CYTS(600138) 国泰君安·2024-11-03 02:15Investment Rating - The report maintains a "Buy" rating for the company with a target price of 11.95 yuan, representing a 9% increase from the previous target of 10.88 yuan [2][3] Core Views - The company's performance in 2024Q3 was slightly below expectations, primarily due to pressure on leisure tourism under the trend of budget travel [2] - The two key tourism towns (Wuzhen and Gubei Water Town) are still in the process of recovery, with both revenue and profitability yet to fully rebound [2] - The hotel business is expected to accelerate its recovery, contributing to the positive outlook [2] Financial Performance - For 2024Q1-3, the company achieved revenue of 7.048 billion yuan, a 4.65% YoY increase, but gross profit declined by 3.66% to 1.683 billion yuan [2] - Net profit attributable to the parent company dropped by 25.77% to 153 million yuan, with a net profit margin of 2.98%, down 0.92 percentage points [2] - In Q3 alone, revenue grew by 5.51% to 2.697 billion yuan, but gross profit fell by 9.18% to 634 million yuan [2] Operational Highlights - Wuzhen received 5.99 million visitors in 2024Q1-3, a 2.7% YoY decrease, with revenue declining by 4.36% to 1.325 billion yuan [2] - Gubei Water Town saw a 10.55% drop in visitors to 1.0025 million, with revenue falling by 21.38% to 429 million yuan [2] - The company's other businesses, including Zhongqing Bolian and Shanshui Hotel, also experienced revenue declines [2] Industry Context - The social services industry, particularly the leisure tourism sector, is facing challenges due to the trend of budget travel [3] - The company's performance is closely tied to the recovery of its key tourism assets, which are still under pressure [2] Valuation and Forecast - The report forecasts EPS for 2024-2026 at 0.27 yuan (-29%), 0.33 yuan (-25%), and 0.39 yuan (-17%) respectively [2] - The target price is based on a 31x PE ratio for 2025, reflecting optimism about the hotel business recovery [2] - The company's market capitalization stands at 7.34 billion yuan, with a current stock price of 10.14 yuan [4] Historical Performance - The stock price has fluctuated between 8.86 yuan and 12.14 yuan over the past 52 weeks [4] - Over the past 12 months, the stock has underperformed the market, with a -4% absolute return and -13% relative to the index [7]