SA(SH:601021)2024-07-05 11:01Investment Rating - The report indicates a strong investment outlook for the company, highlighting a significant profit increase in the first quarter and a favorable market environment due to tourism recovery and visa-free policies [1][5]. Core Insights - The company has experienced a remarkable turnaround, with a net profit growth exceeding 100% in the first quarter, driven by the summer travel season and the implementation of visa-free policies [1]. - Spring Airlines, as the first low-cost airline in China, has a market share of 3.9% in the civil aviation sector, operating 121 Airbus A320 aircraft as of the end of 2023 [2]. - The company reported a total revenue of 17.9 billion yuan in 2023, a year-on-year increase of 114%, and a net profit of 2.26 billion yuan, marking a return to profitability [5]. Company Overview and Performance Changes - Spring Airlines specializes in domestic and international passenger and cargo transportation, with a focus on low-cost services [2]. - The company has resumed international routes to five countries, including Thailand and Japan, and has seen a significant increase in passenger turnover, with a 17.5% year-on-year growth in May [2][5]. - In the first quarter of 2024, the company achieved a net profit of 810 million yuan, a 127.5% increase compared to the previous year, making it the only airline listed that has shown positive profit growth compared to 2019 [5]. Market Dynamics - The report notes that the summer travel season has begun, leading to rising ticket prices and increased passenger capacity, with domestic load factors reaching 91.2% [9]. - The expansion of visa-free policies for tourists from various countries is expected to boost international travel, with inbound foreign visitors in Shanghai recovering to 69.4% of 2019 levels [9]. - The company is actively restoring routes to Southeast Asia and Japan, with flight volumes approaching pre-pandemic levels [10]. Shareholder Activity - There has been a noticeable decrease in the number of shareholders in the first quarter, indicating an increase in the average number of shares held per shareholder [11]. - The company has seen increased financing activity, with significant buy-ins reported recently [12].