Performance Overview
In 2017, the company realized operating income of 345 million yuan / + 14.60%, net profit of 55 million yuan / + 65.31%, and non-return net profit of 49 million yuan / + 25.43%.
Business analysis
The performance of the Dalian project exceeded expectations, and the gross profit margin and expense rate were improved: the company's income and deduction of non-net profit increased by 14.6% and 25.43% respectively, of which the income of the Dalian project was 248 million yuan / + 19.03% and that of the Harbin project was 73 million yuan / + 0.02%. The high growth of revenue and profits of Dalian project benefits from the two-wheel drive of products and marketing, which combines the company's original IP with the upgrading of scenic spots to improve passenger flow and passenger unit price; the competitive environment of Harbin project is relatively fierce, and it is difficult to guarantee passenger flow due to subway construction. From the perspective of gross profit margin, the gross profit margin further increased (+ 7.59%), especially the Dalian project led to the increase of 7.36pct due to the upgrading of scenic spots and the introduction of IP. From the point of view of the expense rate, the sales cost decreased by 9.63%, the financial expenses and management expenses increased by 19% and 15% respectively due to the construction of the new project, and the financial expense rate increased by 0.1pct. In the case of business reform and increase, the company can achieve a substantial increase in gross profit margin, a substantial increase in income and the expense rate has been controlled is the embodiment of the company's operating ability.
The new projects continue to move forward, and a number of heavy asset projects require high funding for the company: the company's stock projects are relatively mature (Dalian and Harbin projects opened in 1996 and 2005 respectively), and 15% growth can be achieved through scenic spot upgrading and IP products. Light assets projects continue to be exported (Wuhu Phase I trial operation in September 2016, Phase II show opening in 18 years, Huai'an Project opening in May 2017), Chongqing, Xi'an and other operating projects are expected to land. The incremental project continues to move forward, in which the Wafangkou project is suspended. The company has a large capital investment in many incremental projects, including 780 million yuan for Yingkou Phase II project, 1 billion yuan for Hangzhou project, 382 million yuan for Xiamen project, 880 million yuan for Qiandao Lake project and 295 million yuan for Sanya project. the investment of the five projects is about 3.3 billion yuan. At present, the financial expense rate of the company is 3.8%. With the construction and landing of the later project, there is a great pressure to raise funds in the form of bank loans or bond funds.
The company has the expectation of M & An expansion and equity incentive in the past 18 years, making use of the resources of major shareholders and capital operation mode to realize the business extension of the company: the company expects to integrate high-quality tourism resources through the resource advantages of major shareholders in the past 18 years, at the same time, it uses capital means to diversify the docking capital market and capital market, and reduces the financial pressure of the company through the establishment of funds, optimization of investment structure, convertible bonds and other refinancing methods. At the same time, there are the extension of the tourism industry chain based on the main industry and the corresponding expectation of equity incentive.
Profit adjustment and investment suggestions
The net profit of 18E-20E is 0.64 plus 0.73 billion yuan, with a growth rate of 15 percent, 14 percent, and 17 percent. The EPS was 0.53, 0.6 and 0.71 yuan, respectively, and the PE was 61-53-45 times, maintaining the overweight rating.
Risk hint
The opening of the company's projects under construction is not as expected; the market prosperity of the stock project is declining; the proposed cooperative project is not progressing smoothly; many projects have landed, resulting in greater financial pressure.