Caesars Travel (000796) Annual Report 2018 & 2019Q1 Comment: Asset impairment drags down performance and equity changes continue to advance
Brief description of performance: In 2018, it achieved revenue of 81.
80 ppm / + 1.
67%, net profit attributable to mother 1.
94 ppm / -12.
03%, deducted non-net profit 1 from the mother.
7.2 billion / + 13.
68%, the basic EPS is 0.
24 / -12.
01%, net operating cash flow was 2.
26 ppm / -54.
In Q4 2018, it achieved revenue of 12.
52 ppm / -30.
64%, net profit attributable to mother -1.
18 ppm (mainly due to the industry’s highly competitive gross profit margin increase, and the asset impairment provision of 77.54 million yuan in 2018Q4).
2019Q1: Achieved revenue of 18.
06 ppm / + 0.
41%, net profit attributable to mother 0.
30 ppm / + 8.
41%, attributable to non-net profit of -0.
11 ppm / -139.
91%, the basic EPS is 0.
0377 yuan / + 8.
Net operating cash flow-0.
6.4 billion / +53.
77% (mainly due to the increase in the company’s advance receipts and the decline in payments made).
Non-recurring items mainly come from non-current assets disposal gains and losses.
The growth rate of tourism business affected by the industry is slow, and the effect of differentiated strategies has significantly improved the unit price of passengers.
The company achieved revenue of 81 in 2018.
80 ppm / + 1.
Among them, the tourism business achieved revenue of 70.
15 ppm / + 0.
23%; food business achieved revenue 11.
53 ppm / + 11.
In the tourism business: ① Citizen Wholesale Revenue 12.60 ppm / -2.
33%, revenue is slightly offset by industry influence, but the customer unit price has increased significantly8.
87%; ② Citizen retail business revenue 47.
07 ppm / + 1.
32%, revenue has grown steadily, and the customer unit price has increased significantly by 10.
35%; ③Corporate award business revenue 10.
48 ppm / -1.
51%, the unit fare is 7.
Overall, tourism business income has grown steadily.
23%, the effect of the differentiated strategy is significant, and the customer unit price has increased significantly7.
The gross profit margin remained stable as a whole, and the gross profit margin of the tourism business dropped slightly due to the drag on the wholesale business.
The overall gross profit margin for 2018 was 18.
10%, increase 0 by 2017.
Aviation catering and service business continued to improve1.
26pct to 42.
69%; Tourism business gross margin breakdown range is 0.
61pct to 13.
34%, specifically: Citizens ‘gross profit margin for wholesale business decreased by 1.
17 points to 4.
At 40%, the gross profit margin of citizens’ retail business decreased slightly by zero.
24pct to 16.
22%, the gross profit margin of corporate bonus business decreased by 1.
98pct to 11.
Market competition has intensified. The sales expense ratio has risen, and asset impairment losses have weighed on performance.
2018 sales rate increased by 1.
10pct to 8.
83%, we think it is mainly because ① the industry is in a bad climate and the market competition is intensifying. ② the company integrates diversified marketing work online to promote the “new, strange, special, high” series, “wise choice”, “Kaiser famous place”, “Kaiser Vacations” and other characteristic brands, speed up the incubation speed of sub-brands, increase marketing costs; management + R & D expense rate decreased by 0.
44 points to 3.
92%, indicating that the company’s management efficiency has been improved; the increase in financial expense ratio has increased by 0.
21 points to 1.
37%, mainly due to the increase in interest expenses and the decrease in exchange gains.
The accrued asset impairment loss of 82.98 million yuan in 2018 severely dragged down the performance, resulting in the company’s performance growth was not obvious under the low base in 2017 (2017 ① Provision of 1 million US dollars in financial assets sold by Jiaxing Fund Leshi Sports ProjectImpairment provisions were made; ② through the restriction of government policies, the amount of accounts receivable of the “Shuangqiao” was 1249.
530,000 yuan in full provision for bad debts).
Impairment losses in 2018 mainly came from bad debt provision, of which other receivables of Five Star Real Estate Development Company were 4,984 million, and other receivables of Baoji Changle Electric Co., Ltd. were 2,900 million. The ageing has been over 5 years and replacement may be earlierSmall, so a total of 7,884 million bad debt losses.
The performance of the first quarter of 2019 increased steadily, and the company’s operating management efficiency remained at a stable level.
2019Q1 company achieved revenue of 18.06 ppm / + 0.
41%, gross profit margin 14.
Selling expense ratio 10.
43% / + 0.
28pct, management expense ratio 3.
39pct, financial expense ratio is 0.
The decrease in the gross profit margin contraction caused the non-net profit to be deducted.
The competition in the outbound tourism industry in 2019Q1 is fierce, and the overall growth rate is relatively slow. As a result, intensified industry competition has led to a decline in gross profit margin.
The overall level of the company’s expense rate remained stable, indicating that the company’s operating management efficiency remained at a stable level.
Equity changes continue to advance, and Jiaxing Fund is transferred to HNA, and control may change.
On March 21, 2019, Caesars Tourism announced that HNA Tourism and Daichi Holdings had received the notice of Hongxin Securities. Due to HNA Tourism, Daiji Holdings pledged the shares of Hongxin Securities in breach of contract.The pledged shares involved in the breach of contract shall be disposed of in breach of contract.
As of March 27, 2019, HNA Tourism and Daji Holdings converted into passive reductions to account for 0 of the total share capital through centralized bidding.
94% equity; On March 28, HNA Tourism and Daji Holdings, through centralized bidding, passively reduced their holdings to account for the total share capital2.
35% equity; On March 29, HNA Tourism and its concert parties signed a “share transfer agreement” with Jinyu Investment, about 90% of the closing price of a listed company on the previous trading day held about 44.17 million shares (Accounted for total equity 5.
50%) The agreement was transferred to Jinying Investment Sub-Fund.
So far, HNA Tourism and its concert parties have held approximately 30 listed companies in total.
Currently, Caesar’s leadership system holds approximately 29 shares.
97%, the shareholding ratio of the first and second largest shareholders is extremely close.
Investment suggestion: 杭州桑拿 Caesars Tourism’s upstream resources + downstream brands have obvious advantages and the company’s stable operation. If the original team realizes holding, it will further improve the company’s management and operation efficiency.
The profit forecast for 2019-2021 is expected to be EPS 0.
48. The investment rating of Buy-A is given with a target price of 9.
50 yuan, corresponding to 25xPE in 2019.
Risk reminder: the progress of equity changes is less than expected, unexpected events (natural disasters, wars, epidemics, politics) affect the flow of outbound tourists, the decline in currency exchange rates reduces the demand for outbound tourism, and integration is less than expected