HSTD(600054) Southwest Securities·2024-11-01 08:00Investment Rating - The report maintains a "Buy" rating for Huangshan Tourism (600054) with a target price of 13.78 CNY over the next six months [1][3]. Core Views - The company reported a revenue of 1.41 billion CNY for Q1-Q3 2024, a year-on-year decrease of 1.6%, and a net profit of 280 million CNY, down 30.2% year-on-year. The gross margin was 53.4%, down 4.0 percentage points, and the net margin was 22.2%, down 8.7 percentage points. In Q3 2024, revenue was 580 million CNY, a decline of 3.3% year-on-year, with a net profit of 150 million CNY, down 26.4% year-on-year. The visitor count for Huangshan Scenic Area was 1.49 million, an increase of 3.4% year-on-year [1][2]. Summary by Sections Financial Performance - For Q1-Q3 2024, the company achieved a revenue of 1.41 billion CNY, a decrease of 1.6% year-on-year, and a net profit of 280 million CNY, down 30.2% year-on-year. The gross margin was 53.4%, down 4.0 percentage points, and the net margin was 22.2%, down 8.7 percentage points. In Q3 2024, revenue was 580 million CNY, a decline of 3.3% year-on-year, with a net profit of 150 million CNY, down 26.4% year-on-year [1][2]. Cost and Revenue Drivers - The decline in revenue and profit in Q3 2024 was attributed to increased marketing and management costs, along with enhanced free ticket promotions at Huangshan Scenic Area, which reduced the number of effective ticket purchases. Sales expenses rose by 47.6% year-on-year to 15.35 million CNY, while management expenses increased by 11.8% year-on-year to 83.77 million CNY [2]. Business Expansion - The company is accelerating the nationwide layout of its Weishang Guli restaurant chain, with new openings in Lu'an and Yuncheng, and plans for further expansion in Guangdong and Jiangsu provinces. The restaurant business is part of the strategy to "go down the mountain," which is expected to support long-term performance growth once the restaurant locations reach maturity [2]. Future Development - The North Sea Hotel and Huangshan Donghai Scenic Area, along with the East Gate Cableway, are expected to be operational by mid-2025, which will enhance the future development potential of Huangshan Scenic Area. The North Sea Hotel renovation is expected to be completed by the end of this year, with over 70% of the exterior work already finished [3]. Profit Forecast - The company is projected to achieve net profits of 320 million CNY, 390 million CNY, and 460 million CNY for 2024, 2025, and 2026, respectively. The company is expected to benefit from the high-quality tourism resources of Huangshan, leading to sustained visitor growth. A price-to-earnings (PE) ratio of 26 times is assigned for 2025, corresponding to the target price of 13.78 CNY [3][9].