The company's performance in 2023 is in the middle of the forecast range, and shareholder returns are more positive than those in scenic spots. In 2023, the company's revenue was 630 million yuan/ +70.9%, up 25.2% from 2019; net profit to mother was 150 million yuan/ +623.9%, up 18.8% from 2019; after deducting non-net profit of 140 million yuan/ +1024.2%, up 14.9% from 2019. It is in the middle of the previous performance forecast range, which is in line with expectations. In 2023, the company plans to pay a cash dividend of 5.36 yuan (tax included) for every 10 shares, with a dividend rate of 68%, and a dividend rate of 2.9% at current price. At the same time, it plans to transfer 4.5 shares for every 10 shares to all shareholders by transferring capital from the Capital Provident Fund. Overall, shareholder returns are more positive than those in the scenic area industry.
The expansion of new projects boosted good revenue growth compared to 2019, and net interest rates were lower than in 2019 due to business restructuring and climbing new projects. With the abundance of scenic projects, especially hotel upgrades and expansion, etc., the company's revenue in 2023 exceeded the same period in 2019. Among them, hotel revenue increased 117% compared to 2019, while other businesses were relatively stable.
At the same time, changes in business structure (the share of hotel revenue increased from 19% to 33% in 2019, and changes in profitability due to the steep slope of new projects. The company's gross margin in 2023 was 54.3/+18.1pct, a decrease of 11.0pct from 2019. The new leasing guidelines and the rise in new stores had an impact on gross margin; the company's net interest rate to mother was 23.3% /+17.8pct, a decrease of 1.2 pct from 2019. Overall, the company's fee control efficiency was good, but profitability performance was disrupted by business restructuring and failure to fully utilize passenger flow and revenue.
2024Q1 performance was under relative pressure due to off-season weather factors and consumer environment disturbances. 2024Q1 has revenue of 110 million yuan/ -11.3%, net profit of 10.947 million yuan/ -42.8%, after deducting non-net profit of 9.347 million yuan/ -44.71%, which is under relative pressure. Overall, the company was affected by the weather and overall consumption environment in the first quarter, and some newly built mid-range and high-end hotels were still climbing, which was hampered by the off-season.
State-owned holdings combine their business advantages to track the release of stock potential and the pace of promotion of reserve projects. Changes in the current consumption environment still need to be tracked, and the revenue potential of the company's new projects after the epidemic has yet to be unleashed. In the short term, we can see that the Pingqiao Rafting Project will be put into operation this year, and second, the opening of the Shanghai-Suhu High Speed Rail before the end of the year will shorten the arrival time for major customer groups. The company continues to consolidate the construction of base projects. Subsequent reserve projects such as Nanshan Xiaozhai Phase II and Yushui Hot Spring Phase III are worth looking forward to. The medium- to long-term Animal Kingdom project is also expected to bring new highlights. In this context of foreign companies, professional management of the company is being promoted more actively. Ms. Li Shuxiang resigned as president and continued to serve as chairman, and the former vice president, Ms. Shi Yaoqin, became the company's president. In the future, based on “advantages of state-owned assets and original management advantages”, it is expected that the integration of resources in the scenic area and surrounding area will be further strengthened comprehensively to help the middle line growth.
Risk warning: Bad weather disturbances, spending power recovery falls short of expectations, new projects fall short of expectations, etc.
Investment proposal: Based on the quarterly report and current changes in the high-end consumer environment, reduce the company's 2024-2025 EPS to 0.85/1.00 yuan (previously 1.12/1.38 yuan), add 1.17 yuan in 2026, and the corresponding dynamic PE is 22/18/16x. The company has a good location advantage, and continues to be deeply involved in the construction of one-stop vacation destinations, and has relatively excellent product creation capabilities; after local state-owned assets entered the market, on the one hand, continued to strengthen local resource development and consolidated project reception capabilities; on the other hand, it adheres to a specialized and market-based management model, and there have been no major changes yet. Considering fluctuations in the consumption environment and disturbances in short-term performance after investment in new projects, it was temporarily downgraded to an “gain” rating.