Core views:
Juneyao Airlines released its 2023 annual report: the company's annual revenue was 201 billion yuan/yoy +145%; net profit attributable to mother/net profit after deduction was 751 million yuan/726 million yuan, respectively, turning a year-on-year loss into a profit.
The business recovery process led the way, with revenue growth of 11.9 billion yuan year-on-year in '23. Along with the recovery in travel demand, the company's business volume recovered rapidly in '23, and transported 24.64 million passengers throughout '23, which is about 112% of '19. The company's revenue increased by 11.9 billion yuan to 201 billion yuan year on year, of which passenger revenue increased by about 12 billion yuan year on year, corresponding to RASK about 0.41 yuan, which is equivalent to 103% in '19.
CASK fell 25% year over year, and the narrowing of exchange losses helped reverse losses throughout the year. On the cost side, the average annual settlement price of Brent crude oil futures in '23 fell 17% year on year. Combined with the increase in fleet turnover and the company's efforts to achieve an optimal cost structure, Juneyao Airlines CASK was 0.36 yuan/yoy -25% in '23. In terms of expenses, benefiting from the narrowing of exchange losses, the company's financial expenses fell by 575 million yuan year-on-year in '23, helping to turn losses into profits for the whole year.
Dual brand full track layout, looking forward to the release of flexibility. The company lays out a comprehensive range of full-service and low-cost tracks through the Jixiang and Jiuyuan brands. Before the pandemic, the company was in the early stages of cultivating wide-body machines, and multiple adverse factors dragged down performance. However, through continuous accumulation of experience and growth momentum over the past three years, the 787 series has become an important driving force for the company to explore the market, and has successively developed remote intercontinental routes to Athens, Milan, and Helsinki. Benefiting from a sharp rise in volume and price in the third quarter of 2023, the company has broken its record for the highest profit in a single quarter. Currently, the daily utilization rate and profit level of the company's overall fleet continue to recover, and the level of business recovery is leading in the industry. Waiting for the cycle to rise and supply and demand to reverse, performance flexibility can be expected.
Profit forecasting and investment advice. The company's net profit for 24-26 is estimated to be 2.2, 30, and 3.4 billion yuan. Referring to the company's 15-19 valuation center and peer company levels, the 24-year PE17X is given, corresponding to a reasonable value of 16.66 yuan/share, which is covered for the first time to give a “gain” rating.
Risk warning: economic fluctuations; major policy changes; increased competition; cost control falls short of expectations.