Investment Rating - The report initiates coverage with a "Buy" rating for Meilan Airport, setting a target price of HKD 13.80, representing an expected upside of 89.3% from the current price of HKD 7.29 [2][6]. Core Insights - Meilan Airport is positioned as the only major airport in Hainan capable of releasing capacity, benefiting from the increase in passenger flow and the advantages of the Free Trade Port [4][5]. - The report indicates that the pressure period for the company has passed, with 2024 expected to be a turning point for performance, as key pressure factors have been fully released [4]. - The duty-free business is expected to benefit from both operational area and passenger flow, with potential for an increase in commission rates [4][5]. - The Free Trade Port in Hainan is projected to enhance retail and duty-free sales, with the duty-free market expected to reach HKD 800-900 billion by 2026 [5][27][28]. Company Overview - Meilan International Airport Co., Ltd. operates the Haikou Meilan Airport, focusing on both aviation and non-aviation businesses, including duty-free retail and other commercial activities [11][12]. - The airport has a designed capacity to handle 35 million passengers annually by 2025, with significant expansions completed in recent years [11][17]. Financial Performance - The report outlines a recovery in passenger throughput, with 2023 figures reaching 24.34 million, rebounding from the pandemic's impact [18][19]. - Historical financial performance shows fluctuations, with net profits recorded at -1.34 billion in 2020, followed by a recovery to 765 million in 2021 [18][19]. Future Outlook - The report emphasizes the strategic importance of Hainan's Free Trade Port, which aims to enhance the region's attractiveness for tourism and commerce, with significant policy support from the government [27][29]. - The anticipated full operation of the Free Trade Port by 2025 is expected to create a larger retail market, benefiting both conventional retail and duty-free sectors [28][29].

Financial Performance - For the six months ended June 30, 2023, total revenue reached RMB 1,065,947, an increase of 71.20% compared to the same period in 2022[9]. - The net loss attributable to shareholders was RMB 50,620, representing a significant increase of 329.42% from a net loss of RMB 11,788 in the corresponding period of 2022[9]. - Loss per share was RMB 0.11, compared to RMB 0.02 in the same period last year, reflecting a 450.00% increase in loss per share[7]. - EBITDA for the period was RMB 445,022, an increase of 85.08% compared to RMB 240,447 in the previous year[7]. - The total revenue from aviation business for the six months ended June 30, 2023, was RMB 494,404,533, representing an increase of 132.47% compared to the same period in 2022[59]. - The Group's non-aviation business revenue was RMB 571,542,433, reflecting a year-on-year increase of 39.41%[61]. - The company reported a total comprehensive loss of RMB 56,425,480 for the six months ended June 30, 2023, compared to RMB 25,467,996 in 2022, indicating an increase of about 121.5%[159]. Cash Flow and Liquidity - Net operating cash flow improved to RMB 238,529, an increase of 24.88% from RMB 191,012 in the previous year[7]. - The net cash inflow from operating activities for the six months ended June 30, 2023, was RMB 238.53 million, representing a year-on-year increase of 24.88%[75]. - The net cash outflow for investment activities during the same period was RMB 176.31 million, a year-on-year increase of 79.43% due to payments for the Phase II Expansion Project[75]. - The net cash inflow from financing activities was RMB 110.70 million, reflecting a year-on-year increase of 176.31% attributed to new working capital loans[75]. - Cash and cash equivalents at the end of the period stood at RMB 292.3 million, up from RMB 125.1 million at the end of the previous year[164]. Assets and Liabilities - Total assets as of June 30, 2023, were RMB 12,069,366, a 13.44% increase from RMB 10,639,551 at the end of 2022[8]. - Total liabilities increased by 23.84% to RMB 7,719,271 from RMB 6,233,031 at the end of 2022[8]. - Shareholders' equity decreased slightly by 1.28% to RMB 4,350,095 from RMB 4,406,520 at the end of 2022[8]. - As of June 30, 2023, total current liabilities amounted to approximately RMB 6.45 billion, exceeding current assets by approximately RMB 5.68 billion[179]. - The current ratio improved to 11.90%, up from 8.00% at the end of 2022, indicating better short-term financial health[8]. Operational Highlights - The aviation market showed significant recovery in the first half of 2023, with Meilan Airport establishing 203 departure routes, including 188 domestic routes, a year-on-year increase of 18 routes[54]. - Meilan Airport's peak hour capacity has been increased from 30 flights per hour to 40 flights per hour, effective from June 25, 2023[51]. - The number of duty-free shoppers in Hainan reached approximately 3.7334 million, marking a significant year-on-year increase of 45.39%[46]. - The total transportation turnover in the civil aviation industry reached 53.13 billion ton-kilometers, with passenger traffic of 284 million, and cargo/mail transportation of 3.276 million tons, representing 84.6%, 88.2%, and 93.1% of the levels in the same period of 2019, respectively[13]. Strategic Initiatives - The Group aims to enhance service quality and operational efficiency at Meilan Airport, aligning with the CAAC's objectives of "Safe Development" and "Smart Civil Aviation"[15]. - The establishment of Boao Dongyu Island Resort as a National Tourism Resort is a significant step in transforming Hainan's tourism industry from sightseeing to leisure vacation[17]. - The Hainan Tourism Development Research Institute was launched to focus on high-quality development of Hainan's tourism industry and the construction of international tourism consumption centers[19]. - The Group will continue to follow the CAAC's requirements to improve the overall systematization, synergy, and safety of smart civil aviation construction[14]. Governance and Compliance - The company has established a series of corporate governance systems to continuously improve its governance structure[146]. - The board believes that the current structure of having Mr. Wang Hong serve as both chairman and president allows for consistent leadership and efficient strategic planning[146]. - The company will continue to enhance transparency to shareholders and improve corporate governance[146]. - The Audit Committee reviewed the interim results and unaudited condensed consolidated interim financial information for the six months ended June 30, 2023[138]. Market and Economic Outlook - The overall operation of the Chinese economy has shown a recovery trend, with market demand gradually recovering and production and supply continuing to increase[47]. - The company is expected to face pressure in the second half of 2023 due to a complex external environment, but the long-term positive fundamentals of the domestic economy remain unchanged[112]. - The overall economic recovery in China is expected to continue, supported by the accumulation of positive factors for development[112].

