CYTS(SH:600138) GOLDEN SUN SECURITIES·2024-07-07 02:01Investment Rating - The report assigns a "Buy" rating for the company, indicating a positive outlook for investment [20][27]. Core Insights - The company, China Youth Travel Service (CYTS), is a leading comprehensive tourism service provider in China, with a diversified business model that includes travel agency services, scenic area operations, integrated marketing, hotel management, and strategic investments [20][52]. - The tourism industry is expected to experience steady growth, driven by the recovery of domestic and outbound tourism, with a notable increase in tourist numbers in 2023 [20][65]. - The company's scenic area operations, particularly in Wuzhen and Gubei Water Town, are significant profit contributors, with potential for further growth through replication of successful models [20][72]. Summary by Sections Company Overview - CYTS was established in 1980 and became the first travel agency in China after the reform and opening-up. It was listed on the stock exchange in 1997 and has since expanded its business scope significantly [20][42]. - The company has developed a multi-faceted business structure, focusing on scenic area operations, integrated marketing, and hotel management, supported by its parent company, China Everbright Group [20][52]. Financial Performance - In 2023, CYTS achieved a revenue of 9.635 billion yuan, a year-on-year increase of 50.1%, and a net profit of 194 million yuan, recovering from a loss of 334 million yuan in the previous year [21][53]. - The company’s revenue is projected to grow to 11.024 billion yuan in 2024, with a net profit of 298 million yuan, reflecting a continued recovery trend [21][50]. Business Segments - Scenic area operations are the main profit contributors, with Wuzhen and Gubei Water Town being key assets. In 2023, these operations generated 1.72 billion yuan in revenue, accounting for 17.9% of total revenue [20][53]. - The travel agency segment is also recovering, with a focus on outbound tourism products as travel restrictions ease, positioning the company to capitalize on the growing demand [20][68]. Market Outlook - The report highlights a positive outlook for the tourism industry, with domestic tourist numbers expected to reach 6 billion in 2024, and outbound tourism projected to recover significantly [20][65]. - The company is well-positioned to leverage its unique capabilities in scenic area management and integrated marketing to capture market opportunities as the industry rebounds [20][49].