Xiamen Airport (600897): Third-quarter results are in line with expectations. Profitability of main business has improved significantly.

Xiamen Airport (600897): Third-quarter results are in line with expectations. Profitability of main business has improved significantly.

The third quarter of 2019 results are in line with our expectations. Xiamen Airport announced the first three quarters of 2019 results: operating income13.

40,000 yuan, an increase of 0 in ten years.

99%; net profit attributable to parent company3.

98 重庆耍耍网 ppm, a ten-year increase4.

7%, corresponding to a profit of 1.

34 yuan, net profit after deduction 3.

80,000 yuan, an annual increase of 3.

1%.

Third quarter operating income 4.

400 million, down 1 year.

9%, net profit attributable to mother 1.

4 ‰, an increase of 6 in ten years.

9%, in line with our expectations.

The development trend is affected by the suspension of Taiwan’s free travel visas. In the third quarter, the production volume increased vertically every quarter, which dragged down the performance of operating income.

The company’s lowest interest rate will fall from the third quarter.

2% (including regional line fluctuations of 19%), and the number of passengers increases by 2 every year.

According to CAPA data, Taiwan accounts for about 14% of Xiamen Airport International and Regional Line 西安耍耍网 capacity (number of seats). We estimate that the suspension of free visas will have a certain impact on the company’s revenue.

The company’s operating income in the third quarter temporarily decreased by one.

9%, still slower than the growth rate of production volume. We estimate that due to the impact of macroeconomic growth and outbound tourism interference, the company’s non-aviation performance may be relatively weak.

Effective cost control and profitability of main business improved.

Thanks to the effective cost control, the company’s operating costs in the third quarter of the company were at regular intervals.

2%, the main business profit margin increased to 3.

2ppt, an increase of 1 from the previous quarter.

5ppt to 43.

6%, a significant improvement.

One-time factors increase the profit in the third quarter, and net profit is expected to increase by 5% annually in the fourth quarter.

The company’s other income in the third quarter increased significantly by 224% per year, mainly due to government subsidies of RMB 3.68 million included in the current profit and loss.

We estimate that the company is expected to continue the current trend in the fourth quarter, and the net profit in the fourth quarter is expected to grow by about 5% per year.

Earnings forecast and forecast considering performance in line with expectations, maintaining 2019 / 2020e earnings forecast5.

3/5.

5.6 billion.

It currently corresponds to November 2019/2020.

9 times / 11.

3 times price-earnings ratio.

Considering that the company’s dividend rate will be reduced to 30% in the next three years, the dividend yield will no longer be attractive, and the endogenous growth rate will trend in the next 2-3 years. There is uncertainty in the positioning of Xiamen’s airport in the future, and it will remain neutralGrade and 20.

A target price of 00 yuan corresponds to 11.

2x 2019 P / E ratio and 10.

7 times 2020 price-earnings ratio, 5 compared with the same period last year.3% downside.

Risk Aviation demand is less than expected; the company’s future positioning is uncertain; international line growth is less than expected.