Spring Airlines (601021) Investment Value Analysis Report: Cost Advantages Strengthen Performance and Accelerate Cashing

Spring Airlines (601021) Investment Value Analysis Report: Cost Advantages Strengthen Performance and Accelerate Cashing

Accelerating demand for aviation mass penetration penetrates the third and fourth tiers, and the company’s turnover may reach nearly 4 in 2025.

5%, market share continues to increase.

Cost advantage Integrated moat, Q1 company unit cost is 35% lower than the three major airlines.

Industry operation and investment growth forecast, Shanghai, Japan and South Korea demand boom upward, it is expected that the company’s passenger revenue in 2019 may increase by 2%.

The impact of foreign exchange is minimal, and the risk of volatility is basically negligible. Jet fuel prices have fallen by 1% or increased performance by 40 million.

The diameter aviation leader, the unit cost is 35% lower than the three major airlines, put into operation Daxing Airport to improve the route 深圳桑拿网 network.

The company is the leader in aviation with the highest budget. As of the end of 2018, the fleet size was 81, with 173 routes, and 19.52 million passengers at destination.

The Shanghai base will be formed, and 7 mature regional bases including Shijiazhuang and Shenyang will be rebuilt one after another. The Lanzhou base will be newly opened in 2019.

Beijing Daxing Airport may be launched in 2020, which is expected to radically improve the structure of the route.

Assume that one pair of Beijing-Shanghai time is added each day, and it is expected that the gain of seat km will be zero.

About 5%.

Adhering to the business model of two orders, two highs and two lows, the cost per unit kilometer of Q1 may be about 35% lower than that of the three major airlines.

The popularization of aviation is accelerating. The market size will be nearly 100 billion in 2025, and the company’s turnover may increase to nearly 4%.

5%.

The number of domestic flights per capita in 2018 was 0.

44 times, benchmarking overseas naval aviation penetration rate has at least doubled the space.

In 2018, the annual low-cost airline market share was only 11%, significantly exceeding the global 33% level. The acceleration of the popularization of aviation has penetrated the third and fourth lines, and the market share has continued to increase.

We estimate that the size of the aviation market will be reduced to 983 trillion by 2025, and the company may benefit from industry growth dividends.

Assuming that the company’s ASK growth rate will be about 15% in the next 6 years, the company’s market share in 2025 is expected to be nearly 4%.

5%, continuous improvement.

Passenger revenue may increase by 2% in 2019, and ASK may return to more than 15% in 2020. The impact of oil exchange risk is minimal.

In 2017 and 18, domestic passenger revenue increased by 16% and 8%. Supply and demand improved or promoted the company’s passenger revenue increased by 2% in 2019, and revenue continued to rise.

The only introduction of 5 aircraft last year affected the short-term growth rate of operational investment. At the end of the first half of the year, the 5 aircraft appointment plan has been completed. If 10 aircraft are successfully introduced in the second half of the year, the growth rate in 2020 and 21 is required to return to more than 15%.

For every 1% fluctuation in the exchange rate of RMB against the US dollar, the impact on the company’s net profit in 2018 was 580,000. The exchange rate had the smallest impact, and the risks were basically negligible.

On May 30, cloth oil was downgraded by 9 from the beginning of the month.

For every 5% reduction in jet fuel price, the company’s profit is expected to increase by about 40 million yuan, and oil prices can increase the company’s performance.

The cost management and control advantages have been strengthened, and high revenue from auxiliary income has continued to contribute to performance.

In 2018, the company’s unit cost was nearly 30% lower than the average level of the three major airlines. The unit sales expenses and management costs were only 30% and 50% of the three major airlines.
60%.

Compared with Southwestern United States, the company’s cost control is more excellent.

The unit cost of Q1 company is 35% lower than the three major airlines. The cost advantage has been expanded from last year (30%), and the cost advantage has established higher competition barriers.

In 2018, the company’s auxiliary gross profit margin was 64%, and its profitability far surpassed its main business, becoming an important performance support.

Overweight baggage and air sales revenue contributed 68% of this.

Decreasing commissions weighed on auxiliary income, and it is expected to stabilize and recover in 2019.

Risk factors: Macroeconomic growth forecast, rapid oil price growth, aircraft introduction less than expected.

Investment suggestion: Accelerate the demand for mass aviation to penetrate the third and fourth tiers, and the company’s turnover may reach nearly 4 in 2025.

5%, continued to improve.

Cost advantage Integrated moat, Q1 company unit cost is 35% lower than the three major airlines.
Passenger traffic in Shanghai accounted for more than half of the company’s overall. Considering the growth rate of industry operation and investment, the demand boom in Shanghai, Japan and South Korea increased. It is expected that the company’s passenger revenue may increase by 2% in 2019.
We maintain the company’s EPS forecast for 2019/20/21 to 2.

02/2.

38/2.

76 yuan, corresponding to 22/18/15 times the PE.

Considering that the company’s market share continues to increase, the cost advantage is strengthened, and the revenue continues to rise, the company’s net profit will increase by 23% in 2019.

The growth is highly certain and given a certain estimated premium, we believe that the company reasonably estimates about 25 times and gives a target price of 51 yuan (corresponding to 25 times PE in 2019).

Maintain “Buy” rating.