Event: 2020H1 revenue of 890 million yuan /-67.65%, net profit of-118 million yuan /-288.62%, deduction of non-return net profit of-126 million yuan /-818.05%. Among them, Q2 has a revenue of 137 million yuan /-90.69% in a single quarter, and a net profit of-0.54 billion yuan /-266.30%.
Outbound travel and catering business have fallen sharply. Affected by public health events, outbound travel business stopped and there was no hope of short-term recovery in the first half of the year, and aviation and railway catering business also dropped sharply, but with the acceleration of domestic resumption process, catering business also gradually resumed. Specifically: 1) outbound travel business: 2020H1 retail revenue 426 million yuan /-73.47%, gross profit margin 16.31%/-0.36pct slightly decreased; wholesale income 0.85 million yuan /-47.52%, gross profit margin 16.96%/+0.83pct increased presumably from the company to strengthen the control of staff wages and salaries to reduce costs The enterprise award income is 170 million yuan /-62.69%, but the gross profit margin 16.67%/+3.59pct has increased. In the case of blocked outbound travel, the company strengthened the layout of domestic tourism, launched more than 2500 tourism routes nationwide in the first half of the year, and launched a series of business aircraft products for high net worth people; 2) catering business: aviation catering revenue of 130 million yuan /-67.44%, gross profit margin 25.31%/-15.97pct dropped significantly Railway catering revenue of 0.58 billion yuan /-53.85%, gross profit 33.46%/-1.70pct. The company carries out social catering services when catering is greatly damaged to increase the source of profits.
Focus on the main tourism industry, focusing on Hainan tourism market. In the first half of the year, the company sold shares in non-major tourism companies such as Changan Bank and Tongshengpin Titanium factoring Company, focusing on the upper and lower reaches of the outbound travel industry chain. including the acquisition of 100% stake in Hong Kong Kangtai Travel Service, 40% stake in Beijing Jiabao Runcheng duty-free goods Trading Co., Ltd., and a joint venture with the parent company to establish Hainan Kaiser Sega Travel Development Group Co., Ltd. In addition, the company also signed a strategic cooperation agreement with the Sanya city government and reached a cooperation consensus with Hainan rubber and other enterprises in Qiong, focusing on strengthening the Hainan tourism market and seizing the development opportunities of the tourism industry under the construction of Hainan free trade port.
Focus on the layout of the company's tax-free business. After the new management took office in October last year, the company continued to increase its duty-free business, including 49% equity in Tianjin Cruise Home Port duty-free shop, 20% equity in Nanjing duty-free shop in acquisition, 40% equity in Beijing duty-free shop in capital increase and deeply bound with Zhongshang Service, Wenyuan Fund Investment Co., Ltd., which has the background of Sanya city government, is tax-free. In addition, Caesar Group and Caesar Travel have moved their headquarters to Hainan, looking forward to further cooperation with China Service on intra-city tax exemption, outlying island tax exemption and potential foreign tax exemption programs.
It is worth noting that the duty-free shop in Nanjing with a stake in the company achieved 19 million yuan in revenue and 3 million yuan in net profit in the first half of the year, which can still remain profitable under special circumstances, proving that the layout of duty-free business is expected to increase risk resistance.
Profit forecast and investment rating: affected by public health events, the company's outbound travel business and catering business declined sharply in the first half of the year. Looking forward to the future, it will take time for outbound travel to return to normal, and the catering business will gradually resume, focusing on the follow-up layout of the company's duty-free industry, especially the cooperation with China Service in duty-free shops in the city and on outlying islands. The profit forecast is lowered, and it is estimated that the EPS for 20-22 years will be-0.25, 0.22, 0.38 yuan respectively, and the closing price on August 28, corresponding to PE, will be-58-64-38 times, maintaining the "prudent overweight" rating.
Risk tips: exchange rate fluctuation risk, overseas political risk, overseas destination emergency risk, etc.