Introduction to this report:

The revenue side is being dragged down by the weather, and the profit side is affected by the decline in the number of valid tickets and short-term losses at newly opened restaurants and hotels. Focus on new projects and traffic improvements.

Key points of investment:

Investment suggestions Under the trend of affordable travel, traditional scenic spots maintain higher resilience, maintain the company's 2024-2026 EPS forecast of 0.66/0.72/0.77 yuan, maintain a target price of 16.6 yuan, and maintain an increase in holdings rating.

Performance summary: The company achieved revenue of 337 million yuan/ -0.42% in 24Q1, recovering to 127% in 2019, recovering to 117% in 2019, gross profit margin of 39.47%/-8.28pct, tax and additional/sales/management/R&D/finance expense ratios +0.57/+0.53/-0.39/+0.15/-0.08pct, net profit to mother of 0.26 million yuan/ -61%, recovering to 108% in 19, profit margin 7.58 %, -11.53 pct year on year; deducted not returning to mother of 122 million yuan/ -63%, recovered to 95% in 2019, profit margin 6.67%, -11.17% year over year.

The performance was slightly lower than expected: the decline in revenue was mainly due to a slight decline in passenger flow in Huangshan in the first quarter, with 827,200 visitors falling 2.12% year on year, and torrential rain after the Spring Festival; the decline in gross margin was mainly due to the implementation of the free ticket policy in March 23, so the number of actual tickets valid for 24Q1 decreased year on year. Furthermore, the opening of 7 new Huishang hometown stores and the new Taipinghu Hotel brought about a year-on-year increase in costs. In addition, income tax expenses increased year on year.

Later, focus on new projects and traffic improvements: ① The opening of the Chihuangshan High Speed Rail in June 2024 will promote passenger flow between Jiuhuashan and Huangshan, and will also drive the connection to the East China market. The completion of the Ningxuanhuang High Speed Rail is expected to drive passenger flow in Nanjing; ② the tourism service business led by Tuma Technology is growing rapidly; ③ the construction of the second phase of the Donghuangshan Project is progressing according to plan. Furthermore, Huicai stores are expected to accelerate the increase in store expansion.

Risk warning: weak demand, extended subsidy concessions, economic recovery falls short of expectations