Zhongxin Tourism (002707) 2019 Semi-annual Report Comment: The first half performance is still under pressure and optimistic about the second half of the recovery

Zhongxin Tourism (002707) 2019 Semi-annual Report Comment: The first half performance is still under pressure and optimistic about the second half of the recovery

Investment income at least reduced, leading to pressure in the first half of the year: 1H19 revenue 57.

19 billion / -1.

09%, net profit attributable to mother 1.

100 million / -20.

37%, deducting non-attributed net profit1.

09 billion / -6.

07%, EPS0.

13 yuan / share, a significant expansion of net profit attributable to mothers, which was not achieved this year due to last year’s achievements including the disposal of 24.48 million in investment income within the equity of Club Med.

Gross profit margin 10.

90% / + 0.

27pct; sales rate 6.

92% / + 0.

32pct, management fee rate 1.

30% / + 0.

07pct, financial rate 0.

39% / + 0.

2pct, due to the increase in loan interest expense and exchange gains in the current period.

Q2 revenue was 32.

8.9 billion / -1.

33%, net profit attributable to mother 0.

45 billion / -37.

60%, deducting non-net profit 0.

45 billion / -20.

02%.

The performance was mainly due to macroeconomic growth expectations, last year’s relatively high base and the Asian market has not yet recovered.

Gross profit margin 9.

14% /-0.

63 points.

Wholesale business skipped, opening stores to accelerate the expansion of retail layout: by business: 1) Outbound wholesale: 18-year revenue 42.

3.3 billion / -4.

68%, gross profit margin 8.

52% /-0.

12pct.

Among them, Zhuyuan International Travel Service (completed the consolidation of the remaining 30% equity of Zhuyuan in January 19) had a revenue of 21.

8.8 billion / -9.

2%, net profit is 0.

56 billion / -8.

2%;) Outbound retail: Expansion is accelerating. Based on the partnership system, 108 new stores were added, reaching 543. In the first half of the year, Hubei, Tianjin, Henan, Fujian and other provinces and cities were newly added, with revenue of 9.4.1 billion / + 4.

72%, gross margin 16.

29% /-1.

04 points.

3) Integrated marketing: revenue 3.

6.1 billion / + 10%, gross margin of 10.

35% / + 1.

33 points.

4) Revenue from domestic tourism and individual products1.

6.2 billion / + 52.

3%.

5) Income from other industries is 0.

22 billion / + 176.

42%, of which the scale of pre-layout business such as study tours, resettlement, and currency exchange has gradually emerged, becoming the company’s new business highlights and growth points.

Europe performed well, and the achievement of the low base effect rebounded in the second half of the year: Southeast Asia still showed a weak trend, and the revenue of the Asian market decreased by more than 10%, mainly because the Southeast Asian market has not fully recovered in the first half of 2019.improve.

The European market is doing well, with revenue growth 上海夜网论坛 across European destinations exceeding 10%.

The American market and the Australian market are affected by the Sino-US trade friction and the growth of free travel. The revenue scale has declined, but the overall scale is small and the impact is limited.

In 18 years, the company has gradually established landing service companies in Europe, Japan, the United States, Southeast Asia and other places. In 19 years, it accelerated the landing of retail networks in more provinces, and expanded the company’s wholesale business and product landing.

Earnings forecast: In the long run, there is ample room for grinding the overseas travel market, but considering the ongoing impact of the weak Southeast Asian market, we have slightly lowered the EPS for 19-21 to 0.

26/0.

29/0.

37 yuan, considering that the company’s assessment is still at the bottom and maintain the “overweight” rating.

Risk warning: Expected emergencies will lead to a decline in the outbound tourism boom, and retail business is lower than expected.