Financial Performance - Total revenue for the six months ended June 30, 2023, was RMB 1,065.95 million, a 71.4% increase from RMB 622.63 million for the same period in 2022[2] - Aviation business revenue reached RMB 494.40 million, up from RMB 212.67 million, representing a 132.5% increase year-on-year[2] - Non-aviation business revenue was RMB 571.55 million, compared to RMB 409.96 million, marking a 39.2% increase[2] - The net loss attributable to shareholders was RMB 50.62 million, compared to a net loss of RMB 11.79 million for the same period in 2022[2] - The company reported a basic loss per share of RMB 0.11, compared to RMB 0.02 for the same period in 2022[7] - The company reported a significant increase in operating revenue for the first half of 2023, totaling RMB 1,065,946,966, compared to RMB 622,633,880 in the same period of 2022, reflecting a growth of approximately 71.4%[16] - The net loss attributable to shareholders for the same period was RMB 50,620,355, compared to a net loss of RMB 11,788,124 in the prior year[26] Operational Metrics - Passenger throughput reached 12.05 million, a significant increase from 6.56 million in the same period last year, reflecting an 83.5% growth[2] - Aircraft takeoffs and landings totaled 85,367, up from 58,631, indicating a 45.5% increase[2] - Cargo and mail throughput was 93,077.90 tons, compared to 74,186.50 tons, representing a 25.5% increase[2] - The total passenger throughput for Meilan Airport reached 12.048 million, an increase of 83.62% compared to 6.5613 million in the same period last year[46] - In the first half of 2023, Meilan Airport opened 203 flight routes, including 188 domestic routes (an increase of 18) and 10 international routes, with a total of 130 cities served[44] Financial Position - Cash and cash equivalents as of June 30, 2023, were RMB 292.34 million, up from RMB 119.43 million at the end of 2022[8] - Total assets increased to RMB 12,069.37 million from RMB 10,639.55 million, reflecting a growth of 13.4%[8] - As of June 30, 2023, the company's current liabilities totaled RMB 6.45 billion, an increase from RMB 6.00 billion as of December 31, 2022, representing an increase of approximately 7.5%[9] - The company's total liabilities increased to RMB 7.72 billion from RMB 6.23 billion, reflecting a growth of approximately 23.9%[9] - The company's total equity decreased to RMB 4.35 billion from RMB 4.41 billion, a decline of about 1.4%[9] Debt and Liabilities - The company's short-term borrowings rose to RMB 300 million from RMB 100 million, indicating a significant increase of 200%[9] - The company has outstanding loans related to the Phase II expansion project amounting to RMB 1.22 billion[11] - The company has drawn down RMB 5.18 billion of a total RMB 7.8 billion syndicated loan for the Phase II expansion project[12] - The group's total borrowings amounted to approximately RMB 3,847,259,992, with cash and cash equivalents of about RMB 292,336,791 as of June 30, 2023[57] Expansion Projects - The company is jointly constructing the Phase II expansion project with Haikou Meilan, which has faced significant financial difficulties, raising concerns about the company's ongoing viability[13] - The company has secured a local government special bond quota of RMB 700 million for the second phase expansion project, with RMB 90 million disbursed as of August 2023[14] - The Hainan Ring Island Tourism Road project has completed RMB 11.23 billion in investments, accounting for 72% of the total budget, with full completion expected by December 2023[32] Tourism and Market Trends - Hainan Province received 46.07 million domestic and international tourists in the first half of 2023, a year-on-year increase of 32.8%[29] - Total tourism revenue in Hainan reached approximately RMB 91.61 billion, representing a year-on-year increase of 42.4%[29] - The Hainan International Duty-Free City project includes the world's largest single-duty-free store, with a construction area of approximately 289,000 square meters, and additional commercial projects expected to be completed within the year[32] - The Hainan duty-free market is experiencing a resurgence, becoming a key channel for attracting international consumer spending back to the region[37] Corporate Governance - The board of directors does not recommend the payment of an interim dividend for the six months ending June 30, 2023, due to significant capital needs for ongoing expansion projects[85] - The company has adopted a code of conduct for securities transactions by directors and supervisors that meets or exceeds the standards set by the relevant guidelines[101] - The company is committed to complying with all regulations from the China Securities Regulatory Commission and the Hong Kong Stock Exchange, continuously improving its corporate governance structure[102] Risk Management - The group is actively managing risks and internal controls to create a risk-controlled and compliant operational environment[72] - The group faces interest rate risk primarily from long-term borrowings and long-term payables, with floating rate financial liabilities increasing cash flow interest rate risk[66] - The company is facing arbitration related to a subscription agreement for 200 million new H-shares, initiated by Aero Infrastructure Holding Company Limited[86]

Financial Performance - Total revenue for the year ended December 31, 2022, was RMB 1,141.46 million, a decrease of 29% from RMB 1,605.71 million in 2021[2]. - The company reported a net loss attributable to shareholders of RMB 155.30 million, compared to a profit of RMB 765.13 million in 2021[2]. - The company reported a net loss of approximately RMB 190 million for the fiscal year 2022[10]. - In 2022, the company reported a net loss attributable to ordinary shareholders of RMB (155,298,891), compared to a profit of RMB 765,131,573 in 2021, resulting in a basic loss per share of (0.33) RMB[23]. - The company recorded a net profit attributable to shareholders of approximately RMB 260 million in 2022, despite operational losses due to the pandemic[48]. Revenue Breakdown - Aviation business revenue was RMB 361.14 million, down 30.4% from RMB 518.58 million in the previous year[2]. - Non-aviation business revenue decreased to RMB 780.32 million, a decline of 28.2% from RMB 1,087.13 million in 2021[2]. - Non-aeronautical revenue, including franchise income, hotel income, and rental income, totaled RMB 780.3 million in 2022, down from RMB 1,087.1 million in 2021[17]. - The revenue from franchise rights totaled RMB 453,939,102, a decrease of 32.04% due to reduced passenger throughput affecting sales at duty-free shops[33]. - Hotel revenue was RMB 71,931,611, down 21.07%, attributed to decreased passenger throughput leading to lower occupancy rates[34]. - Rental income increased by 8.54% to RMB 70,150,817, mainly due to new lease contracts from the Phase II expansion project[35]. Operational Metrics - Passenger throughput reached 11.16 