Tianmu Lake (603136): Cost reduction boosts performance, waiting for hot spring to land
Event: Tianmu Lake released the semi-annual report for 2019, and the company achieved operating income in 19H1.
20 ppm / + 0.
27%, net profit attributable to mother is 53.71 million yuan / + 9.
56%, net profit after deduction is 5169 million / + 14.
Q2 achieved revenue of 1 in a single quarter.
31 ppm / + 1.
42%, net profit attributable to mother 38.71 million yuan / + 23.
31%, deducting non-net profit 36.87 million yuan / + 17.
The company’s non-recurring profits and losses mainly come from government subsidies and investment and asset management income.
Opinion: Lower costs boost performance.
According to the subsidiaries, the 19H1 hot spring / Zhuhai / Cableway / travel agency subsidiaries achieved revenues of 60.23 million / 67.19 million / 8.25 million / 74.50 million, an increase of 1.
11% / 142.
89%; net profit of 4.51 million / 23.84 million / 5.11 million / 2.25 million respectively, with an increase of -25 in the future.
5% / 5.
53% / 318.
31% / 1.
Expenses: Expense rate 27 during 19H1.
15pct, of which the sales expense ratio is 13.
14pct, management expense ratio 15.
05% / + 0.
22pct, financial expense ratio -1.
At 23pct, the decrease in the financial fee rate was mainly due to the increase in interest generated by the company’s deposits. Considering the subsequent use of funds to invest in the second-phase project of the hot spring and the issue of debts that are about to be issued, the future financial fee rate will rebound.
Profitability increased steadily: 19H1 gross profit margin was 65.
66% / + 1.
59pct, net interest rate 28.
60% / + 2.
The company is a leader in the development of private scenic spots. The management team has rich experience and has established a one-stop tourism and leisure base relying on the reservoir and bamboo forest.
The company’s attractions are located in the Yangtze River Delta within 3 hours. The attractions cooperate to extend the customer’s stay, tap the secondary consumption to increase the company’s revenue, and direct sales mainly reduce the dependence on OTA.
The company’s development model is highly replicable and is expected to expand in different places in the future. The company’s future performance growth comes from the increase in 杭州夜网 passenger traffic + the increase in passenger unit prices + the completion of new projects.
There are three new projects: (1) Yushui Hot Spring Phase II (Zhuxi Valley), the amount of investment increased to 2.
400 million, the company’s high-end hotel product line, is expected to contribute 60 million revenue each year in the future; (2) Nanshan Xiaozhai Phase II, with hotels as the main body, replacing the Nanshan Zhuhai shortboard, improving the stay time and per capita consumption level of tourists(3) The renovation of the first phase of the hot spring will help revive the competition between hotels and hot springs that have been in operation for ten years, and increase the number of receptions and per capita consumption.
Investment suggestion: Consider the second phase of the hot spring project is about to open, adjust the company’s profit forecast.
It is estimated that the company’s total operating income for 2019-2021 will be 5 respectively.
2.3 billion, 6.
1.7 billion and 6.
8.4 billion, a six-year growth of 6.
82% and 11.
00%; net profit attributable to mother is 1.
19 billion, 1.
4.6 billion and 1.
6.1 billion, an increase of 14 in ten years.
07% and 10.
57%; Expected earnings for 2019-2021 are 1.
02 yuan, 1.
26 yuan and 1.
39 yuan, the corresponding PE according to the latest closing price is 21 times, 17 times and 15 times.
Maintain the “overweight” rating.
Risk reminder: the risk of natural disasters, the project progress is less than expected, the risk of reducing the price of attraction tickets