Core views:
Shenzhen Airport released its 2024 quarterly report. 1Q24 reversed year-on-year losses: 1Q24 achieved operating income of 1,128 million yuan/yoy +24.45%; net profit to mother of 95 million yuan, loss of 108 million yuan in the same period of the previous year; net profit without return to mother of 70 million yuan, and loss of 135 million yuan for the same period last year.
Passenger and cargo throughput reached a record high in a single quarter, with 1Q revenue increasing by 220 million yuan year-on-year: According to the company's operating data announcement, the 1Q24 airport completed about 110,000 flight takes/yoy +21%, passenger throughput 15.57 million passengers/yoy +36%, and cargo and mail throughput of 410,000 tons/yoy +21%, all of which are historic single-quarter highs. With strong growth in business volume, 1Q24's revenue increased by 222 million yuan year-on-year.
Overall costs and expenses were stable, and the recovery in investment income helped reverse losses: the company's costs and expenses remained stable, with 1Q24 operating costs of 893 million yuan/yoy -0.61%. In addition, benefiting from the increase in investment income from the company's joint ventures, 1Q24's investment income increased by 0.3 billion yuan year-on-year, helping to reverse losses.
The Shenzhen-China Corridor is a new starting point, and shareholder returns are expected to show greater flexibility: According to CCTV reports, the Shenzhen-China Corridor will be opened to traffic in June '24, which will help raise the airport's radiated population base from nearly 35 million to about 50 million. In the long run, according to the “14th Five-Year Plan for Integrated Transportation in Shenzhen”, the airport's future terminal passenger throughput is expected to reach 100 million passengers. On the African aviation side, according to an announcement from Shenzhen Airport, in the advertising business, the company signed a new airport advertising media operation contract in 24 years. The advertising revenue is linked to actual passenger traffic, and there is flexible space; in the commercial sector, the duty-free category structure continues to be optimized, and taxable businesses have formed a brand matrix with many big-name products. With increased passenger flow and consumer confidence, the commercial potential of Shenzhen Airport is expected to rise sharply in volume and price, and the flexibility of the non-aviation business is worth looking forward to.
Profit forecast and investment advice: The company's net profit for 24-26 is estimated at 4.37, 6.39, and 756 million yuan. Based on DCF model estimates, the reasonable value of the company remains unchanged at 8.23 yuan/share, corresponding to PE of 39X and 26X in 24 and 25, respectively, maintaining an “increase in holdings” rating.
Risk warning: economic fluctuations; public health events; policy changes; infrastructure progress falling short of expectations, etc.