million, reflecting a significant decrease compared to previous periods[2]. - The number of aircraft movements was 105,675, indicating a reduction in operational activity[2]. - Cargo and mail throughput was 124,372.70 tons, showing a decline from prior year figures[2]. - In 2022, the total passenger throughput was 1,116.22 million, a decrease of 36.29% compared to 2021[29]. - The total revenue from aviation business was RMB 361,136,944, down 30.36% year-on-year, primarily due to the impact of the pandemic[29]. Assets and Liabilities - Total current assets decreased to RMB 480.01 million from RMB 622.58 million in 2021, indicating a liquidity contraction[6]. - Non-current assets totaled RMB 10,159.55 million, down from RMB 10,512.77 million in the previous year[6]. - As of December 31, 2022, the company's current liabilities amounted to approximately RMB 6.0 billion, exceeding current assets of approximately RMB 5.52 billion[10]. - The total liabilities were reported at RMB 6.23 billion, while total equity was RMB 4.41 billion[12]. - The total assets as of December 31, 2022, were RMB 10,639,551,304, a decrease of 4.45% from the previous year[38]. Cash Flow - The net cash inflow from operating activities was RMB 174,041,584, a decrease of 78.99% year-on-year due to reduced airline business volume at Meilan Airport caused by the pandemic[42]. - The net cash outflow from investing activities in 2022 was RMB 106,215,926, primarily for payments related to the Phase II expansion project[42]. - The net cash outflow from financing activities in 2022 was RMB 125,860,945, mainly due to loan interest repayments[42]. Debt and Financing - The company has a syndicated loan of RMB 7.8 billion for the Phase II expansion project, with RMB 5.18 billion disbursed as of December 31, 2022[11]. - The outstanding syndicated loan balance as of December 31, 2022, was RMB 1.94 billion, with an additional RMB 3.20 billion related to a joint repayment commitment[83]. - The company has obtained a syndicated loan agreement allowing it to continue operations without requiring early repayment of outstanding loans totaling RMB 19.4 billion and RMB 32.0 billion from Haikou Meilan[14]. Operational Challenges - The company is facing significant uncertainty regarding its ability to continue as a going concern[13]. - Passenger throughput at Meilan Airport significantly decreased compared to the fiscal year 2021 due to the impact of COVID-19[12]. - The second phase expansion project of Meilan Airport has been operational for one year, but the full potential has not been realized due to the negative impact of the pandemic on passenger and cargo throughput[61]. Future Plans and Strategies - The company plans to implement various measures to match capacity with market demand, including optimizing operations at Meilan Airport and expediting the leasing and renovation of duty-free shops[14]. - The company aims to expedite the preparation and construction of the Meilan Airport's second terminal, targeting completion by the end of 2023 to support the Hainan Free Trade Port policy[62]. - The company will continue to restore international and regional passenger flight routes, actively communicating with airlines to implement the seventh freedom rights policy[62]. - The company plans to enhance its core risk management mechanisms and improve safety protocols, ensuring effective implementation of regulations and enhancing public safety management at Meilan Airport[63]. Governance and Compliance - The company has adopted a code of conduct for directors and supervisors that meets or exceeds the standards set by the relevant guidelines[85]. - The board of directors includes four independent non-executive directors as of December 31, 2022[84]. - The company is committed to complying with all regulations set by the China Securities Regulatory Commission and the Hong Kong Stock Exchange[86]. - The chairman and CEO roles are held by the same individual, which deviates from the corporate governance code, but the board believes this arrangement ensures effective leadership[86].

Awards and Recognition - The company achieved a significant milestone by being awarded "Best Airport in the Asia-Pacific Region in 2020 (15–25 Million Passengers)" by Airport Council International (ACI) [6] - The company has received the "2021 Best Regional Airport in China" award from SKYTRAX, highlighting its operational excellence [6] - Meilan Airport was awarded "Best Airport in the Asia-Pacific Region in 2020" by Airport Service Quality (ASQ) and ranked 29th in the SKYTRAX Top 100 World Airports in 2021 [152] Financial Performance - Revenue for 2021 reached RMB 1,605,712, an increase of 17.25% compared to RMB 1,369,532 in 2020 [11] - Net profit attributable to shareholders was RMB 765,132, a significant recovery from a loss of RMB 1,340,376 in 2020, representing a change of -157.08% [11] - Earnings per share improved to RMB 1.62 from a loss of RMB 2.83 in the previous year, marking a change of -157.24% [11] - Net cash generated from operating activities increased by 78.50% to RMB 828,186 from RMB 463,971 in 2020 [11] - The Group's profit after tax was RMB 755,551,347, a turnaround from a net loss of RMB 1,342,073,208 in 2020 [27] - The Group's total revenue reached RMB 1,605,712,250, an increase of 17.25% compared to 2020 [26] - Revenue from aviation business amounted to RMB 518,579,390, reflecting a year-on-year increase of 12.00% [26] - Non-aviation business revenue was RMB 1,087,132,860, representing a significant increase of 19.92% from the previous year [26] Passenger and Cargo Statistics - Passenger throughput for 2021 was 1,751.97 million, a growth of 6.24% from 1,649.02 million in 2020 [18] - Domestic passenger throughput increased by 7.15% to 1,751.97 million, while international and regional passenger throughput dropped by 100% to 0.00 million [18] - The cargo volume increased by 10.14% to 148,378.70 tons in 2021 [32] - International and regional cargo throughput surged by 857.55% to 7,337.70 tons, compared to 766.30 tons in 2020 [137] Business Strategy and Expansion - The company aims to expand its domestic and overseas business, positioning itself as a leading comprehensive service provider for airport investment, operation, and management [4] - The company is committed to building an international aviation hub airport facing the Pacific and Indian Oceans [4] - The Phase II Expansion Project was officially put into operation on December 2, 2021, enhancing Meilan Airport's capacity to accommodate 35 million passengers and 400,000 tons of cargo annually [37] - The Phase III Expansion Project of Meilan Airport will be promoted to alleviate development bottlenecks and open up future growth opportunities [68] Operational Improvements and Innovations - The Phase II Expansion Project incorporates new technologies such as facial recognition and self-service baggage tracking to enhance passenger experience [39] - The establishment of the Meilan Airport