The company released the 2023 Annual Report and the First Quarter 2024 Report:
1) Full year of 2023: Achieved revenue of 630 million yuan/ +70.90%, mainly due to changes in the external environment, market recovery, and revenue growth, which recovered to 125.25% in 2019; net profit to mother was 147 million yuan/ +623.90%, recovered to 118.55% in 2019; net profit after deducting non-attributable net profit of 140 million yuan/ +1024.22%, recovered to 115.70% in 2019; operating cash flow of 316 million yuan/ +177.36%.
2) 2023Q4: Achieved revenue of 144 million yuan/ +23.35%, recovering to 133.62%; net profit to mother of 0.27 million yuan/ +51.27%, recovering to 300.00% in the same period in '19; net profit excluding net income of 25 million yuan/ +72.83%, recovering to 277.78% for the same period in '19.
3) 2024Q1: Achieved revenue of 107 million yuan/ -11.33%, recovering to 120.22%; net profit due to mother of 0.11 million yuan/ -42.82%, recovering to 73.33% in the same period in '19; net profit after deducting non-return to mother of 0.09 million yuan/ -44.71%, recovering to 60.00% in the same period in '19; operating cash flow of 119 million yuan/ -57.63%.
Benefiting from the increase in passenger traffic after the epidemic, the business of scenic spots, hot springs, and hotels has fully recovered, and the Water World business has declined:
2023:1) Scenic area business revenue of 325 million yuan/ +107.95%, gross profit margin of 71.25% /+25.06 pcts, including Shanshuiyuan sector revenue of 179 million yuan/ +107.23%, gross profit margin 70.41%/+22.20pcts; Nanshan Bamboo Sea segment revenue of 146 million yuan/ +108.85%, gross profit margin 72.27% /28.60 pcts. 2) Water World's business revenue was 0.13 million yuan/ -9.50%, gross profit margin 6.98%/-8.65pcts. 3) Hot spring business revenue of 47 million yuan/ +47.71%, gross profit margin 48.41% /+11.42pcts. 4) Hotel business revenue of 207 million yuan/ +45.24%, gross profit margin 29.88% /+5.05pcts. 5) Travel agency business revenue of 0.09 billion yuan/ +25.71%, gross profit margin 7.20% /+2.70pcts.
Expense rate control was appropriate in 2023. The net interest rate declined due to the decline in 2024Q1 gross margin combined with a short-term increase in management expense ratio:
1) 2023: sales expense ratio 7.58% /-3.62pcts, management expense ratio 13.69% /-7.37pcts, financial expense ratio -1.14% /-0.76pct, gross profit margin 54.34% /+18.10pcts, net profit margin 26.72% /+20.98pcts.
2) 2024Q1: sales expense ratio 4.81% /-1.53pcts, management expense ratio 17.00% /+2.05pcts, financial expense ratio -2.05% /-0.74pct, gross profit margin 38.17% /-4.25pcts, net profit margin 13.01% /-5.05pcts.
The tourism market continues to recover, and the release of high-margin project performance is expected to be a driving force for future corporate growth:
In the future, the company is expected to continue to adhere to the principles of being close to the market, close to customers, close to the front line, and close to employees, seek innovation and change in management, strive to break the efficiency of the group's control model, improve the efficiency of the group's control model, improve the quality and speed up development, push one-stop destination traffic to break the game, use multiple management innovation measures and boost performance using service as a link. The two major regions will carry the transformation of destination traffic. As the travel market continues to recover, we expect high-margin business to bring high-quality growth opportunities to the company.
Investment advice:
Buy-A investment rating, 6-month target price of 22.02 yuan. We expect the company's revenue growth rates from 2024 to 2026 to be 22.2%, 8.7%, and net profit growth rates of 39.5%, 14.2%, and 16.7%, respectively; given a buy-A investment rating, the target price for 6 months is 22.02 yuan, which is equivalent to a dynamic price-earnings ratio of 20 times that of 2024.
Risk warning: macroeconomic fluctuations, offline recovery falling short of expectations, business development falling short of expectations, etc.