flow falls short of expectations, and the ticket price reduction policy is risky.