Intelligent Epidemic Prevention System in November 2021 transitioned health status verification from manual to AI-based [51] - The baggage sorting speed at Meilan Airport can reach 4,000 pieces per hour, greatly enhancing sorting efficiency [52] - The introduction of intelligent access gate systems and online payment procedures in the parking buildings has significantly improved traffic efficiency [53] Governance and Management - The company has a robust governance structure with various committees overseeing audit, remuneration, nomination, and strategic initiatives [8] - The Board has developed and reviewed the company's policies and practices on corporate governance, fulfilling its responsibilities for the year ended December 31, 2021 [200] - The company has complied with all rules prescribed by the China Securities Regulatory Commission and the Hong Kong Stock Exchange, continuously improving its corporate governance structure [192] Economic and Market Context - The global economic recovery is expected to be constrained by the ongoing epidemic, impacting supply chains and inflation [54] - Hainan Province aims to prepare for the closed operation of the Hainan Free Trade Port and optimize trade and investment policies to enhance consumption quality and capacity [61] - The implementation of the RCEP Agreement will support enterprises in laying out international industrial chains [61] Tourism and Duty-Free Developments - In 2021, Hainan received 81.0043 million tourists, an increase of 25.5% year-over-year, reaching 97.5% of the 2019 levels [101] - The total revenue from tourism in Hainan was approximately RMB 138.434 billion, reflecting a 58.6% increase compared to the previous year and a 30.9% increase over 2019 [101] - Hainan's offshore duty-free shopping amounted to approximately RMB 49.47 billion, with a year-on-year increase of 80% [124] Employee and Workforce Development - As of December 31, 2021, the Group had a total of 1,153 employees, representing a year-on-year increase of 102 employees due to the Phase II Expansion Project [177] - The Group's pension contribution for the year ended December 31, 2021, was approximately RMB 27,068,457, a significant increase from RMB 7,326,704 in 2020 [181] - The Company conducted 434 epidemic prevention trainings for all employees, with a total of 31,284 participants, averaging 27 trainings per capita [177]

Financial Performance - For the six months ended June 30, 2021, the Group's total revenue was RMB 893,983,277, representing an increase of 46.92% compared to the same period in 2020[17]. - Net profit attributable to shareholders for the same period was RMB 345,356,411, reflecting a significant increase of 333.83% year-on-year[17]. - Earnings per share for the first half of 2021 was RMB 0.73, compared to RMB 0.17 in the corresponding period of 2020, marking a growth of 329.41%[17]. - Revenue from aviation business for the six months ended June 30, 2021, was RMB 284,923,818, reflecting a 51.54% increase from the corresponding period of 2020[68]. - Non-aviation business revenue for the same period was RMB 609,059,459, representing a 44.85% increase compared to the previous year[70]. - The total profit for the six months was RMB 411,509,314, compared to RMB 113,408,214 in the same period last year, indicating a growth of approximately 263%[183]. - Total comprehensive income for the six months was RMB 349,475,325, up from RMB 86,875,498 in 2020, marking an increase of around 302%[184]. Cash Flow and Liquidity - The Group's net cash inflow from operating activities for the first half of 2021 was RMB 406,313,421, representing a year-on-year increase of 37.96% due to significant growth in the aviation business[97]. - Cash inflows from operating activities for the six months ended June 30, 2021, totaled RMB 1,039,764,962, a significant increase from RMB 730,717,400 in the same period of 2020, representing an increase of approximately 42.3%[187]. - Cash and cash equivalents at the end of the period stood at RMB 516,525,634, down from RMB 731,734,186 at the end of June 2020, showing a decrease of about 29.4%[188]. - The net cash outflow for financing activities was RMB 59,087,892, reflecting a year-on-year increase of 12.89% mainly due to the repayment of matured debts[101]. - The Group's cash and cash equivalents were approximately RMB 516,525,634 as of June 30, 2021[93]. Assets and Liabilities - Total assets as of June 30, 2021, were RMB 11,433,122,000, up by 3.21% from RMB 11,077,488,000 at the end of 2020[16]. - Total liabilities stood at RMB 7,273,129,000, showing a slight increase of 0.08% from RMB 7,266,970,000[16]. - The Group's total borrowings amounted to approximately RMB 2,399,059,620 as of June 30, 2021, with a gearing ratio (net liabilities/total capital) of 31.15%[93]. - The Group's total equity attributable to shareholders increased to RMB 4,113,812,229 as of June 30, 2021, up from RMB 3,768,455,818 at the end of 2020, reflecting a growth of 9.1%[180]. Operational Highlights - The civil aviation industry in China saw a recovery with a 66.4% increase in passenger numbers year-on-year, reaching 245 million passengers[18]. - The air traffic control system guaranteed 4.33 million flights, a year-on-year increase of 48.86%, returning to pre-epidemic levels[25]. - The number of aircraft takeoffs and landings increased by 47.43% to 74,940 flights compared to 50,830 flights in the first half of 2020[67]. - In the first half of 2021, Meilan Airport operated a total of 209 originating routes, including 200 domestic routes, representing a year-on-year increase of 24 routes[63]. Tourism and Economic Impact - The total number of domestic and foreign tourists received in Hainan Province was 43.211 million, representing a year-on-year increase of 119.70%[28]. - The total revenue from tourism in Hainan Province was approximately RMB 81.978 billion, reflecting a year-on-year increase of 260.10%[28]. - Hainan Province plans to invest over RMB 220 billion in transportation infrastructure, significantly improving the competitiveness of its gateway hub[40]. Safety and Compliance - In the first half of 2021, the company reported zero bird strikes recognized by the CAAC, representing a year-on-year decrease of 100%[132]. - There were no unsafe incidents, including aircraft scratching or illegal runway intrusions, at Meilan Airport in the first half of 2021[133]. - The company has implemented a special monitoring plan for bird control as part of its major safety risk management strategy[132]. Corporate Governance - The company has complied with all rules set by the China Securities Regulatory Commission and the Hong Kong Stock Exchange, ensuring adherence to corporate governance standards[174]. - The company aims to enhance transparency to shareholders and improve corporate governance practices[174]. - The term of office for certain directors has expired, and the company is in the process of re-election, ensuring compliance with governance codes[174].

