CYTS (600138): Revenue growth is in line with expectation, and profit contribution declines

Event: The company recently released its semi-annual report for 2019, reporting and realizing operating income58.

5.3 billion, an annual increase of 5.

13%; realize net profit attributable to shareholders of listed companies.

8.2 billion, down 5 every year.

61%; net profit after deduction to mother 2.

5.8 billion, a decrease of 15 per year.


Investment highlights: Revenue growth is in line with expectations, and upward expenses during the period have brought pressure on profit growth.

Reported that the major companies’ travel agency business, IT product sales and technical service business, integrated marketing business, attractions business and hotel business respectively achieved operating income.

6.2 billion (+6.

34%), 15.

2.8 billion (-0.

2%), 12.

1.0 billion (+10.

28%), 8.

3.5 billion (+6.

1%) and 2.

4.7 billion yuan (10.

76%), the growth of the income side was basically in line with expectations, and the travel agency business and integrated marketing business performed slightly better.

Due to the increase in labor costs, selling expenses and administrative expenses increased by 23 respectively.

21% and 16.

79%, the breakdown of sales expenses and management expenses breakdown, compensation and benefits in sales expenses increased by 30 compared with the same period last year.

89%, reaching 3.

At $ 32 trillion, salaries and benefits in management expenses increased over the same period last year.

1%; budgeted financial expenses have increased by 39 each year due to reported increases in loan size.


Taken together, the increase in costs during the period resulted in a decrease in the net interest rate by an average of 9 over the same period last year.

6%, the growth pressure on the profit side is under pressure.

The passenger flow in Wuzhen remained stable, and the revenue and profit of Gubei Water Town both fell.

Wuzhen attractions continue to build a “vacation-meeting-culture” town brand, create family-friendly travel related products in vacations, advertised in Wucun; continue to explore new customers and word of mouth in the exhibitions, successfully host the 2019 Huawei User Conference, 2019 Haier CentralAir conditioning, energy conservation and ecological interaction summits, etc .; cultural aspects continue to cultivate Wuzhen label cultural products, and export and spread culture through Wuzhen International Contemporary Art Invitational Exhibition.

In the first half of the year, Wuzhen Scenic Area received 445 tourists.

980,000 person-times, the same as the same period last year, and achieved operating income8.

$ 5.5 billion, an annual increase of 2.

60%, achieving a net profit of 4.

7.2 billion, unchanged from the same period last year, with a unit price of 191.

7 yuan, an increase of 3 over the same period last year.


Gubei Water Town received 100 tourists in the first half of the year due to increased competition pressure and traffic disturbance factors.680,000 person-times, a decrease of 8 per year.

81%, realized operating income4.

2 billion, down 8 every year.

04%, the net investment in real estate companies increased the impact of investment income reduction, net profit was only 65.45 million, a year-on-year decrease of 47.

23%, achieving a unit price of 417.

2 yuan, a slight increase of 0 compared with the same period last year.


The integrated marketing business continued to grow rapidly, and the new hotel stores dragged down profit growth.

The report summarizes the sales revenue 青岛夜网 of China Youth Union, a subsidiary of the integrated marketing business.

01 billion, an annual increase of 10.

29%, achieving a net profit of 2,119.

320,000 yuan, an annual increase of 18.

37%, successfully held a number of marketing activities such as the “Belt and Road” international cooperation summit forum, the Asian Civilization Dialogue Conference, the 2nd Digital China Construction Summit, and the 3rd World Smart Conference; in the field of public relations and communications, actively promoted customers in all sectorsAnd business development, control project and mid- and back-office costs, continuously optimize product systems, and explore product complementation and innovation in niche areas.

In terms of hotel business, the report reports that the high-level Shanshui Hotel innovates the cooperation model, expands the accommodation and expansion services of the Games, and signs the sole accommodation service operator of the 2nd National Youth Games, achieving stable growth in revenue and operating income.

$ 4.5 billion, an annual increase of 9.

75%, but affected by the opening of new stores and the growth of the industry, net profit fell 14.

27%, only 13.62 million yuan.

Maintain “Recommended Level”: We expect the company’s EPS to be 0 from 2019 to 2021.

85 yuan, 0.

92 yuan and 1.

00 yuan, corresponding to the current sustainable PE is 14 times, 13 times and 12 times.

Risk reminder: the risk that passenger traffic will not grow as expected, and the risk of macroeconomic downturn.