Research Report Spotlight | Pacific: Assigns a "Buy" rating to Jiuhua Tourism, with strong performance in passenger transportation and new projects opening growth potential

Pacific Securities’ research report indicates that Jiuhua Tourism’s passenger transportation business performed remarkably well, with new projects opening up growth potential. The company achieved an operating revenue of 879 million yuan in 2025, a year-on-year increase of 14.93%; and a net profit attributable to shareholders of 213 million yuan, up 14.42% year-on-year. During the reporting period, the company’s passenger transportation business generated revenue of 199 million yuan, a substantial increase of 25.02% year-on-year, with a gross profit margin of 52.62%, up 0.24 percentage points compared to the same period last year, mainly due to stricter traffic controls at scenic spots, which led to increased bus passenger flow. The core profit source, the cable car business, maintained steady growth, with revenue of 329 million yuan, an increase of 12.28% year-on-year, and a gross profit margin as high as 85.39%. Profitability remained stable, with continuous improvements in expense management. The construction of the new cableway at Lion Peak is progressing steadily, with the company’s work-in-progress project balance increasing significantly from 5.38 million yuan to 98.96 million yuan during the reporting period, mainly due to investments in this project. Currently, the project has completed the main construction of the Black Tiger Pine Bridge, the import of cableway equipment has been delivered and accepted, and civil engineering construction for the cableway is being carried out in an orderly manner. It is expected that once operational, it will bring clear performance growth to the company. Holiday policies are supportive, and we are optimistic about the recovery of off-season passenger flow and the release of operational leverage. A “Buy” rating is assigned.