CYTS (600138) Interview Review: World Garden Fair promotes growth of integrated marketing business

Incident review company released 2019 semi-annual financial report, including revenue growth rate5.

13%, net profit growth rate -4.


19H1 company achieved operating income of 58.

5.3 billion (+5.

13%), net profit attributable to mother 3.

83 trillion, affected by factors such as labor costs and financial costs, continued to decline5.

61%, net of non-attributed net profit2.

5.8 billion (-15.


19Q2 achieved revenue of 33.

100 million (+8.

18%), net profit attributable to mother 3.

1.8 billion (+3.

92%), net of non-attributed net profit2.

03 billion (-4.


  World Garden will help integrate the marketing business to achieve double growth in revenue and profits, and the hotel and IT sales business will maintain high gross margins.

19H1 company integrated marketing business to achieve revenue12.

10,000 yuan (+10.

29%), net profit is 0.

2.1 billion (+18.

37%), mainly due to the participation of China Youth League and its subsidiaries in the Beijing World Garden Fair (2019.



7) Prepare for reception and follow-up operations, and participate in many integrated marketing activities.

Shanshui Hotel achieved revenue 2.

4.5 billion (+9.

75%), net profit decreased by 14.

27%, gross margin 80.

13% (-1.

96%); IT product sales and technical service revenue15.

2.8 billion (-0.

17%) basically flat for one year, with a gross profit margin of 74.

86 (+3.

41%); CYTS Building continues to contribute a stable source of income and profit, and house rental income is zero.

5.9 billion (+28.
17%) Wuzhen’s performance was stable, and the net profit of Gubei Water Town’s passenger flow both fell.
19H1 Wuzhen Scenic Area expanded to receive 445 tourists.

980,000 person-times (-0.

80%) and realized operating income of 8.

5.5 billion (+2.

60%), net profit 4.

72 megabytes, basically flat for one year.

The report continues the structural transformation of Wuzhen’s scenic spots and builds a “vacation-meeting-culture” brand.


  Gubei Water Town received 100 tourists in a row due to increased competition pressure and traffic interference.

680,000 person-times (-8.

81%), achieving revenue of 4.

2 billion (-8.

04%), the customer unit price is 417 yuan (+0.

83%), the investment income of the real estate companies participating in the increase and decrease, achieving a net profit of 0.

5.4 billion (-47.


The company and Jingneng 北京夜生活网 Group on Gubei Water Town 5.

1613% of the equity transfer has paid the remaining transfer of the project and completed industrial and commercial change registration procedures.

  Labor cost growth has dragged down the company’s net profit and expense.

In 19H1, the company’s net profit attributable to its mother decreased by 5.

61%, net profit after deducting non-attributed mothers fell by 15.


Divide R & D expense ratio (0.

07%) over the same period last year (0.

08%) were basically flat with a sales expense ratio of 10.

85% (+17.

20%), the management expense ratio is 4.

81% (+11.

10), financial expense ratio is 0.

94% (+32.

46%) mean value increased, of which financial expenses increased the most, mainly due to the increase in loan size.

  Investment suggestion: In 2019H1, the passenger flow in Wuzhen Scenic Area will increase slightly, the passenger flow in Gubei Water Town will pass through, and the actual income will decrease. At the same time, the rise of the company’s overall human cost will drag down the expense end, affect profit, and pressure on performance.

In the short term, the performance-driven effect of the World Garden Festival will continue after the National Day. The Puyuan Project will try its business in 2020 to promote the release of performance.

In the medium and long term, we will focus on the integration progress with Everbright Group, and obtain endogenous growth momentum and support from high-quality capital resources.

The company’s EPS for 2019-2021 is expected to be 0.

96\0.98\1.13, corresponding to the company’s closing price of 11 on August 15.

18 yuan, PE for 2019-2021 is 11 respectively.
59\10.37\9.93. The first coverage was given an “overweight” rating.

  There is a risk of peer competition risk; security accident risk; risk of falling passenger flow at attractions; risk of price reduction