China National Travel Service (601888): High growth in Q1, focus on tax exemption, take new steps

China National Travel Service (601888): High growth in Q1, focus on tax exemption, take new steps

Event: The company released its 2018 annual report and 2019 first quarter report, and achieved revenue of 470 in 18 years.

07 billion (+66.

21%), net profit attributable to mother 30.

9.5 billion (+22.

29%), deducting non-net profit 31.

4.4 billion (+27.


In Q1 of 19, it achieved revenue of 136.

9.2 billion (+54.

72%), net profit attributable to mother 23.

0.6 billion (+98.

8%), deducting non-net profit of 15.

8.9 billion (+37.


A cash dividend of RMB 5 is distributed for every 10 shares.

50 yuan (including tax).

Investment Highlights The 18-year performance has been within expectations.

18 years to achieve revenue of 470.

07 billion (+66.

21%), net profit attributable to mother 30.

9.5 billion (+22.

29%), mainly due to the acquisition of Shanghai, strengthening the tax-free business of outlying islands and the development of the tax-free business of the Capital Airport and Hong Kong Airport. After excluding the impact of the Shanghai-Japan consolidation, revenue growth was 29% and non-net profit 31 was deducted.

4.4 billion (+27.

82%), slightly lower than 31 in the Express.

48, 31.

99 billion.

In the fourth quarter of 2018, it achieved revenue of 129 in a single quarter.

0.6 billion (+71.

22%), revenue growth was 59 earlier than Q3.

2% has further increased; net profit attributable to mother 3.

900 million (-37.

46%), deducting non-net profit 4.

5.2 billion (-20.

83%), the net profit fluctuation is estimated to be related to employee bonus accrual, deferred income, asset impairment loss and other factors.

With the integration of the day and day, the scale of tax exemption continued to expand, and the bargaining power of procurement was demonstrated.

In 2018, the merchandise sales business achieved revenue of 343.

3.5 billion (+119.

81%), with a gross profit margin of 52.24% (+7.

67pct), of which tax-free sales income is 332.

2.7 billion (+123.

59%), gross margin of 53.

09% (+7.

36pct), the completion of daily mergers and acquisitions, basically completed the docking of goods, personnel docking, process docking, and strengthened external negotiations with suppliers, leading to significant improvement in gross profit margin.

Japan and China (including T2 and T3 duty-free shops) achieved revenue of 73.

8.9 billion (+71.

39%, excluding the impact of the consolidation in April 2017, and the estimated growth rate is about 28%), of which China ‘s revenue was 67.

35 billion, net profit1.

7.6 billion, net interest rate 2.

61%, a decrease of 2 from 17 years.

14pct, profitability continues at high deduction rates.

Shanghai and Shanghai consolidated revenue of 104.

500 million, net profit attributable to mother 4.

6.7 billion, excluding commodity consolidation factors, the growth rate of merchandise sales revenue was 53%; Shanghai’s current net profit margin4.

47%, 19 years is expected to be affected by the implementation of the new deduction rate, but the profitability of Capital Airport is still guaranteed.

The Hong Kong Airport Duty Free Shop opened in July 18, with an estimated revenue of more than 2 billion, thereby expanding more than 1 billion, and gradually began to contribute in 19 years.

In addition, Guangzhou Airport T2 exit shop opened successfully; Hangzhou Airport, Kunming Airport and other exit shops completed the expansion and expansion project; Guangzhou Airport T1 exit shop, Hangzhou Airport exit shop, Qingdao Airport exit shop and other important airport contracts have been renewed; Nanjing Airport, GuangzhouAirport T2 Entry Shop opened; Hangzhou Airport and Chengdu Airport Entry Shop expanded operating area, and the scale of duty-free business continued to expand.

The island’s duty-free policy has driven the high growth of Haitang Bay’s duty-free shops.

Sanya Haitang Bay Duty Free Shopping Center achieved revenue of 80.

100,000 yuan (+31.

66%), of which tax-free income is 77.

7.1 billion (+32.


The relaxation of the tax exemption policy for outlying islands has a stimulating effect on tax-free sales, thus receiving 5.97 million customers (+8).

35%), accounting for 28 of tourists from developing countries in Sanya.

46%, the store rate is basically stable; 1.7 million people have invested in shopping (+29.

77%), the conversion rate increased significantly (28.

48%, +4.

7pct); per capita consumption 4711.

98 yuan (+1.

45%), the steady growth of passenger unit prices is related to the unchanged starting point of the postal tax.

Net profit of Haitang Bay Duty Free Shop for 18 years11.

0.6 billion (+21.

36%), lower net interest rates are related to higher rents.

The China National Tourism Administration dragged down its 18-year performance and sold it in 19Q1.

China National Tourism Administration has achieved revenue of 123 in 18 years.

880,000 yuan (+0.

10%), net profit attributable to mother may be 0.44 trillion, a decrease of 0 from 17 years.

7.8 billion, a drag on performance.

China National Tourism Administration has completed the industrial and commercial changes in February 19, 杭州桑拿网 transferred to the major shareholder China Tourism Group to help focus on the main business of tax exemption.

