The company released its 23rd annual report and its quarterly report for '24: (1) The full year of '23: revenue of 720 million yuan, up 117.9%, up 34.7% from year 19; net profit to mother was 170 million yuan, which turned a loss into a profit (loss of 0.1 billion yuan in '22), up 49.2% from '19. (2) 23Q4: Revenue of 160 million yuan, up 116.2%, up 35.0% from 19Q4; net profit to mother of 0.2 billion yuan, turning a loss into a profit (22Q4 loss of 0.1 million yuan), up 133.1% from 19Q4. (3) 24Q1: Revenue of 180 million yuan, down 6.1%, up 34.7% from 19Q1; net profit to mother was 50 million yuan, down 15.8%, up 34.4% from 19Q1. (4) Dividend for 23 years: The company plans to pay a dividend of 0.79 yuan (tax included) per share, with a total dividend of 87.44 million yuan, accounting for 50.1% of the net profit to mother
Profitability and cost control capabilities are greater than before the pandemic. (1) 23 VS19 full year: gross margin increased 1.5pp to 49.6%, sales/management/finance expense ratios +0.1pp/ -0.1pp to 5.4%/13.0%/-0.2% year over year, respectively, and net profit margin increased 2.4 pp to 24.1% year over year, respectively. (2) 24Q1VS23Q1: Affected by the decline in revenue, gross margin decreased by 3.3pp to 54.7%, the period expense ratio increased by 0.3pp to 15.5%, and net profit margin decreased by 3.3pp to 28.9%.
The Lion Rock Cableway is expected to contribute to future growth. According to the company's investment announcement, the company plans to invest 330 million yuan to build the Lion Peak Ropeway. The construction period is 2 years, and the number of passengers is expected to increase by 224,000 in the first year (40% of the passenger flow at Lion Peak Scenic Area), and is expected to increase by 15% every year thereafter. Based on this assumption, the average annual revenue for 15 years is 110 million yuan, total annual profit of 50 million yuan, and an internal return of 9.5% after tax, corresponding investment payback period of about 12 years (including 2 years of construction period).
Profit forecasting and investment advice. Net profit due to mother for 24-26 is estimated to be 2.0, 220 million yuan, and 240 million yuan, respectively, up 15.0%, 11.1%, and 8.9%, respectively. Considering that the company relies on scarce famous Buddhist mountains, has abundant high-quality assets, future transportation improvements and new project construction to help growth, and is expected to benefit from temple theme tours, refer to comparable companies and give the company a PE valuation of 25 times in 24 years, corresponding to a reasonable value of 45.37 yuan/share, maintaining a “buy” rating.
Risk warning. The risk of macroeconomic fluctuations, natural disasters and bad weather risks, and the risk that the construction progress or operation results of new projects fall short of expectations.