China International Travel Service Corporation Limited (CITS) Q1 revenue was 18.8 billion, a year-on-year decrease of 9.45%, with a slight net profit increase of 0.25% | Financial Report News

On Tuesday, April 23, China International Travel Service Corporation Limited (CITS) announced its first-quarter performance.

The financial report shows that in the previous quarter, CITS achieved operating income of 18.807 billion yuan, a year-on-year decrease of 9.45%. Despite the slight decline in revenue, the net profit attributable to shareholders of the listed company reached 2.306 billion yuan, a slight increase of 0.25% year-on-year.

During the reporting period, with the further recovery of duty-free business for inbound and outbound travelers, the proportion of CITS's offline business continued to rise, the structure of commodity sales continued to optimize, and benefited from strengthened inventory management and brand structure. In the first quarter of this year, CITS's main business gross profit margin increased to 32.70%, up 3.95 percentage points from the same period last year.

"In the first quarter, the net cash flow generated from operating activities of CITS reached 5.302 billion yuan, a decrease of 28.59% year-on-year, mainly due to reduced sales receipts." Nevertheless, the company's cash flow remains strong, with a year-end balance of cash and cash equivalents reaching 36.3 billion yuan. The robust cash flow provides a guarantee for the company's future expansion. In addition, the company's asset-liability ratio is 23.2%, continuing to maintain at a relatively low level.

In its 2023 annual report, CITS cited the calculation of the China Tourism Research Institute, indicating that by 2024, the number of domestic tourists and domestic tourism revenue will exceed 6 billion person-times and 6 trillion yuan, respectively, basically recovering to or exceeding the level of 2019. The number of inbound and outbound tourists and international tourism revenue will exceed 264 million person-times and 107 billion US dollars, respectively, reaching 88% and 81.5% of the 2019 levels.

However, in the annual report, CITS emphasized that compared to the rapidly recovering domestic tourism market transitioning into prosperity, the inbound and outbound market may still need 4-5 quarters to recover to the previous peak. The policy effects of the recovery of inbound and outbound tourism markets, as well as the comprehensive repair of the supply chain, will require more patience and effort.

As of today's A-share closing, CITS fell more than 1%, closing at 71.72 yuan per share. Year-to-date, CITS A-shares have accumulated a decline of over 11%