Huangshan Tourism (600054) 2018 Annual Report Review: Passenger Flow and Performance Maintained Stability

Huangshan Tourism (600054) 2018 Annual Report Review: Passenger Flow and Performance Maintained Stability
Event: Huangshan Tourism released the 2018 annual report, and the company achieved revenue of 16 in 2018.21 ppm / -9.13%, realizing net profit attributable to mother 5.8.3 billion / + 40.68%; net profit after deduction to mother 3.42 ppm / -1.19%.Non-recurring gains and losses mainly come from gains and losses of 38.5 million (11.11 million in 17) entrusted to invest in or manage assets, and investment income from disposal of financial assets6.8 billion (75.87 million in 17 years), including the reduction of 49 million shares of Hua’an Securities, increasing net profit1.9.7 billion.Revenue in Q4 was 4 in a single quarter.31ppm / -7.69%, net profit attributable to mother 1.6.2 billion / + 125.29%, net profit after deduction is 0.09 ppm / year at least 12 million.Dividends will be paid every 10 shares in 20181.32 yuan plan.  Opinion: Revenue: The company’s 18-year revenue decline was mainly due to the high base of revenue brought by the real estate settlement in 17 years. The 18-year subsidiary Yuping Real Estate produced a balance sheet. If the impact of real estate sales is excluded, the revenue experience is -0.2%, basically the same as last year.In terms of different industries, the hotel / ropeway / tourism service / garden development business achieved revenue 6 respectively.4.7 billion / 4.9.6 billion / 3.9.4 billion / 2.3.1 billion, an increase of 3 each year.11% / 1.08% /-0.82% /-0.75%.The front edge of the scenic area received 3.38 million visitors / + 0.60%, ropeways and cable cars gradually transport tourists 669.110,000 person / + 0.3%, multiplication rate 1.98 / Maintained stability. The decrease in revenue from garden development business was mainly due to the decline in local budgets.Gross margin: Hotel / ropeway / travel service / garden development business gross margins are 30.59% / 86.74% / 11.50% / 82.92%, twice -2.47pct / + 1.59 points / + 2.52 points / -4.57 points.The decline in hotel gross profit margin was mainly due to the company’s comprehensive implementation of Beihai Hotel, Paiyunlou Hotel and other transformation projects. The increase in the cost of garden development business was due to the consolidation of Beihai Wastewater Treatment Station this year.Expense side: sales expense ratio 6.72% / + 5.18pct, mainly due to the difference between the vesting period of the company’s advertising expenses and incentive payments confirmed by the company and the previous period, and the company’s increased marketing activities in the current period; the management expense ratio was 16.20% /-1.16pct, financial expense ratio is 0.11% / + 0.38pct, mainly due to the impact of foreign exchange losses and Yuping Property’s repayment of the current period of supplementary interest calculation stopped.In terms of profitability: the company’s comprehensive 深圳spa会所 gross profit margin is 54.14% / + 3.51pct, net interest rate 37.33% / + 12.75pct, the growth rate of the net interest rate is mainly affected by non-recurring gains and losses.  Based on the advantages of Huangshan resources, actively build a tourism complex.The company proposes strategic layouts such as “one mountain, one water, one village, one cave,” etc. around the development of tourism in the whole region, and fully develops the surrounding resources of Huangshan.The quality of tourism services has been upgraded to meet short-term needs.The company optimizes the process of attractions, solidly promotes real-name booking, scanning and facial recognition to enter the park, and provides tourists with “one-click” services.Implement differentiated operation and development of hotels on the mountain to enrich product supply and tourist experience.The Huang-Hang high-speed railway was officially opened to traffic, and the traffic bonus will be released soon.Huangshan Scenic Area is backed by the Yangtze River Delta and adjacent to East China with the strongest consumption power.The opening of the Huang-Hang high-speed rail is expected to drive the growth of passenger flow in the scenic spot, and hedging the impact of ticket price reduction.The company plans to receive 3.5 million people / + 3 in 2019.55%.  Investment suggestion: It is estimated that the company’s total operating income for 2019-2021 will be 18 respectively.34 billion, 19.9.9 billion and 21.88 ppm, an increase of 13 in ten years.13%, 9.01% and 9.43%; net profit attributable to mother is 4.6.1 billion, 5.02 billion and 5.62 trillion, a ten-year growth rate of -20.92%, 8.91% and 11.95%; Expected earnings for 2019-2021 are 0.62 yuan, 0.67 yuan and 0.75 yuan, according to the latest closing price of PE corresponding to 19 times, 17 times and 15 times.Maintain “Buy” rating.  Risk reminder: ticket and cableway price reduction risk, natural disaster risk, project progress is less than expected.