The main business declined, the gross profit margin decreased, and the expense rate increased significantly: in the first half of the year, the company received a total of 2.5985 million people / increased by 4.49%. Due to the decline in ticket prices, revenue was 170 million / decreased by 10.76%; net profit returned to the mother was 8.2545 million / decreased by 59.01%; non-net profit was deducted by 3.5104 million / down by 75.51%.
The overall gross margin fell 3.85 pct to 29.67%. In terms of expenses, the sales rate increased by 0.83pct to 4.41%. The management fee increased by 1.16pct to 18.81%. As the interest on the borrowing of Dayong ancient city from the group headquarters cannot be capitalized, the financial expense rate has increased by 0.68pct to 1.34%.
The decline in ticket prices has a great impact, with the exception of Yangjiajie cableway, the rest of the business has declined: 1) Environmental protection passenger transport: passenger flow is 1.3993 million / down 3.53% and income is 62 million / 18%. The first reason is the price reduction (full tickets for environmentally friendly passenger vehicles are adjusted from 60 yuan / person to 55.1yuan / person in peak season, discount tickets are adjusted from 30 yuan / person to 27.68yuan / person in peak season, and network full ticket is adjusted from 60 yuan / person to 44.57yuan / person in peak season. The full ticket in the off-season is adjusted from 43.5 yuan / person to 28.16 yuan / person, the off-season discount ticket is adjusted from 21.75 yuan / person to 14.21 yuan / person, and the off-season online full ticket is adjusted from 43.5 yuan / person to 22.28 yuan / person) Second, off-season fares are implemented for the Spring Festival in 2019, while off-season fares are not implemented in the same period last year; third, the new ticket-free policy is implemented: since April 10, 1919, ticket-free for the elderly has been advanced from 70 years old to 65 years old, and children's ticket-free has been changed from 1.2 meters to less than 14 years old, resulting in an increase in the proportion of ticket-free people in the total reception. 2) Travel agency: revenue 42 million / down 21%. 3) Yangjiajie: passenger flow 426200 / increase 96.13%, income 23 million / increase 60%. First, benefit from the completion of Wulingshan Avenue, the road to Yangjiajie cableway is restored; second, increased marketing efforts to attract visitors from the Yangjiajie ropeway into the scenic area. 4) Shili Gallery sightseeing car: passenger flow 553100 / increase 5.78%, income 22 million / increase 7%. 5) Baofeng Lake: the passenger flow is 219900 / down 25.76%, and the income is 21 million / 16%. Because Baofeng Lake Scenic spot has not been upgraded for many years, the competitiveness of other mature scenic spots to tourists is weakened.
The ancient city of Dayong is in sight of opening, increasing the impact of marketing: the progress of the project in the ancient city of Dayong in Zhangjiajie has reached 96.97%, and the completion is in sight, but it is facing fierce competition in Song City (the ancient scenic spot in Zhangjiajie, which is performing arts in Song City in June). In addition to the performing arts of the scenic spot, it also includes four major theme areas: Dayong Ancient Street, Taoyuan Secret, Sea of lovers, and Apple Inc Paradise. The Grand Theatre "Love in Xiangxi" started in July and is located next to the ancient scenic spot in Zhangjiajie, which is expected to be completed next year. Therefore, the company plans to strengthen publicity, subdivide customers and increase marketing. In addition, we will actively promote the upgrading and expansion of Baofeng Lake Scenic area and the upgrading of sightseeing trams.
Profit forecast: do not consider the contribution of Dayong's future business for the time being, taking into account the ticket price reduction and the overall impact of the ticket-free policy on performance, downgrade EPS to 0.04,0.04,0.04 yuan respectively in 2019-2021, taking into account the boost to the company's performance due to the imminent opening of Dayong Ancient City, maintain the "overweight" rating.
Risk hint: passenger flow growth is not as expected, Dayong ancient city after the opening of the performance boost is not as expected.