Company Recognition and Awards - The company achieved "SKYTRAX Five-star Airport" recognition, ranking 38th in the World's Top 100 Airports of SKYTRAX[9] - Major awards received in 2020 include being named one of the "Top 100 Enterprises of Hainan Province"[9] - The company has been recognized as an advanced collective for major civil aviation transportation work in 2019[9] - Meilan Airport was awarded SKYTRAX Five-star Airport for the third consecutive year in 2020, ranking seventh among the "SKYTRAX Global Best Airports with 20–30 Million Passengers"[147] - The company received 26 awards at provincial and ministerial levels in 2020, including 7 international awards and 11 national awards[118] Business Operations and Strategy - The company is engaged in both aeronautical and non-aeronautical businesses, including terminal facilities, ground handling services, and leasing of commercial spaces[8] - The company aims to expand its domestic and overseas business, positioning itself as a leading comprehensive service provider for airport investment and management[4] - The company has adjusted its strategic layout to align with national initiatives such as the "Marine Power Construction" and the Hainan Free Trade Port[5] - The company operates under a foreign invested joint stock structure since November 6, 2003[7] - The company plans to carry out necessary capital operation plans according to its development needs[4] Financial Performance - Revenue for 2020 was RMB 1,369,532, a decrease of 13.12% from RMB 1,576,371 in 2019[13] - Gross profit for 2020 was RMB 678,662, down 17.74% from RMB 825,018 in 2019[13] - Net loss attributable to shareholders for 2020 was RMB (1,340,376), compared to a profit of RMB 575,413 in 2019, representing a change of -332.94%[13] - EBITDA for 2020 was RMB (1,116,645), a decline of 215.16% from RMB 969,660 in 2019[13] - Total assets as of December 31, 2020, were RMB 11,077,488, down from RMB 11,456,163 in 2019[17] - Total liabilities increased to RMB 7,266,970 in 2020 from RMB 6,303,572 in 2019[17] - Total equity decreased to RMB 3,810,518 in 2020 from RMB 5,152,591 in 2019[17] - Current ratio dropped to 10% in 2020 from 40% in 2019, indicating a significant decline in liquidity[13] - Gearing ratio increased to 65.60% in 2020 from 55.02% in 2019, reflecting higher financial leverage[13] - Net cash generated from operating activities was RMB 463,971, a decrease of 44.19% from RMB 831,278 in 2019[13] Passenger and Cargo Statistics - The annual passenger throughput of the Group reached 16.4902 million, a decline of 31.91% compared to 2019[26] - The passenger throughput for domestic flights was 16.35 million, down 28.34% from 2019[26] - International and regional passenger throughput dropped to 140,200, a decrease of 90.00% compared to 2019[26] - Aircraft takeoff and landing (flights) totaled 129,726, a decrease of 21.28% from 2019[26] - Cargo and mail volume was 222,373.50 tons, down 31.02% from 2019[26] Non-Aviation Business Performance - Revenue from non-aviation business reached RMB 906,526,616, an increase of 4.56% compared to 2019[27] - The non-aviation business achieved annual revenue of RMB 906,526,616, marking a year-on-year increase of 4.56% and accounting for 66.19% of the Group's total revenue[37] - Franchise income for the Group reached RMB 558,722,588, reflecting a year-on-year increase of 35.35%[39] - Hotel income decreased by 16.54% year-on-year to RMB 84,502,051, while rental income saw a significant decline of 65.97% to RMB 25,450,351[39] Expansion and Infrastructure Development - The Phase II Expansion Project of Meilan Airport was successfully completed by the end of 2020, with ongoing construction of supporting projects such as roads and a new control tower[41] - The Phase II Expansion Project aims to enhance Hainan's connectivity with global cities and establish it as a regional aviation hub facing the Pacific and Indian Oceans[41] - The terminal complex project at Meilan Airport has a gross floor area of 315,300 sq.m., featuring a commercial building, hotel, Ground Traffic Center, and parking building[42] - The construction of the Airport Operations Control Centre (AOCC) was completed, integrating the airport's information systems and establishing a big data technical framework[49][50] Safety and Health Measures - In response to the epidemic, the Group adopted intelligent measures including a military-grade infrared thermal imaging system for non-contact temperature checks and intelligent disinfection robots[47][48] - Meilan Airport established an epidemic prevention and control headquarters early in the outbreak, implementing various measures to ensure safety and mobilize employees effectively[140] - The airport's management team has made significant adjustments to food service protocols to ensure hygiene and safety during the Epidemic[73] Future Plans and Strategic Goals - In 2021, Hainan Province aims to build a "1+N" transportation planning system to support the construction of Hainan Free Trade Port, with Meilan Airport promoting its phase III expansion project[56] - The Group plans to optimize the business environment and attract foreign investment to stabilize growth, while implementing offshore duty-free policies[57] - The Group aims to leverage favorable policies to enhance its role as a regional aviation gateway and hub facing the Pacific and Indian Oceans[56] - The Group will actively promote the Phase II Expansion Project to enhance operational capacity and remove bottlenecks, aiming for a significant increase in flight operations[61] Corporate Governance and Compliance - The Company has complied with all rules prescribed by the CSRC and the Hong Kong Stock Exchange, continuously improving its corporate governance structure[187] - The Board comprises eleven Directors, including five executive Directors, two non-executive Directors, and four independent non-executive Directors[198] - The Company confirmed that all Directors and Supervisors complied with the required standards for securities transactions during the year ended 31 December 2020[197] - The Company aims to enhance transparency to shareholders and improve corporate governance practices[189] Economic and Market Conditions - The economic recovery remains unstable globally, with various risks from the epidemic expected to continue affecting economic stability[51][53] - The year 2021 marks the beginning of China's "14th Five-Year" Plan, focusing on high-quality development and supply-side structural reform[52][53] - Hainan Province's policies, including the promotion of the Hainan Free Trade Port, are expected to create more development opportunities for the Group[58] Duty-Free and Tourism Development - Hainan's offshore duty-free sales reached RMB27.48 billion in 2020, with a year-on-year increase of 103.7%[111] - The number of customers for offshore duty-free shopping in Hainan was 4,484,000, representing a year-on-year increase of 19.2%[111] - The new offshore duty-free policy allows a shopping quota of RMB100,000 per person per year, significantly increasing the types of duty-free commodities from 38 to 45[107] - The Haikou International Duty-free City project has a planned total investment of approximately RMB 12.8 billion and is expected to be the largest duty-free shopping mall in Asia upon completion[94]

