Introduction to this report:
Passenger flow was pressured by the weather in the first quarter, and profits declined due to high operating leverage. Considering the opening of the Shanghai-Suhu High Speed Rail in June-July and the summer launch of the Pingqiao Rafting Project, it is expected that there will still be support.
Key points of investment:
Investment proposal: Considering the decline in the surrounding tourist flow, reduce the 2024-2025 forecast EPS to 0.9 (-15%) /1.09 (-11%) /1.16 yuan in 2026, consider the average industry valuation of 26xPE, consider the company's traffic improvements and room for new project expansion, give 28xPE, and lower the target price to 25.15 (-5%) yuan to maintain the increase rating.
Performance summary: The company achieved revenue of 630 million yuan/ +71% in '23, recovering to 125% in '19, gross profit of 343 million yuan/ +156%, recovering to 104% in '19, with gross profit margin of 54.34%, year-on-year -11pct, with net profit of 147 million yuan/ +624% in '19, recovering to 119% in '19, after deducting 140 million yuan/ +1024% of revenue in '19; recovering to 115% in '19; 24Q1 achieved revenue of 107 million yuan/ -11%, recovering to 120% in '19, and recovering to 120% in '19, and gross profit 41 million yuan/ -20%, recovered to 79% in '19, net profit due to mother was 111 million yuan/ -43%, recovered to 73% in '19, recovered to 73% in '19, after deducting 209 million yuan/ -45%, and recovered to 63% in '19.
Core projects gradually resumed, and the market started late due to weather effects in the first quarter. ① In 2023, revenue from Shanshuiyuan/Nanshan Zhuhai/Hotel/Hot Spring/Water World/Travel Agencies recovered to 109/108/216/89/80/ 71% in 2019; ② Projects affected by torrential rains in Southern China started late in the first quarter, and the profit side decline increased under high operating leverage. However, considering the opening of the Shanghai-Suhu High Speed Rail in June-July, it is expected that the opening of the Shanghai-Shanghai-Shanghai-Shanghai High Speed Rail Time+Pingqiao Rafting Project during the summer season is still expected to be supported.
The dividend rate is close to 68%, and dividends are actively rewarded to shareholders. The company plans to distribute cash of 0.536 yuan per share, with a total distribution of about 100 million yuan (tax included), accounting for 68% of the 23 year profit. At the same time, it plans to transfer 0.45 shares per share to all shareholders. After the transfer, the total share capital will increase from 190 million to 270 million shares.
Risk warning: Competition in the industry is intensifying, demand is weak, and efficiency improvements fall short of expectations.