Spring Airlines (601021): The quality of income keeps improving and the net profit is better than expected
Investment Highlights: Spring Airlines announces 2019 interim results.
In 2019H1, Spring Airlines achieved operating income of 71.
500 million / + 12.
9% (/ means short-term, the same below), realizing net profit attributable to mother 8.
500 million / + 17.
5%, realized non-net profit deduction of 7.
2 ppm / + 15.
3%, basically 0 benefits.
Of which Q2, the company achieved operating income of 35.
1 ppm / + 13.
1%, realizing net profit attributable to mother 3.
800 million / + 11.
The net profit attributable to mothers is slightly higher than the forecast issued in the July 15 report “Intensified differentiation of airport performance and substantial stability of airlines.
The level of refined management continued to improve, and the quality of revenue continued to improve.
In 2019H1, the company’s ASK and RPK growth rates were 9 respectively.
2%, passenger load factor 91.
7%, an increase of 2 per year.
4 points, among which the domestic, international and regional occupancy rates doubled and increased by 1.
In terms of revenue quality, in 2019H1, the company’s overall passenger kilometers revenue increased by 0.
73%, among which domestic, international and regional are 0.
By quarter, Q1 and Q2 passenger load factors increased by 3 respectively.
8pct, we estimate that the passenger-km revenue Q1 and Q2 increase by 0% and 1, respectively.
In the first half of the year, the company added 5 A320neo nets, and the daily utilization of the aircraft was 11 hours.
19 hours, a year increase of 0.
This year, the company set up a new Lanzhou base on the basis of seven first-tier bases. In the first half of the year, the passenger kilometer revenue of bases other than Lanzhou increased.
Affected by the introduction of new aircraft and rising take-off and landing fees, unit costs rose slightly.
2019H1, the company’s operating cost is 61.
800 million / + 11.
The unit ASK operating cost increases by 1 every year.
9%, of which the unit fuel cost exceeds ten years.
3%, unit non-oil cost increased 2 ahead of schedule.
The increase in unit non-oil cost is mainly due to the company’s annual replacement of A320neo aircraft, which has a higher lease price than the previous generation of CEO, and the depreciation of the RMB against the US dollar, which has resulted in the unit flying lease fee exceeding 14.
Overall, due to the increase in airport-related landing standards, unit take-off and landing fees increased by 13.
In addition to breaking the cost of jet fuel and take-off and landing fees, unit operating costs in the first half of the year decreased by zero compared with the same period last year.
At the same time, we noticed that the company’s Q2 supplemented revenue2.
3 ppm / -21%, our judgment is mainly due to airline supplements and financial subsidies or substitutions.
The favorable policies in the second half of the year have been implemented and are optimistic about performance.
Looking forward to the second half of the year, we believe that there will be measures that are favorable to the airline company. (1) The supply-demand gap caused by the 737max ground-breaking of the entire industry will be realized in the peak season; (2) The market-based pricing of major domestic airlines will continue to be liberalized.Conducive to revenue management; (3) The introduction of a combination of tax reduction and fee reduction policies, including a 50% reduction in the levy standards of civil aviation funds, suspension of the rise and fall of the relevant charging standards for aircraft takeoffs and landings, a reduction in the aviation kerosene purchase and sales spread, a reduction in the level of maritime cargo insurance premiums, etc.The cost burden of the airline company is conducive to the rise of the company’s profitability.
In addition, if oil prices remain at current levels, oil prices will increase by about 13% in the second half of the year.
Earnings forecasts and investment advice.
We expect the company’s EPS to be 2 in 2019-2021.
85 yuan, considering that the company is the only beacon listed in China, and the future conversion of Pudong Airport Satellite Hall, Beijing Daxin Airport, Chengdu New Airport and other large infrastructures into production will bring new opportunities for the company’s development.
22-24 times of PE in 2西安耍耍网019, corresponding to a reasonable value range of 47.
36 yuan, maintain the “preliminary market” rating.
Risk warning: oil prices increase sharply, supplements increase, and the growth rate is less than expected at any time.