Financial Performance - Total revenue for the six months ended June 30, 2020, was RMB 608.5 million, a decrease of 25.21% compared to the same period in 2019[9]. - Net profit attributable to shareholders for the same period was RMB 79.6 million, representing a decrease of 71.09% year-on-year[9]. - Earnings per share for the first half of 2020 was RMB 0.17, down 70.69% from RMB 0.58 in the corresponding period of 2019[7]. - Gross profit for the six months ended June 30, 2020, was RMB 279.0 million, a decline of 36.72% compared to RMB 440.9 million in 2019[7]. - Net operating cash flow for the period was RMB 294.5 million, down 39.45% from RMB 486.4 million in the previous year[7]. - The Group's revenue from aviation business for the six months ended June 30, 2020, was RMB 188,020,153, a decrease of 49.43% compared to the corresponding period of 2019[51]. - Passenger service charges for the six months ended June 30, 2020, were RMB 91,250,299, down 50.85% year-on-year[52]. - Ground handling service income for the same period was RMB 60,313,982, a decrease of 48.54% compared to the previous year[52]. - The Group achieved a revenue from its non-aviation business of RMB 420,481,785, representing a decrease of 4.83% compared with the corresponding period of 2019[53]. - The company reported a credit impairment loss of RMB 53.6 million for the first half of 2020, compared to RMB 0.8 million in the same period of 2019[151]. - Other income for the six months ended June 30, 2020, was RMB 9.0 million, an increase from RMB 1.2 million in the same period of 2019[151]. - Financial expenses for the first half of 2020 were RMB 7.6 million, compared to RMB 4.1 million in the same period of 2019[151]. - The company recorded an investment loss of RMB 75.3 million for the first half of 2020, compared to RMB 21.4 million in the same period of 2019[151]. - The company’s total profit for the six months ended June 30, 2020, was RMB 113.4 million, a decrease of 70.1% from RMB 379.5 million in the same period of 2019[151]. Assets and Liabilities - Total assets as of June 30, 2020, increased by 4.93% to RMB 12.0 billion from RMB 11.5 billion at the end of 2019[8]. - Total liabilities rose by 7.56% to RMB 6.8 billion as of June 30, 2020, compared to RMB 6.3 billion at the end of 2019[8]. - Total equity increased by 1.70% to RMB 5.2 billion as of June 30, 2020, from RMB 5.2 billion at the end of 2019[8]. - Current ratio decreased to 18% from 40% year-on-year, indicating a decline in short-term financial health[8]. - Gearing ratio increased to 56.41% as of June 30, 2020, compared to 55.02% at the end of 2019, reflecting a slight increase in financial leverage[8]. - As of June 30, 2020, total current liabilities amounted to RMB 6,537,044,265, an increase of 27% from RMB 5,147,193,063 as of December 31, 2019[146]. - The company's total liabilities reached RMB 6,780,346,868, up from RMB 6,303,572,204 at the end of 2019, reflecting a growth of approximately 7.6%[146]. - Shareholders' equity attributable to the company increased to RMB 5,191,661,134 from RMB 5,108,831,964, representing a rise of 1.6%[148]. - Retained earnings as of June 30, 2020, were RMB 3,668,693,565, compared to RMB 3,589,087,273 at the end of 2019, indicating an increase of 2.2%[148]. - The total equity of the company reached RMB 5,240,299,165, up from RMB 5,152,590,734, marking an increase of 1.7%[148]. Operational Highlights - In the first half of 2020, China's civil aviation recorded a total traffic volume of 31.91 billion ton kilometers, representing 50.8% of the corresponding period last year[6]. - Passenger traffic volume reached 150 million passengers, which is 45.8% of the same period last year[6]. - Cargo and mail traffic volume was 2.997 million tons, representing 85.2% of the corresponding period last year[6]. - The Civil Aviation Administration of China (CAAC) issued a package of "16+8" policies to reduce airlines' annual burden by approximately RMB10 billion[6]. - The CAAC aims to achieve full-process baggage tracking for domestic routes with over 10 million annual passengers by the end of 2021[11]. - The CAAC's special campaign for "Civil Aviation Service Quality Brand Building" aims to stabilize flight punctuality rates above 80% throughout the year[12]. - In the first half of 2020, Meilan Airport operated a total of 243 originating routes, a year-on-year increase of 30 routes, including 214 domestic routes, 3 regional routes, and 26 international routes[47]. - The international and regional passenger throughput for the six months ended June 30, 2020, amounted to 139,600, representing a year-on-year decrease of 79.77%[48]. - Meilan Airport achieved significant recognition, winning 15 industry and provincial-level awards in the first half of 2020, including four international awards[38]. - The full-process passenger security project was put into trial operation in March 2020, introducing facial recognition check-in machines and security gates[39]. - The Group's aircraft takeoff and landing (flights) totaled 50,830, a decrease of 39.22% compared to 83,631 in the same period last year[51]. - The cargo and mail traffic throughput for the six months ended June 30, 2020, was 108,577.70 tons, down 39.30% from 178,875.30 tons in the previous year[51]. Tourism and Economic Impact - Hainan Province received 19.6643 million domestic and foreign tourists in the first half of 2020, a year-on-year decrease of 49.0%[15]. - Total revenue from tourism in Hainan was approximately RMB22.768 billion, representing a year-on-year decrease of 53.6%[15]. - The Plan for rejuvenating the tourism industry in Hainan includes thirty action measures to stimulate tourist consumption and activate market vitality[16]. - The construction of the Hainan Free Trade Port has been fully launched, with favorable policies including corporate and individual income tax adjustments and bonded aviation fuel refilling for flights[102]. - The Hainan Provincial Government implemented 8 measures to support small and medium-sized enterprises, 43 unconventional initiatives, and 30 measures to revitalize the tourism industry in response to economic challenges[102]. Expansion Projects - The Haikou International Duty-free City project, with a total investment of approximately RMB 12.86 billion, has commenced construction and is expected to be completed by the end of 2024, aiming to enhance Hainan's status as an international tourist consumption center[21]. - The Phase II Expansion Project of Meilan Airport is being expedited to support the construction of Hainan Free Trade Port and establish an international aviation hub[27]. - The company is jointly constructing the Meilan Airport Phase II Expansion Project with a total facility of RMB 7.8 billion, with an estimated capital expenditure of approximately RMB 7.65 billion[178]. - The construction fee payable related to the Phase II Expansion Project was approximately RMB 0.94 billion, with unrecognized capital commitments of approximately RMB 1.47 billion[179]. - The company is in discussions with the Hainan provincial government and shareholders to secure continuous funding for