The gross profit margin has increased significantly, and expenses have affected profit growth.

18-year gross profit margin 41.

46% (+11.

64pct), mainly due to the expansion of the scale of the tax-free sales business, the proportion of high-margin tax-free business income increased to 70.

69% (+18.

14pc), and the gross margin of the tax-exempt business itself after the integration of procurement channels7.

36 points.

The 18-year sales expense ratio was 24.

68% (+12.

2pc), mainly due to the impact of the new deduction rate implemented by the Capital Airport.

Management expense ratio 3.

41% (-0.

42 pct), in which the executive budget has increased, which is related to the company’s performance-oriented 杭州夜网论坛 assessment and incentives.

Finance expense ratio -0.

01% (+0.

49 pct), including exchange losses due to 18-year exchange rates1.

18 billion (17 years for 0 exchange gains.

4.4 billion).

Accrued asset impairment losses for 18 years2.

9.8 billion, including zero bad debt losses.

9.3 billion and inventory loss 2.

3.0 billion and 2.13 million of goodwill impairment losses (related to travel agency subsidiaries).

In addition, 18-year sales credits resulted in a zero increase in net deferred income.

7.6 billion, profit recognition improvement deferred.

The performance of the first quarter of 19 maintained high growth, in line with expectations.

1Q1 achieved revenue of 136.

9.2 billion (+54.

72%), including the China National Tourism Organization ‘s January revenue of about 600 million, Shanghai and Shanghai consolidated revenue of about 3.9 billion, and stock business revenue of about 9.1 billion.

Q1 returns to net profit of the mother 23.

0.6 billion (+98.

8%), non-recurring gains and losses7.

1.6 billion, mainly related to the sale of about 6 brought by the China National Tourism Administration.

800 million investment income (after tax) related.

Deduct non-net profit of 15.

8.9 billion (+37.

37%), including the impact of Shanghai-Shanghai consolidation and the adoption of the new deduction rate, as a whole in line with expectations.

Q1 gross profit margin 49.45% (+9.

98pc), which is mainly related to the structural adjustment brought about by the sale of the China National Tourism Organization, with a sales expense ratio of 27.

84% (+9.

89pct), mainly due to the high deduction rate implemented at the airport, and the management expense rate2.

07% (-0.

54pct), financial expense ratio -0.

22% (+0.

84pct), mainly related to exchange loss gains and losses, Q1 assets impairment loss of 36.56 million, is still affected by overlapping inventory reserves.

Domestic + foreign resonance, expansion + management simultaneously, China National Tourism has ushered in a new stage of tax exemption.

Hainan’s tax-free integration and expansion: Haiwai’s 51% equity has been registered under the name of the tourism group. The group will restart the process of injecting into the listed company. The company also announced that it will sign a supply agreement with Haiwai.The retail market’s pricing strategy is used to set the supply price, and it is the first to expand the procurement scale before injection.

Haikou Duty Free Shop and Qionghai Boao Duty Free Shop have officially opened for business on the 19th. After the integration, China Duty Free will fully benefit. Duty Free Shops in Haikou International Duty Free City have completed land auctions, and the outlying island duty free is expected to expand again.

Accelerate the layout of duty-free stores in the city: Promote the national shopping policy of the stores in the city and work on the stores in the city. Speed up the construction of duty-free stores in Beijing, Shanghai, Qingdao, Xiamen and other places.

Continue to improve the gross margin of procurement: optimize brand structure and integrate procurement channels.

Expansion of taxable business to form a commercial complex: The progress of the Sanya Haitang Bay Hexin Island project was opened in 19 years, forming a commercial package with the Haitang Bay Duty Free Shop and extending the stay of consumers.

Accelerate “Going Global”: Actively pay attention to the proposal of duty-free business of key national airports along the “Belt and Road”; complete the expansion and expansion project of Cambodia ‘s Westport Duty Free Shop and officially open it to consolidate and expand its market share in Cambodia; focus on developing Southeast Asian citiesDuty-free shop business in the domestic market; pay close attention to bidding and M & A opportunities for key large-scale retail platforms in Asia Pacific.

Profit forecast: Assuming that Daxing Airport will start to contribute performance in 20 years, regardless of the increase in performance brought by the sea-free injection and the city’s duty-free shops, it is expected that the revenue growth rate in 19-21 will be -4.

9%, 21.

0%, 15.

3%, after excluding the impact of the sale of China National Travel Service, the growth rate is 27%, 23%, 15%; it is also expected that the net profit attributable to the mother will be about 45 in 19-20 years.

39, 47.

25, 56.

8.6 billion, a growth rate of 46.

7%, 4.

1%, 20.

3%, EPS is 2.

32, 2.

42, 2.

91 yuan, corresponding to PE is 33, 32, 27 times; after excluding the impact of China National Tourism Organization, the growth rate is about 23%, 22%, 20%, corresponding to PE is 39, 32, 27 times.

Risk Warning: Macroeconomic fluctuations, policies that are not as good as expected, and other risks