Incident: Lijiang Co., Ltd. released its report for the first quarter of 2024. The company achieved total revenue of 180 million yuan in the first quarter of 2024, a decrease of 0.05% over the same period of 2023; net profit attributable to shareholders of listed companies was 56 million yuan, an increase of 1.11% over the same period in 2023.
The tourism market in Yunnan and Lijiang was booming in the first quarter of 2024, and the holidays are expected to continue in the second quarter. The 2024 Spring Festival holiday totaled 8 days, and total tourism revenue in Yunnan Province reached 63.74 billion yuan. Compared with the same period of the 2023 Spring Festival, a comparable increase of 45.1%. In terms of scenic spots, the number of visitors to the ancient city of Lijiang reached a record high of 80,000 visitors. In terms of ropeway business, the company's three ropeways received a total of 191,300 visitors during the Spring Festival holiday, an increase of 48.02% over the 2023 Spring Festival; of these, Yulong Snow Mountain Ropeway received 83,300 visitors, an increase of 76.61% year on year; Yunshanping Ropeway received 91,400 visitors, up 21.59% year on year; and Yakniuping Ropeway received 16,600 visitors, up 140.46% year on year. During the three days of the Qingming holiday in 2024, Yunnan Province received a total of 124.696 million visitors, achieving tourism revenue of 11.321 billion yuan, an increase of 31.7% and 67.1%, respectively. Among them, Lijiang received 938,900 visitors, an increase of 205.83% over 2019, and tourism revenue reached 925 million yuan, an increase of 144.71% over 2019.
The company's new hotel project is expected to be implemented within the year, driving the company's revenue growth. In terms of new hotel projects, the Lugu Lake Indigo Hotel is scheduled to open in June 2024, and Longteng's revenue budget will increase by 10.54.38 million yuan. At the same time, in terms of revenue growth, Xuekawa is expected to add 8.14 million yuan in venue rental, passenger service revenue, and store rental revenue.
Investment advice: The company is expected to achieve revenue of 887/9.12/947 million yuan and net profit to mother of 2.37/2.54/268 million yuan in 2024-2026, corresponding to PE of 24.0/22.4/21.3X, maintaining an “incremental” rating.
Risk warning: Scenic area safety incidents affect demand; progress of new projects falls short of expectations; natural climate impacts.