Event: The company announced its annual results for '23 and the operating announcement for the first quarter of '24. (1) Year 23: Tourism operating turnover recorded 18.13 billion yuan/yoy +19%, compared with 2019; revenue side, 17.15 billion yuan/yoy +24%, of which property sales contribution fell below 7%; profit side achieved adjusted EBITDA of 3.73 billion yuan/yoy +59%; net profit of 310 million yuan/yoy +156% turned loss into profit. (2) 24Q1: The company recorded a tourism operating turnover of 7.16 billion yuan/yoy +15.8%; unaudited net profit to mother increased steadily over the same period in '23.

Club Med and others: (1) Performance: Club Med recorded a turnover of 15.12 billion yuan/yoy +19% in '23, +18% compared to '19; adjusted EBITDA of 3.21 billion yuan/yoy +47%, continuing to develop into the high-end market in an environment of high inflation. Among them, sales in the Americas (12 resorts) were +24% compared to '22, +63% compared to '19; Asia Pacific (21 resorts) had revenue +96% compared to '22, +2% compared to '19; and Europe, Africa, and the Middle East (35 resorts) had +7% revenue compared to '22, +11% compared to '19.

(2) Key indicators: Club Med's average daily bed price in '23 was 1,681 yuan (based on consistent exchange rates) /yoy +9%, +31% compared to '19; the global average room occupancy rate was 70% /+3.5pcts. Club Med's global capacity was +6% compared to '22, and recovered to 98% in '19. Club Med opened 4 new resorts during the year, and by 2026, along with the new opening and refurbishment of Club Med, Club Med's annual capacity is expected to increase by about 19% or more compared to 23. (3) Q1 '24:24Q1 Club Med achieved revenue of 6.082 billion yuan (at the same exchange rate), +15.2% over the same period in '23 and +66.2% over the same period in '22.

Capacity +6.8% compared to the same period in '23 and +127.9% compared to the same period in '22. The global average room occupancy rate reached 76.9%, +1.4pcts compared to the same period in '23 and +9.4pcts compared to the same period in '22. The average daily bed price was 2,190 yuan, +8.8%/17.9% compared to the same period in '23 and '22, respectively. In 24Q1, benefiting from continued growth in the European, African, Middle East and American markets and a strong rebound in Asia Pacific business, Club Med's unaudited net profit increased steadily compared to the same period in '23 and '22.

Atlantis Sanya: (1) Performance: Revenue of 1.68 billion yuan/yoy +91% in '23, another record high; adjusted EBITDA of 750 million yuan/yoy +158%, profitability continued to increase. (2) Key indicators: The average daily room rate is 2,386 yuan, the average occupancy rate is 82% /+39pcts, and the number of visitors is 6.08 million per yoy +109%. (3) 24Q1: Turnover 580 million yuan/yoy +4.5%, about 2.1 million visitors/yoy +7.5%, average daily room price 2,500 yuan/yoy -2.8%, mainly due to an increase in the business structure of conferences, incentive trips, large-scale corporate meetings and events. The average room occupancy rate reached 95.0%, +0.8 pcts compared to the same period in 23 years.

Vacation Asset Management Center: (1) Performance: 23-year revenue of 1.06 billion yuan/yoy -5%, adjusted EBITDA of 110 million yuan/yoy -49%. (2) Resort performance: Since opening in November 2023, Taicang Alps International Resort has been in a climbing period, benefiting from the increase in demand for urban vacations and snow and ice tourism, and the steady increase in project performance; Lijiang Mediterranean International Resort continued its recovery momentum, recording a turnover of 110 million yuan/yoy +21% in 23 years, 192,000 visits/yoy +10%, and 24Q1 recorded an operating business turnover of 25 million yuan/yoy +20%.

Replay Association and related business: (1) Performance: In '23, Revue made strategic adjustments, focusing more on the input-output ratio, moving from transaction scale orientation to improving member service and experience in the self-operated scenario. During the year, it recorded a turnover of 355 million yuan/yoy +9%. By the end of '23, the number of platform members exceeded 6.53 million/yoy +17%, and the number of paid users was 114,000 per yoy +53%.

Investment advice: The company is one of the world's leading comprehensive tourism groups focusing on leisure and vacation tourism. The data for the first year of '24 was impressive. In addition, more resorts will be launched and opened one after another in the medium to long term, so we are optimistic about the company's future growth. Considering that the overall real estate market continues to be under pressure and that international routes have not fully recovered to pre-pandemic levels, the company's net profit for 2024-2026 is estimated to be 3.6/4.2/480 million yuan (previous value was 39/53 million yuan in 24-25 years), maintaining a “buy” rating.

Risk warning: risk of macroeconomic fluctuations, risk of tourism demand recovery falling short of expectations, risk of new project performance falling short of expectations