China National Travel Service (601888) 2019 Interim Report Comments: All tax-exempt sectors have solid and high growth overall performance in line with expectations

China National Travel Service (601888) 2019 Interim Report Comments: All tax-exempt sectors have solid and high growth overall performance in line with expectations

Event: In 2019H1, the company realized revenue, revenue-excludes China National Tourism Corporation, revenue-excludes China National Tourism Corporation and Shanghai Shanghai, net profit attributable to mothers and net profit attributable to non-mothers were 243.

44 / + 15.

46%, 237.

45 / + 52.

01%, 160.

12 / + 36.

84%, 32.

79 / + 70.

87%, 25 / + 30.

86% yuan.

Global tourism retail sales increased by nearly 13% in 2018, with China as the main driver.

According to reports, GenerationResearch and China Exempt Information, the global tourism retail sales increased by 12 in 2018.

9% to 789.

600 million US dollars, while China’s tax exemption initially only 39.5 billion / + 27.

3%; According to its forecast, the growth rate of global duty-free industry shares will reach 7 in 2019.

8%, while China’s growth rate will exceed 18%.

In 2019H1, the company’s revenue in each 合肥夜网 segment of the company has achieved steady and high growth every year.

(1) China Travel Headquarters achieved revenue 5.

US $ 9.9 billion, which was split in January this year, brought about US $ 900 million in investment income to the company.

(2) Capital Airport Duty Free Shop (including T2 and T3) realized tax-free income43.

65 ppm (T2, T3 internal transaction data excluded) / +25.

54%; T3 duty-free stores realized (including tax-free and other) revenue 37.

66 / + 13.

78%, the growth rate is lower than the overall tax-free growth rate of the Capital Airport, or mainly due to changes in the statistical caliber for T2 suppliers; the realization of net interest rate.

95% / + 1.

68 points, or mainly due to the income growth rate is higher than the rate increase during the period.

(3) Shanghai Airport realized tax exemption and other (including tax) income of 73 respectively.

77 and 3.

5.7 billion, an increase of 92 each year.

41% and 315.

22%, mainly due to the rapid growth of Shanghai in the past, and the consolidated statement in March last year; Shanghai’s net profit attributable to mothers3.

21 ppm / +49.

44%, although the growth rate of the deduction rate has increased significantly, last year’s Shanghai consolidation was only from March to June.

(4) Sanya Haitang Bay realized tax exemption and other (including tax) income of 51 respectively.

81 and 1.

48 ppm, an increase of 28 per year.

50% and 37.

05%; net profit achieved 8.$ 32.5 billion / +5.

63%, or mainly due to the increase in rental and selling expenses.

(5) Baiyun Airport realized tax-free income8.

44 ppm / + 193.

06%, mainly due to T1 entry shops, T2 entry / exit shops only opened in the first half of last year, this year’s revenue continued to climb.

(6) Tax-free business income from Hong Kong Airport12.

9.6 billion / + 36.

13%, mainly due to the company’s continued increase in duty-free shops in the second half of last year.

(7) Others: Other main income is 40.

1.5 billion / + 82.

15%, mainly due to the steady growth of the traditional sector and the increase in free supply revenue; other retail profits were 12.

8.7 billion / +60.

51%, mainly due to: Hong Kong’s turnaround, Baiyun Airport’s profits increased, and the annual free supply profit increased.

In 2019H1, due to the impact of exchange rate, the tax-free gross profit margin quota and the chain rate will both decrease slightly.

In 2019H1, the company’s gross profit margin was 51.

05% / + 9.

83pct, mainly due to the transfer of travel agencies and the increase in taxed gross profit margin; sales expenses decreased by 30.

29% / + 7.

24pct, mainly due to the transfer of the travel agency industry, the Shanghai Airport new contract and the deduction rate increased; management fee rate 2.

32% /-0.

39pct, mainly due to the reduction in management costs caused by the disposition of the China National Travel Service; financial rate is 0.

05 / + 0.

11pct, mainly due to the decrease in interest income and the increase in financial handling fees (WeChat, Alipay, etc.) for receiving money; asset loss / operating income is 0.

41%, an increase of 0 every year.

38 pct, mainly due to inventory price loss; the company’s net interest rate was 15.

86% / + 9.


The level of the company’s leadership structure is more reasonable, and a small percentage of the company plans to participate in the travel insurance business.

The company’s leadership has undergone major adjustments. With this change, the company’s merger structure has become more reasonable.

In addition, the company plans to co-sponsor the establishment of the China Travel Finance Company with the parent company and 4 other non-affiliated companies. The company plans to hold 5% of the shares.

Profit forecast and grade: After the initial release of the city’s internal tax-free policy, overseas tax-free consumption has gradually returned to acceleration. As a tax-free giant with a market share of over 85%, the company will fully benefit.

We continue to be optimistic about the future development of the company, and we have made some adjustments to the performance forecast. It is expected that the company’s net profit attributable to mothers in 2019-2021 will be 46.



68 ppm, EPS is 2 respectively.



00, corresponding to a sustainable PE of 39 on August 31.


9/31.8 times, continuous recommendation.

Risk reminders: (1) systemic risks; (2) policy risks; (3) exchange rate fluctuation risks; (4) intensified market competition, etc.