Focus on tax-free business China National Travel last year, net profit growth lasted nearly 51% in the quarter

Focusontax-freebusinessChinaNationalTravellastyear,netprofitgrowthlastednearly51%inthequarter
OntheeveningofApril22,ChinaNationalTravelService(601888)releasedits2019annualreport.2019isthefirstyearofChinaInternationalTravel’salternativetravelbusiness.Fromthedatapointofview,theaveragenetprofitofChinaNationalTravelrevenuelastyearincreased,andthenetprofitincreasedyearbyyear.58%;mainbusinessgrossmarginis49.07%,anannualincreaseof7.96%;basicprofitincomeis2.3708yuan.ChinaNationalTravelsaidthattheincreaseinnetprofitbenefitedfromthecontinuedgrowthofthedomesticduty-freeretailmarket.Therestructuringcompaniescontinuedtooptimizeandconsolidatetheexistingdepartureandoffshoretax-freebusinesses,strengthenthecompany’sinternalbusinessintegration,andcontinuetoimprovethecompany’smanagementefficiency.Specifically,lastyearChinaNationalTravelachievedoperatingincomeof479.$6.6billion,anannualincreaseof2.04%,attributablenetprofitwas46.29trillionUSdollars,anannualincreaseof49.58%,deductingnon-netprofitof38.2.9billion,anannualincreaseof21.79%;netcashflowfromoperatingactivitieswas29.2.6billion,anannualincreaseof7.49%,thecompanyexplainedthatitwasmainlyduetothecontinuousfocusontax-freebusiness,whichresultedfromtheincreaseincashinflowduetothegrowthoftax-freebusiness.InJanuary2019,inordertofocusonitsmainbusiness,ChinaNationalTravelGrouptransferred100%ofitswholly-ownedsubsidiary,ChinaTravelServiceCorporation,totheholdingEastChinaTravelGroup.Thecompany’smainbusinessbecameatax-freebusiness,includingtax-freetobacco,alcoholandaromaCommoditywholesaleandretailbusiness.Inaddition,thecompanyhasalsoforcedtheinvestmentanddevelopmentofcommercialcomplexeswithtax-freebusinessasthecore.Thecompany’swholly-ownedsubsidiary,ChinaFreeInvestmentCorporation,andChinaInternationalTravelInvestmentCorporationarerespectivelyresponsibleforthecompany’stax-freebusinessandinvestmentanddevelopmentbusinessoftouristdestinationcommercialcomplexes.ChinaNationalTravelsaidthatthecompany’smainbusinessgrossprofitmarginwas49duringthereportingperiod.07%,anannualincreaseof7.96%,initiallyinJanuary2019,thecompanytransferredtheequityofChinaTravelServicetothecontrollingshareholderofChinaTourismGroup,focusingontheduty-freeretailmarketwithahighergrossmargin.Lastyear,ChinaNationalTravel’smerchandisesalesbusinessachievedoperatingincomeof469.6.7billion,anannualincreaseof36.79%,grossmarginis49.55%,adecreaseof2fromthesameperiodlastyear.At69%,theinitialdecreaseingrossprofitmarginwasthereporteddeclineintheexchangerateofRMBagainsttheUSdollar,whichledtoanincreaseinthecompany’sprocurementcosts.Amongthem,thesalesbusinessofduty-freegoodsrealizedoperatingincomeof458.1.8billion,anannualincreaseof37.89%,grossmarginis50.00%,decreasingby3everyyear.09%.Thecompany’staxablegoodssalesbusinessrealizedoperatingincome11.4.9billion,anannualincreaseof3.75%,grossmarginis31.59%,anannualincreaseof4.68%.ThechannelsofChinaInternationalTravel’sduty-freebusinessmainlyincludeairportduty-freeshops,cityduty-freeshops,islandduty-freeshops,overseasduty-freeshopsandonlineduty-freeshops,andtheislandduty-freeshopsbusinessismainlyinHainan.In2019,SanyaInternationalDutyFreeCitywillgraduallyrealize104operatingincome.$6.5billion,anannualincreaseof30.65%,including101salesofduty-freegoods.$7.4billion,anannualincreaseof30.93%.Intermsofairportduty-freeshops,ShanghaiAirportDuty-FreeShopachievedoperatingincomeof151.4.9billion,anannualincreaseof44.95%;CapitalAirportDutyFreeShopachievedoperatingincomeof85.8.9billionyuan,anincreaseof16.25%;HongKongAirportDutyFreeShopachievedoperatingincomeof24.2billion,anannualincreaseof4.54%;GuangzhouAirportDutyFreeShopachievedoperatingincome19.2.2billion,anannualincreaseof117.46%.Onthesameday,ChinaNationalTravelreleaseditsfirstquarterreportfor2020.Datashowthatinthefirstquarterofthisyear,ChinaNationalTravel’soperatingincomewas76.3.6billion,adecreaseof44peryear.23%;attributablenetprofitmaybe1.2billion,downby105everyyear.21%,comparedwithanetprofitof23inthesameperiodlastyear.0.6billion;deductionofnon-netprofitmaybe1.2billion,adecreaseof107peryear.55%,comparedwithanetprofitof15inthesameperiodlastyear.8.9billion;basicallyitcanbe0.RMB0615;thenetcashflowfromoperatingactivitiesis7.41trillionbits,atleast120peryear.28%.Inthefirstquarterofthisyear,ChinaNationalTravelreceivedagovernmentsubsidyof1505.08millionyuan.ChinaNationalTravelServicestatedthatthenewCrownPneumoniaepidemichasaffectedthecompany’sduty-freeshops,andsomeduty-freeshopshaveclosedoradjustedtheirbusinesshours,whichhasaffectedthecompany’snormaloperations.Thecompanyactivelytakescountermeasures.Onthepremiseofdoingstrictanti-epidemicmeasuresandensuringthehealthandsafetyofconsumersandemployees,italternatelyreducessaleslossescausedbythedeclineinpassengerflow;atthesametime,itconstantlyinnovatesandoptimizesonlineshoppingmodelsaccordingtoitsownoperatingcharacteristicsToincreasethesalesandpromotionofonlinereservationsforduty-freeproductsandreducetheimpactoftheepidemiconthecompany’soperations.Sauna,YeWangZhangZeyaneditorLiWeijiacampustoLiShihuireporteremail:zhangzeyan@xjbnews.com