Events:

Shenzhen Airport releases Quarterly report for 2022

In terms of business, the company completed 529,000 takeoffs and landings in the first quarter of 2022 / yoy-33.79%, passenger throughput of 4.3014 million / yoy-52.70%, cargo and mail throughput of 334400 tons / yoy-10.11%, reached 57.50%, 32.60% and 123.26% of the same period in 2019, respectively.

In terms of finance, the company achieved operating income of 648 million yuan / yoy-17.65%, in the first quarter of 2022, 70.86% of that in the same period in 2019, and net profit of-299 million yuan / yoy-697.96%; deducting non-home net profit of-307 million yuan / yoy-908.20%.

Main points of investment:

The epidemic repeatedly declined passenger flow, and revenue decreased by 139 million compared with the same period last year.

Due to the repeated impact of the epidemic in Shenzhen, the process of passenger flow recovery at the airport has been disturbed. The company's passenger flow fell 52.70% in the first quarter compared with the same period last year, of which the airport passenger throughput fell 87.69% in March from a year earlier, only about 10% in 2019, the lowest level since 2020. Under the downturn of passenger traffic, the company's operating income for the current period decreased by 139 million yuan, down 17.65% from the same period last year.

The cost of putting into operation of the Satellite Office is under pressure, and the quarterly performance turns to a loss compared with the same period last year.

On the cost side, after the satellite office was officially put into production, the company's depreciation cost increased, superimposed by factors such as an increase in epidemic prevention expenses. the operating cost of the current period increased by 242 million yuan, an increase of 36.00% over the same period last year. In terms of expenses, interest expenses increased by 61 million yuan, an increase of 176.29% over the same period last year, leading to an increase of 50 million yuan in financial expenses, an increase of 169.25% over the same period last year. In addition, the company's investment income decreased by 24 million yuan, down 107.05% from the same period last year, or due to the loss of shares in enterprises such as airports. At the same time, the company's income tax expenses in the first quarter decreased by 107 million yuan compared with the same period last year. Under the combined effect of the above factors, the company's performance in the first quarter turned to a loss compared with the same period last year, realizing a net loss of 299 million yuan.

Capacity ceiling continues to rise, looking forward to the release of non-aviation potential in the future

Shenzhen Airport is located in the heart of the Bay area. With the increase in peak hourly capacity to 60 sorties and the official commissioning of the Satellite Hall, the capacity ceiling has been raised again, and the commercial and infrastructure facilities in the airport have become increasingly perfect. At present, the third runway project of Shenzhen Airport is speeding up, and the terminal passenger throughput will reach more than 80 million in the future. With novel coronavirus's diagnosis and treatment Plan (trial Ninth Edition)

Officially introduced, China's anti-epidemic has entered the second half, the inflection point of the domestic epidemic situation is gradually approaching, looking forward to the release of the company's non-aviation potential in the post-epidemic era.

Profit forecast and investment rating: based on the impact of the current epidemic and the company's future business recovery progress and other factors, it is estimated that the operating income from 2022 to 2024 will be 3.459 billion yuan, 3.902 billion yuan and 4.493 billion yuan respectively, and the return net profit will be-604 million yuan,-304 million yuan and 105 million yuan respectively. Maintain the "overweight" rating.

Risk hints: macroeconomic is not as expected, epidemic situation continues to rebound, major policy changes, infrastructure progress is not as expected, aviation safety accidents