Group 1 - The core viewpoint of the article highlights Guilin Tourism as a diversified tourism group based in Guilin, with a focus on the recovery of the tourism market and the continuous release of policy dividends [1] - Guilin Tourism operates multiple businesses including scenic area tourism, Li River cruise transportation, Li River Waterfall Hotel, and passenger services, emphasizing the integration of culture and tourism [1] - The company benefits from its connection to state-owned assets in Guilin, which allows it to enjoy policy advantages and optimize profit performance through asset management [1] Group 2 - The tourism market is experiencing a strong recovery, supported by core tourism resources and various measures to enhance development [1] - New projects are expected to open up growth opportunities for Guilin Tourism, reinforcing its position as a leading player in Guangxi's tourism sector [1] - The company is anticipated to have a valuation premium due to expectations of quality improvement and resource integration, leading to an "overweight" rating in the initial coverage [1]

Investment Rating - The report assigns an "Accumulate" rating for Guilin Tourism (000978) for the first time [1]. Core Insights - Guilin Tourism is positioned as a diversified tourism group based in Guilin, focusing on integrating cultural and tourism resources to enhance its market presence [8][13]. - The tourism market is experiencing a strong recovery, supported by favorable policies and increasing consumer demand for travel [45][53]. - The company is actively optimizing its asset structure and launching new projects to drive growth, leveraging its core tourism resources to build competitive advantages [54][64]. Summary by Sections Company Overview - Guilin Tourism was established in April 1998 and listed in May 2000, focusing on scenic tourism, cruise operations, and hotel services [13]. - In 2024, the company received 5.68 million visitors, with a revenue of 432 million yuan, reflecting a year-on-year decrease of 7.58% [21][23]. Tourism Market Recovery - The domestic tourism market is recovering robustly, with a 15% increase in domestic travel in 2024 compared to the previous year [45][48]. - During the 2025 National Day and Mid-Autumn Festival, domestic travel reached 888 million trips, a 16% increase from 2024 [48] . Core Tourism Resources and Development Initiatives - Guilin Tourism has established a competitive edge through its core tourism resources, including key attractions like the Two Rivers and Four Lakes and Silver Cave [54][58]. - The company is enhancing its service offerings and operational efficiency through asset optimization and innovative project launches, such as the high-end hotel "Lijiang·Waterfall Hotel" [64]. Financial Analysis - The report forecasts the company's net profit for 2025-2027 to be 0.3 billion, 0.4 billion, and 0.5 billion yuan, respectively, with corresponding P/E ratios of 104, 89, and 67 [1][19]. - The company's revenue for 2024 is projected at 432 million yuan, with a slight recovery expected in subsequent years [1][21]. Investment Recommendations - Given the company's strong market position and growth potential, the report recommends an "Accumulate" rating, anticipating valuation premiums due to its status as a leading tourism player in Guangxi [1][64].

Core Viewpoint - Guilin Tourism announced the public transfer of 100% equity and debt of its wholly-owned subsidiary, Zijiang Danxia Company, to optimize asset structure and improve operational efficiency while reducing losses [2][3] Company Overview - Zijiang Danxia Company, a wholly-owned subsidiary of Guilin Tourism, has a registered capital of 50 million yuan and primarily operates the Zijiang Tianmen Mountain scenic area [3] - The company has been continuously losing money since 2008, with cumulative losses of approximately 290 million yuan from 2008 to August 2025 [3] - As of August 2025, Zijiang Danxia Company reported a net asset value of -237 million yuan, while Guilin Tourism's debt claim on the company had a book value of 243 million yuan, with bad debt provisions of 225 million yuan, resulting in a net book value of approximately 18.65 million yuan [3] Financial Performance - Despite efforts to enhance marketing, upgrade facilities, develop new products, and control costs, Zijiang Danxia Company has been unable to reverse its loss situation, leading to the decision to transfer its equity and debt [3] - Guilin Tourism has experienced poor financial performance in recent years, with cumulative losses of nearly 1 billion yuan from 2020 to 2024, although it achieved profitability in 2023 [3]

Core Points - Guilin Tourism plans to publicly transfer 100% equity and 237 million yuan of debt of its long-term loss-making subsidiary, Zijiang Danxia Tourism Co., marking the divestment of an unprofitable asset that has not generated profit since its acquisition in 2007 [2][5][6] - The company faces significant operational challenges, with 8 out of 10 major subsidiaries reporting negative net profits and 5 being insolvent as of mid-2025 [2][7] - Despite a strategic plan aimed at reversing losses, the company reported a net loss exceeding 200 million yuan in 2024 and negative net profit in the first half of 2025, indicating that the effectiveness of the strategy remains to be seen [2][10] Financial Performance - From 2020 to mid-2025, Guilin Tourism only achieved revenue growth and profitability in 2023, with all other periods showing a decline in revenue and net losses [2][9] - The company’s revenue dropped from 606 million yuan in 2019 to 129 million yuan in 2022, with cumulative net losses of approximately 769 million yuan during this period [9] - In 2023, the company reported a revenue increase of 260.89% to 467 million yuan, with net profit and non-recurring net profit both increasing by over 100% [9][10] Strategic Initiatives - The company has proposed a strategic framework called "one core, one optimization, two wings, three expansions" to address its financial difficulties and explore new business areas such as smart tourism and low-altitude economy [2][10] - The strategic plan includes enhancing core tourism operations, optimizing asset structure, and developing new tourism-related industries, although the results of these initiatives have yet to materialize [10] - The company aims to leverage national policies promoting high-quality tourism development and capitalize on the opportunity to establish Guilin as a world-class tourist city [3][10] Market Concerns - The prolonged losses and the decision to sell Zijiang Danxia have raised concerns about the company's internal management and risk assessment processes [6][7] - The potential for the Zijiang Danxia asset to face similar challenges as another subsidiary, Fengyu Rock, which has repeatedly failed to sell its stake, is a point of market speculation [7][10] - The company acknowledges the need for improved performance metrics and monitoring mechanisms for its subsidiaries to prevent future losses [6][7]

Core Viewpoint - Guilin Tourism (000978.SZ) expects to achieve a net profit attributable to shareholders of approximately 8 million yuan in the first half of 2025, marking a turnaround from losses in the previous year [1] Group 1: Financial Performance - The company anticipates a significant improvement in financial performance, with a projected net profit of 8 million yuan for the first half of 2025, compared to a loss in the same period last year [1] - The turnaround is attributed to optimized product structure and enhanced marketing efforts, leading to an increase in visitor numbers across scenic spots, cruise services, and hotels [1] Group 2: Business Operations - Guilin Tourism primarily engages in tourism services and related businesses, including cruise passenger transport, scenic tourism, hotel operations, highway passenger transport, and taxi services [1] - Key scenic areas operated by the company include the core tourism resources in the Guilin region, such as the Two Rivers and Four Lakes Scenic Area, Silver Cave Scenic Area, Longsheng Hot Springs Scenic Area, Fengyu Cave Scenic Area, and Zijiang Tianmen Mountain Scenic Area [1] - The company collaborates with its controlling shareholder, Guilin Tourism Investment Group Co., Ltd., to develop the famous Qixing Scenic Area in Guilin city [1]