the Phase II Expansion Project[184]. Safety and Compliance - Meilan Airport reported a 52.84% year-on-year decrease in responsible bird strikes, with only 2 incidents in the first half of 2020[97]. - There were no unsafe incidents due to aircraft damage affecting safety operations at Meilan Airport during the first half of 2020[97]. - The company implemented a special monitoring plan for bird damage prevention measures, enhancing information management and statistics on bird strikes[97]. - The company focused on timely communication with the CAAC regarding migratory bird migration to control bird strike incidents[97]. - Overall, Meilan Airport took comprehensive measures to control core safety risks, ensuring stable operations[97]. - The Group is committed to implementing a "zero tolerance" policy for safety hazards and enhancing service quality in line with civil aviation authority requirements[105]. Corporate Governance - The Group actively conducted risk management and internal control assessments in the first half of 2020 to identify operational deficiencies[94]. - The Group plans to continue optimizing its risk management framework in the second half of 2020[96]. - The Company has established a series of corporate governance systems to continuously improve its governance structure[136]. - The Group aims to enhance corporate governance and transparency to shareholders, continuing to comply with the CG Code provisions[140]. - The Company has adopted a code of conduct regarding directors' and supervisors' securities transactions, complying with the Model Code[135]. Future Outlook - The outbreak of the pneumonia epidemic has adversely impacted the Group's revenue and operating cash inflow for 2020, indicating material uncertainty regarding the Group's ability to continue as a going concern[180]. - Significant uncertainty exists regarding the company's ability to continue as a going concern, dependent on obtaining confirmations from the loan syndicate and timely capital injections for the expansion project[188]. - The Group's enterprise income tax is levied at a reduced rate of 15% from January 1, 2020, to December 31, 2024, as per Hainan Free Trade Port policies[195]. - The Group is evaluating the ability to renew or extend loans before maturity to support future operations[191].

Financial Performance - The company reported a total revenue increase of 15% year-on-year, reaching approximately CNY 1.2 billion in 2019[6]. - Total revenue for 2019 was RMB 1,576,371,078, a decrease of 7.48% compared to 2018[35]. - Revenue from aviation business amounted to RMB 709,389,882, representing a decrease of 22.48% compared to 2018[35]. - Revenue from non-aviation business reached RMB 866,981,196, an increase of 9.92% compared to 2018[35]. - Gross profit for 2019 was RMB 825,018, a decline of 13.81% from RMB 957,176 in 2018[19]. - Net profit attributable to shareholders was RMB 575,413, down 7.50% from RMB 622,041 in 2018[19]. - The management has set a performance guidance of 10-15% revenue growth for the upcoming fiscal year[6]. Passenger and Cargo Traffic - Passenger traffic at Meilan Airport increased by 10% compared to the previous year, totaling 12 million passengers in 2019[6]. - Passenger throughput reached a record high of 24.2166 million, a slight increase of 0.39% from 2018[34]. - International and regional passenger numbers increased by 22.03%, reaching 1.4015 million[25]. - The total flight take-offs and landings reached 164,786, while cargo and mail volume was 322,357.50 tons, reflecting a decline of 0.24% and 0.72% year-on-year, respectively[44]. - The company is actively pursuing strategic partnerships to enhance its cargo handling services, aiming for a 25% increase in cargo volume by 2021[6]. Business Expansion and Development Plans - The company plans to expand its non-aeronautical business, targeting a 20% growth in commercial leasing revenue over the next fiscal year[6]. - The company aims to enhance its market presence by exploring potential acquisitions in the aviation sector within the next two years[6]. - The Phase II Expansion Project is nearing completion, with various preparations for acceptance underway, aiming to integrate multiple transportation modes and enhance operational capacity[53][56]. - The company has allocated CNY 300 million for new technology development in airport operations and customer service enhancements[6]. - The company plans to issue up to 200,000,000 new H shares, with the validity period extended to June 25, 2020[77]. Awards and Recognition - The company achieved a significant milestone by being recognized as a "SKYTRAX five-star Airport" in 2019[8]. - The company received the "Outstanding Corporation of Social Responsibility Award 2019," reflecting its commitment to community engagement and environmental sustainability[8]. Infrastructure and Technology - The terminal complex project at Meilan Airport has a gross floor area of 315,300 sq.m, integrating various business functions including commercial, hotel, and transportation services[60]. - The terminal complex's Ground Traffic Center integrates multiple transportation modes, providing efficient access to Haikou's suburbs and attractions within 3 minutes[61]. - Meilan Airport has implemented the "Airport 3.0" intelligent travel information service platform at 135 points, becoming the first airport globally to fully realize intelligent pre-boarding services based on big data[79]. - The security full process optimization project at Meilan Airport was recognized as a benchmark project by the CAAC, enhancing operational efficiency[80]. - The company is focused on integrating advanced technologies such as big data and AI to build a smart airport management system[78]. Economic and Market Outlook - Economic downside risks are expected to continue affecting global economic stability and development in 2020[81]. - The Group expects a significant decline in main business figures in 2020 due to the impact of the COVID-19 epidemic[89]. - The Group plans to expand the aviation market and enhance cooperation with domestic and foreign airports to tap potential resources[96]. Tourism and Local Development - In 2019, Hainan Province received 83,112,000 tourists, representing a year-on-year growth of 9%[143]. - Total revenue from the tourism industry reached RMB 105.78 billion, reflecting a year-on-year growth of 11.3%[143]. - The offshore duty-free market in Hainan is expected to drive the development of the tourism industry, enhancing overall growth prospects[160]. - The government will support duty-free enterprises in conducting promotional activities to sustain growth in duty-free goods consumption through discounts and themed marketing[184]. Safety and Compliance - The Group achieved 21 years of safety operation since its opening, complying with national safety action plans and successfully completing major events in 2019[185]. - The integration of civil aviation statutory self-inspection with safety operation systems will be promoted to enhance safety performance management[100]. - The Group will strengthen safety management and establish a long-term mechanism for safety personnel work style, enhancing the foundation of safety operations[103].

