Last year, the tourism service business / first-level land development contributed 30 million / 13 million yuan in incremental gross profit respectively, accounting for 58% of the company's total incremental gross profit, accounting for 24% of the company's total incremental gross profit, benefiting the rapid growth of cruise ship passenger transport in Liangba and Yixia. Tourism service business has become the most important factor in the company's performance growth. Although the 20Q1 epidemic has had a significant impact on the company's passenger transport, auto sales and cruise business, the impact of the epidemic will eventually pass, and we judge that 20Q4 is expected to return to performance growth.
Performance profile: the company's revenue in 2019 increased by 9.6% to 2.21 billion yuan, and the net profit returned to the mother / deducted non-net profit increased by 17.1% to 115 million / 101 million yuan respectively. Affected by the epidemic, the company Q1 was shut down most of the time, and the profit of the tourism service business, which contributed the largest increase in profits in the same period last year, declined significantly, while the highway passenger transport and automobile sales business also shrank compared with the same period last year. The company's Q1 revenue also decreased by 46.4% to 290 million yuan, and the return net profit / deducted non-net profit decreased by 286% to-37 million /-38 million yuan.
Last year, the tourism service business contributed an incremental gross profit of nearly 60%, and the layout effect of the cruise business gradually appeared. In 2019, the company's tourism service business contributed an incremental gross profit of 29.8 million yuan, accounting for 58% of the company's total incremental gross profit, which was the biggest driver of the company's rapid growth last year. Specific breakdown of the incremental gross profit sources of tourism services: 1) benefit from the sustained and rapid growth of passenger flow of cruise ships in two dams and one gorge. The company's gross profit of waterway tourist passenger transport increased by 15.17 million yuan last year, accounting for 51% of the total incremental gross profit of tourism services. 2) and show that the annual Jiufeng Valley scenic spot contributed an incremental gross profit of 8.01 million yuan; 3) the increase in port passenger and logistics volume increased the gross profit of tourist port services by 5.37 million yuan.
The performance of the traditional main auto sales and passenger transport business is weak, and it is expected that trade, logistics and land development will continue to contribute to incremental profits. Under the slowdown in domestic car sales, the company's auto sales revenue and gross profit increased by 7.7% and 4.0% respectively to 1.2 billion / 65 million yuan, while road passenger transport was hit by high-speed rail, self-driving and other modes of transport. Last year, revenue / gross profit fell 2.4% to 340 million / 42 million yuan, while the gross profit share of the two traditional main industries, automobile sales and passenger transport, fell to 32%. The business and logistics business benefited from the better development of the leasing business, with a revenue / gross profit increase of 20.2% to 360 million / 60 million yuan, and land primary development revenue of 143% to 21.42 million yuan. It is expected that the follow-up land primary development will continue to bring more incremental profits for the company.
The epidemic affects the performance of Q1, and it may take 0.5 years for tourism confidence to recover, and the epidemic does not change the growth logic of the company.
The company is located in a serious epidemic area in Hubei. In recent years, the fast-growing tourism business and passenger transport business have been seriously affected by the epidemic. The net profit of Q1 has also dropped by 286% to-37 million yuan, while the company expects a loss of 0.30 billion yuan to 55 million yuan in the first half of the year. We judge that it may take 0.5 years for travel confidence to recover, and it is expected that the company's Q4 will return to business growth this year, and the impact of the epidemic will almost fade next year. Continue to be optimistic about the company's continued growth in cruise passenger transport to expand the tourism sector in the future, and it is expected that the first-level development of land will continue to contribute considerable profits in the future.
Risk factors: recurrent epidemic situation; tourism recovery is not as expected; land development is lower than expected.
Investment suggestion: considering that the company is located in Hubei Province, the two major business tourism and passenger transport businesses are seriously affected by the epidemic at the same time. Although the company is promoting business resumption in an orderly manner, it is expected that it will take time for tourism confidence to recover, and there will be greater pressure on performance this year, but the company will return to growth next year. We adjust the company's 2020 / 21 EPS forecast to 0.04 EPS 0.45 yuan (the original forecast 0.46 yuan 0.56 yuan), adding a new 2021 EPS forecast of 0.57 yuan, the current price corresponding to PE in 260-23-18, maintaining the "buy" rating.