Guilin Tourism (000978) 2018 Annual Report Comment: The effect of cost reduction and cost control significantly helped 2018 performance exceed expectations

Guilin Tourism (000978) 2018 Annual Report Comment: The effect of cost reduction and cost control significantly helped 2018 performance exceed expectations

Investment Highlights The company announced its 2018 annual report and realized revenue in real terms5.

7.3 billion / + 3.

02%, net profit attributable to mother 0.

80ppm / + 51.

87%, deducting non-attributed net profit of 0.

7.5 billion / + 37.

27%, EPS is 0.

22 yuan / share.

Among them, Q4 achieved revenue in a single quarter.

34ppm / -2.

At 85%, the net profit attributable to mothers was 1.36 million yuan, and the previous 17Q4 markedly increased by 17.95 million yuan to achieve a loss.

  Yinziyan’s performance is still old and bright, and other expected 都市夜网 stable growth at high bases.

In 2018, the company scenic area received a total of 4.76 million tourists / + 7.

56%, of which the core scenic spot Yinziyan is still growing rapidly, receiving 2.79 million tourists long-term / +14.

50%, revenue 1.

10 ppm / + 13.

52%, net profit is 0.

71 ppm / + 8.

04%.

It is obvious that Yinziyan has started to create a national 5A reputation, and the application for land for project development has been approved by the relevant departments of Lipu City, which is conducive to the increase in popularity and reception capacity, and stable growth is expected.

Except for Yinziyan, other scenic spots basically maintained a small positive or negative growth, and also contributed to the overall net profit.

  The profitability of the hotel has improved, and the cruise ship business may have reflected the impact of price reductions.

Lijiang Waterfall Hotel Revenue 1.

03 ppm / -0.

16% is basically the same as last year, but the net profit is 8.57 million yuan / + 25.

30% is strengthened from internal cost control, manual wages, and variable costs are reduced each year.

Li River Cruise Revenue 1.

31 ppm / + 5.

58%, the unit price of passengers from 221 yuan instead of 216 yuan, taking into account the 18-year Lijiang cruise ship star rating work continued to promote but it is conducive to the increase in passenger unit price, so the actual passenger unit price decline is speculated that after October 1st Lijiang cruise ship fare reduction by 20%Related, and 19 years will continue to be under pressure.

  The gross profit margin was flat, the growth of net interest rate increased, and the cost reduction and cost control effect was remarkable.

Gross profit margin for 2018 was 45.

97% / + 0.

25pct is basically flat with a net interest rate of 11.

55% / + 4.

The significant increase in 74pct results from a significant decrease in the expense ratio during the period.

Among them, the sales rate is 2.

91% / + 0.

18pct increased slightly, due to the strengthening of advertising; management fee rate 27.98% /-3.

21pct has been greatly reduced due to the company’s streamlined departments and staff. For example, the headquarters was reduced from the original 12 departments to 8 departments and 1 center, and the staff headquarters replaced 2,602 people in 2018 from 2,651 in 2017; the financial rate was 7.

31% / + 0.

40 marks.

In general, the company continued to improve operating efficiency, optimize the organizational structure and streamline its staff, so the rates during the period were significantly reduced.

  Ding Zeng is on the agenda again, looking forward to the integration of tourism resources in Guilin.

The company clearly stated in its annual report that one refinancing will be completed in 2019-2021 and the second refinancing will be completed in 2022-2023.

Considering that the Guilin Municipal Government has continued to promote the integration of local tourism resources since the second half of 2017, we believe that the development of the parent company Guilv Tourism may still inject high-quality resources into Guilin Tourism, and it will also have a synergistic effect while strengthening the strength of Guilin Tourism.

  Profit forecast and investment rating: Benefiting from the continued advancement of cost reduction and cost control, the company’s performance in 2018 was slightly higher than expected.

At the current point in time, the company’s remaining high-quality assets are injected into expectations, the alternative assets are revitalized, and external cooperation is strengthened. The opening of the Lijiang Qianguqing project in cooperation with Songcheng Performing Arts at the end of July will provide new profit points for the company.

The comprehensive reduction of air tickets will have a certain impact on future performance, and pay close attention to the subsequent company’s response strategies.

Increase earnings forecast, EPS is expected to be 0 in 19-21.

21/0.

28/0.

At 34 yuan, the closing prices on April 2 corresponded to PE of 34/25/21 times respectively, maintaining the rating of “prudent increase”.

  Risk Tips: Scenic area operation is inefficient, extreme natural weather, attraction ticket prices continue to drop, etc.