Introduction to this report:
The two towns are still in the restoration phase, and the short-term slope of the new guest room and hotel business in the scenic area project has been hampered.
Key points of investment:
The investment proposal takes into account the pressure on surrounding tourism and the impact of new climbing projects, and lowered the 2024-2026 EPS forecast to 0.45 (-18%) /0.56 (-8%) /0.62 (-16%) yuan, respectively. Considering the industry average 25x PE, and considering that the two towns still have room for restoration and new project performance to be released, the company was given 29xPE, and the target price was lowered by 13 (-7%) yuan.
Performance summary: 24Q1 achieved revenue of 1,922 million yuan/ +16%, recovering to 76% in '19, gross profit of 397 million yuan/ +3%, recovering to 65% in '19, gross profit margin of 20.65% /-2.53pct, tax and additional/sales/management/R&D/finance expenses ratio year-on-year -0.73/+1.39/-1.35/-0.05/-0.79pct, net profit loss of 0.29 million yuan to mother for the same period last year. 0.07 billion yuan.
The two towns are still in the restoration phase, and the new project is still climbing. By business sector, Wuzhen received 1.4794 million visitors/ +16%, revenue 357 million yuan/ +7.93%, but net profit declined year-on-year due to increased investment in employees, hotel rooms, etc.; Gubei Water Town received 183,000 visitors/ -26.38%, revenue 112 million yuan/ -32.16%; China Youth Expo Joint's revenue was 322 million yuan/ +35.03%. Travel agency business revenue grew year-on-year, and net profit remained flat year on year; net profit remained flat year on year when Shanshui Hotel's revenue declined, and Chuangge Technology's net revenue fell slightly year on year. The profit is the same Comparatively flat.
The new guest rooms and hotel business in the scenic area were hampered by short-term climbing. The decline in profits is mainly due to the impact of the scenic area business. Among them, new guest rooms in Wuzhen were affected by increases in labor, discount, and operating expenses, which are expected to improve in the second and third quarter; the opening of the Embankment Resort during May 23 brought an increase in discounts and marketing costs; the impact on sectors other than scenic spots was relatively small.
Risk warning: Competition in the industry is intensifying, transportation costs are rising, and the recovery of surrounding tourism is slow.