Financial Performance - Total revenue for the six months ended June 30, 2019, was RMB 813,636, representing a decrease of 12.17% compared to the same period in 2018[9]. - Net profit attributable to shareholders for the same period was RMB 275,345, a decrease of 25.95% compared to the corresponding period in 2018[9]. - Earnings per share for the six months ended June 30, 2019, was RMB 0.58, down from RMB 0.79 in the same period of 2018, reflecting a decline of 26.58%[7]. - Gross profit for the first half of 2019 was RMB 440,940, a decrease of 22.75% from RMB 570,818 in the previous year[7]. - Net operating cash flow for the period was RMB 486,381, down 48.42% from RMB 943,049 in the same period of 2018[7]. - Total revenue for the group was RMB 813,635,900, a decrease of 12.17% compared to the same period in 2018[12]. - Net profit attributable to shareholders was RMB 275,345,170, down 25.95% year-on-year[12]. - The total revenue from aviation business for the first half of 2019 was RMB 371,798,660, a decrease of 23.70% compared to the same period in 2018, primarily due to the cancellation of the recognition policy for the Civil Aviation Development Fund[54]. - Operating profit for the six months ended June 30, 2019, was RMB 379,496,845, a decline of 23.0% compared to RMB 492,732,198 in the same period of 2018[125]. - Total profit for the six months ended June 30, 2019, was RMB 379,528,242, down 23.1% from RMB 493,485,919 in 2018[125]. Assets and Liabilities - Total assets as of June 30, 2019, were RMB 8,935,458, an increase of 0.78% from RMB 8,866,141 at the end of 2018[8]. - Total liabilities decreased by 4.92% to RMB 4,083,121 as of June 30, 2019, compared to RMB 4,294,201 at the end of 2018[8]. - Total equity increased by 6.13% to RMB 4,852,337 as of June 30, 2019, from RMB 4,571,940 at the end of 2018[8]. - As of June 30, 2019, the Group's interest-bearing debts totaled approximately RMB 1,061,718,277, with cash and cash equivalents of approximately RMB 264,297,005[64]. - The Group's capital commitment as of June 30, 2019, was RMB 3,467,491,221, indicating a need for funds to support construction projects and settle debts[152]. Operational Highlights - Passenger traffic volume in the Chinese civil aviation industry increased by 8.5% year-on-year, reaching 320 million passengers[16]. - Total traffic volume recorded was 62.76 billion ton kilometers, an increase of 7.4% year-on-year[16]. - Flight punctuality rate improved to 80.35%, an increase of 0.83 percentage points year-on-year[16]. - The group plans to enhance airline capacity while ensuring safe operations in the second half of 2019[17]. - The number of wide-body passenger aircraft flights increased by over 25.80% year-on-year, while small aircraft flights decreased by 10.84% year-on-year[45]. Tourism and Duty-Free Shopping - Hainan Province received a total of 38.5698 million domestic and foreign tourists, reflecting a year-on-year growth of 6.0%[20]. - Total tourism revenue in Hainan reached RMB 49.062 billion, marking a year-on-year increase of 9.1%[20]. - In the first half of 2019, the total number of duty-free goods sold reached 8.9365 million, with sales amounting to RMB 6.582 billion, representing increases of 27.54% and 26.56% respectively compared to the same period last year[36]. - The offshore duty-free shopping policy has positively influenced the development of Hainan as an international tourist consumption center, contributing to local economic growth[33]. - The opening of new duty-free shops, including Haikou Riyue Square Duty-Free Shop and Qionghai Bo'ao Duty-Free Shop, has enhanced the offshore duty-free supply in Hainan[36]. Safety and Risk Management - The group has implemented a series of safety management training for 4,500 personnel to enhance operational safety[14]. - In the first half of 2019, Meilan Airport implemented various measures to control safety risks, resulting in no unsafe incidents due to aircraft damage[75]. - The company has focused on optimizing flight operation assurance standards and procedures to enhance the punctuality rate of flight releases[77]. - The company has established a specialized monitoring plan for bird strike prevention, including regular inspections and the involvement of wildlife professionals[76]. - The Company plans to further optimize its risk management framework and refine schemes in the second half of 2019 to ensure sustainable development[74]. Corporate Governance and Compliance - The company confirmed compliance with the Model Code for securities transactions by directors during the six months ended June 30, 2019[114]. - The company adhered to the Corporate Governance Code provisions during the reporting period, enhancing transparency to shareholders[115]. - The Audit Committee reviewed the interim report and discussed matters related to auditing, internal control, and financial reporting for the six months ended June 30, 2019[112]. - The company will continue to improve corporate governance and transparency to shareholders[117]. Future Outlook and Strategies - The company anticipates steady growth in annual passenger throughput, supported by the development of the Hainan Pilot Free Trade Zone and duty-free shopping policies for offshore tourists[83]. - Future strategies may focus on enhancing non-aviation revenue streams and optimizing operational efficiencies to counteract declines in certain areas[58]. - The company will implement strict operational management measures, including compliance training and process optimization, to enhance safety and service quality[84]. - The company aims to control costs and generate new income sources to maintain annual profit levels and provide returns to shareholders[84].