Key points of investment
Incident: On April 29, 2024, Hainan Airport released its 2024 quarterly report. 2024Q1 achieved revenue of 1,193 billion yuan, -5.28% year over year; net profit to mother of 219 million yuan, -5.97% year on year; net profit after deducting non-return to mother 119 million yuan, or -39.71% year on year.
Performance was lower than expected: Q1 revenue declined year-on-year, mainly due to the year-on-year decline in carry-over revenue from the company's real estate business. Q1 gross margin was 46.0%, -4.5 pct year on year. Operating costs increased year on year, and gross margin was under pressure. The three sales, management and finance rates were 21.1%, -3.5pct year over year; net interest rate to mother was 18.3%, -0.1pct year over year. The decline in net profit attributable to mother and net profit not attributable to mother was mainly due to a decline in gross margin, a year-on-year decline in investment income, and one-time confirmed interest on loans covered non-operating profit and loss.
Continue to promote the elimination of existing real estate: 2024Q1's real estate sales project signed an area of 15,500 square meters, or -46.9% year over year; contract amount was 262 million yuan, -47.3% year over year. Q1 The company's rental revenue from real estate rental was 127 million yuan, -15.7% year-on-year.
Travel to the island remains strong: According to monthly production and operation data disclosed by the company, the passenger throughput of Sanya Phoenix Airport from January to January 2024 was 214.69/204.54/2.031 million passengers, respectively, of which the January data reached a record high. Overall passenger throughput/take-off and landing at Sanya Airport in Q1 was 6.424,600 passengers/33,900 flights, respectively, +4%/-6% compared to the same period in 2019, and +4%/-1% compared to the same period in 2019, and tourism to the island remained high. In 2024, the company will focus on the main airport business. The company expects that Sanya Airport will add 5 new international routes, and a fifth air rights route and multiple flight routes.
Profit forecast and investment rating: After integrating into Hainan's state-owned assets, Hainan Airport began high-quality development and participated deeply in the construction of the Hainan Free Trade Port. It is expected that it will continue to enjoy the prosperity of Hainan's island travel and future commercial port policy dividends. Based on the latest financial data, the profit forecast for Hainan Airport was lowered. Net profit to the mother for 2024-2026 was 12.8/15.2/1.75 billion yuan, respectively (previous value was 14.6/18.1/2 billion yuan), corresponding to the PE valuation 32/27/23 times, maintaining the “gain” rating.
Risk warning: macroeconomic risks, risks that the construction of the Hainan Free Trade Port will fall short of expectations