The company released the three-quarter report for 2023:1) The company's revenue for the first three quarters was 19.18 billion yuan, +25.8% year-on-year, and net profit of 1.02 billion yuan (loss of 990 million yuan in the same period in '22, profit of 870 million in the same period in '19), and profit after deduction of $1.0 billion. 2) In 23Q3, the company had revenue of 6.8.0 billion yuan, +18.2% year-on-year, and a profit of 340 million yuan (loss of 230 million yuan in the same period in '22, profit of 110 million in the same period in '19), with a profit of 340 million dollars after deduction.
Operating data:
1) Passenger transport business: Q1-Q3: The number of passengers sent was 45.146 million, +100.1% year-on-year, and -33.1% in '19; of these, the Guangzhou-Shenzhen intercity trains sent 17.238 million, +117.2% over the same period in '19, -44.2%; the direct bus service was suspended in the same period in '22, -65.5% compared to '19; long-distance buses sent 27.348,000, +87.0% year-on-year, -21.8% from '19. Q3: The number of passengers sent was 18.737 million, +101.5% year-on-year, -21.1% in '19; of these, the Guangzhou-Shenzhen Intercity Railway sent 6.820 million, +125.8% year-on-year, and -35.0% in '19; direct buses sent 232,000, -44.0% in '19; and long-distance buses sent 116.84 million, +86.1% year-on-year, -9.1% over '19. Business volume improved markedly year-on-year, mainly due to the continuous improvement of the external business environment, the resumption of normal customs clearance at the Shenzhen port, and the resumption of direct traffic through the port. Furthermore, since April 2021, the company has applied for the opening of some additional cross-line long-distance train groups, driving an increase in the long-distance bus business.
2) Freight business: Q1-Q3: freight volume: 5.513 million tons, -3.1% year over year, +36.1% over the same period in '19, of which 42.956 million tons of goods were handled, -3.5% year over year, +51.4% over year 19, and 1.257 million tons of goods sent, -1.6% year over year, +0.1% over year 19. Q3: The freight volume was 19.528 million tons, -1.8% year over year, +32.5% in '19, of which 15.518 million tons of goods were handled, +0.3% year over year, +47.6% compared to '19, and 4.09 million tons of goods delivered, -9.4% year over year and -5.0% over year 19.
Costs and expenses: 1) Operating costs for the first three quarters were 17.66 billion, +7.7% year on year, gross profit margin 7.9% (-7.6% for the same period in '22), Q3 operating costs of 6.28 billion, +5.0%, gross profit margin of 7.6% (same period in '22); 2) Expenses: Three fees for the first three quarters totaled $150 million, -29.0% year over year, and total Q3 fees of $36 million. Compared with the same period of 59.5%, management expenses and financial expenses all decreased.
Investment suggestions: 1) Profit forecast: Based on the release of the previous report in 2022, the tourist recovery process has changed greatly. Our comprehensive forecast for 2023-25 is profit of 1.12 billion, 1.29 billion and 1.43 billion yuan, respectively. The corresponding EPS for 2023-25 is 0.16, 0.18, and 0.20 yuan, respectively, and the corresponding PE is 16, 14, and 13 times, respectively. 2) Looking ahead, as passenger traffic gradually recovers, the opening of additional cross-line EMUs gradually realizes the increase in performance. Keep an eye on the progress of railway reform for a long time. Referring to the company's historical PE level (10 years to before the epidemic), return to normal profit in 2024, give 20 times PE for 24 years, corresponding to the target price of 3.64 yuan, which is 41% of the current space, maintaining the “recommended” rating.
Risk warning: The economy has declined sharply, and traffic volume has fallen short of expectations.