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复星旅游文化(01992.HK)跟踪分析报告:高端休闲度假标杆 看好长期需求回暖

Follow-up Analysis report of Fosun Tourism Culture (01992.HK): the benchmark of high-end leisure vacation is optimistic that the long-term demand will pick up.

華創證券 ·  Dec 23, 2021 00:00

Club Med: overseas demand picks up, quality upgrading brings momentum increase & price rise. Short-term: overseas markets speed up the repair, the previous suppressed demand can be released, we still need to pay attention to the follow-up evolution of Omicron and strengthen the proportion of needle vaccination. With the relaxation of overseas immigration policies and the increase in vaccination rates in some countries (more than 70% in some countries), the overseas recovery of 21Q3 is strong, and the rapid release of pent-up demand has led to a pick-up in leisure tourism. The turnover of 21Q3Club Med (at constant exchange rates), the capacity of reopened resorts and the price of daily beds have respectively returned to 75.5%, 71.9% and 117% of those in the same period in 2019, with an average global occupancy rate of about 64.8%, which is only lower than that of 2.3pct in the same period in 2019. Due to the rapid spread of Omicron overseas after November, the change of overseas demand still needs to pay attention to the follow-up evolution of mutants and the proportion of vaccination. Medium-and long-term benefit from capacity improvement and quality upgrading, volume and price are expected to make an upward breakthrough. The company has planned 16 new resorts in early 2021, including several ski resorts, continuously deepening the ski operation and brand image that the company is good at. With the renovation of resorts and the opening of new villages, the capacity of Club Med in 2024 will increase by about 26% compared with the plan in 2019, and the proportion of Gaoxing hotels will also increase to 98%. In the context of tourism recovery, the increase in volume and price of Club Med will lead to long-term performance improvement.

Sanya Atlantis: high-end holiday benchmark. Sanya Atlantis is the benchmark resort hotel of the tourist destination and the company's cash cow business, with revenue of 886 million yuan in the first half of this year, an increase of 143.8% over the same period last year. According to the China outbound Tourism Development report 2020 released by the China Tourism Research Institute, the scale of China's outbound tourism market reached 155 million in 2019, and the overseas spending of outbound tourists exceeded 133.8 billion US dollars; under the restrictions on outbound travel, China's high-end travel consumption is difficult to meet. Sanya, as a typical tourist destination city in China, undertakes part of the outbound demand. Under the current epidemic prevention policy, Hainan passenger flow is still under pressure; after the epidemic is stable, based on the warming of passenger flow, the promotion of Atlantis popularity and the upgrading of IP content, we believe that the company still has a large increase in the proportion of non-housing income, and continues to be optimistic about its future business performance.

Re-visit City: create a new leisure resort according to local conditions. Lijiang re-visit City is located in natural scenery, the supporting Club Med project has been opened before the National Day, and the occupancy rate of open rooms during the National Day period has reached 80%. Taicang re-visit City is located around the city, focusing on indoor skiing, deep diving and other projects, and is expected to be put into trial operation in 2023, both positioning high-end leisure vacation, in line with China's tourism vacation trend, medium-and long-term operation performance is worth looking forward to.

Earnings forecast, valuation and rating: although overseas Omicron spreads quickly, it has been affected by the epidemic for two years. If the symptoms of Omicron are mild, its impact on overseas travel may be less. Based on the gradual reopening and renovation of the company's resort, the opening of new villages and the construction of the re-visit city project, we estimate that the company's net profit from 2021 to 2023 will be about-24.7,5.2 and 780 million yuan. In the medium and long term, we are optimistic about the quality upgrading of the company's Club Med, the reputation building of Sanya Atlantis and Fuyou City, using the segment valuation according to the 2022 performance, and with reference to the normal valuation level of the comparable company in the industry, the resort and Atlantis EV/EBITDA are given 8 times, with a total value of about 26 billion. The Taicang and Lijiang projects are estimated to have a NPV of about 8 billion based on cash flow. After deducting 4 billion yuan of interest-bearing liabilities, the company is valued at about 30 billion yuan. Taking into account the liquidity factors of Hong Kong stocks and the uncertain prospects for recovery, the discounted value is about 15 billion yuan, corresponding to a value of about 12 yuan per share (that is, about 15 Hong Kong dollars). It is expected to have nearly 60% room for growth compared with the current stock price, which will be upgraded to the "strong push" rating.

Risk factors: repeated epidemic situation, higher-than-expected impact of mutants, macroeconomic risks, travel policy restrictions, project schedule is not as expected.

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