Zhongxin Travel (002707) annual report comment report: 18-year low base, 19Q1 overall stability is expected to return to the growth channel in the future

Zhongxin Travel (002707) annual report comment report: 18-year low base, 19Q1 overall stability is expected to return to the growth channel in the future

Event: The company released an 18-year report and achieved revenue of 122 in 2018.

3.1 billion / + 1.

52%, net profit attributable to mother 0.

2.4 billion / -89.

90%, net profit after deduction is 0.

04 billion / -98.

37%, which is in line with the performance bulletin disclosure.

The company released 19Q1 quarterly report, and achieved revenue of 24 in Q1 2019.

5.8 billion / -0.

93%, net profit attributable to mother 0.

6.5 billion / -1.

37%, net profit after deduction is 0.

6.4 billion / + 6.

87%, in line with our Air Force expectations.

High in 2018 followed by low in 18H2 results.

2018Q1-Q4 revenue growth rates were 10 respectively.

7% / 18.

5% /-13.

4% /-0.

6%, the growth rate of net profit attributable to mothers was 31.

0% / 60.

9% /-18.

3% /-463%.

Among them, the main categories of high income and net profit growth in 18Q2 1) the industry boom turned to Japan and Europe, and the number of outbound tourists increased significantly, 2) the company confirmed that the investment income from the sale of ClubMed increased and the interest on lending increased;Mainly because 1) due to the sharp decrease in demand in Southeast Asia, the company’s discounted sales caused a loss of about 100 million, 2) because the target performance of the acquisition did not meet expectations, the company accrued about 1 of impairment losses mainly based on goodwill.

1000000000.

With a low base of 18 performance, it is still expected to return to the growth channel in the future.

Outbound tourism wholesale business operation, retail business accelerated.

Revenue from outbound tourism business in 2018 was 109.

9.3 billion / + 0.

26%, gross profit margin 8.

84% /-0.

62pct, of which, the wholesale business revenue was 86.

90 billion / -2.

52%, gross profit margin 7.

12% /-0.

76pct, retail business revenue 23.

03 billion / + 12.

39%, gross profit margin 15.31% /-1.

05pct.

Affected by incidents such as shipwrecks in Phuket, Thailand, and a volcanic eruption in Bali, Indonesia, wholesale business revenue also fell by 2%.

52% to 86.

9 billion, gross profit fell by 11.

86% to 6.

19 billion.

Benefiting from the 18-year increase in the number of direct-operated stores for 300 years, the number of direct-operated and partner stores at the end of 18 reached 435, and retail business revenue increased by 12 as well.

40% to 23.

3.0 billion, gross profit increased by 5.

17% to 3.

5.3 billion.

In 19Q1, revenue and net profit attributable to mothers decreased slightly.

1Q1 achieved revenue of 24.

58 billion / -0.

93%, net profit attributable to mother 0.

6.5 billion / -1.

37%, net profit after deduction is 0.

6.4 billion / + 6.

87%, mainly due to the impact of the previous macroeconomic downturn on outbound tourism.

1Q1 gross profit margin 13.

26% / + 1.

47 points, it is expected that the proportion of retail business will increase.

The expense ratio during the 1Q1 period was 10.

23% / + 1.

56 points, of which the sales / management / financial expense ratio rose to 8.

01% / 1.

83% / 0.

40%.

The short-term polishing overseas tourism industry demand is picking up, and the company’s “destination resource operation” model verification is long-term.

Catalyzed by the improvement of the macro economy and the prolongation of the May 1 holiday, Thailand ‘s shipwreck and exchange rate turmoil have been exhausted. It is expected that the outbound tourism industry in the future is expected to usher in recovery, and the company will directly benefit as an industry leader.

In addition, the company has accelerated the “destination resource operation”, and projects such as Switzerland’s Snow Mountain, Japan 成都桑拿网 Bed and Breakfast, and Saipan are expected to contribute an average net profit of one million in maturity. By then, the destination model will be verified and contribute new growth points.

Profit forecast and investment advice: We are optimistic about the long-term positive trend of outbound tourism and the company’s future target performance contribution. It is expected that the company is expected to return to the growth channel in the future.

Irrespective of future non-recurring gains and losses, the company is expected to have a net profit of 2 after deducting non-compliance in 19-21.

69/3.

32/4.

00 billion, corresponding to a growth rate of NA / 23.

4% / 20.

6%, the current sustainable corresponding PE is 25/20/17 times, maintaining the “overweight” level.

Risk reminders: macroeconomic risks, intensified market competition risks, performance recovery failure to meet expected risks, acquisition integration risks, exchange rate changes risks.