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

A report from Pacific Securities states that Jiuhua Tourism’s passenger transportation business performed strongly, and new projects have opened up room for growth. In 2025, the company achieved operating revenue of 879 million yuan, up 14.93%; and attributable net profit of 213 million yuan, up 14.42%. During the reporting period, the company’s passenger transport business generated revenue of 199 million yuan, up 25.02% year over year, with a gross margin of 52.62%, up 0.24 percentage points year over year. This was mainly due to tighter traffic control at the scenic area, which increased passenger volumes for the company’s exclusive coaches. The cable car/ropeway business, a key profit source, maintained steady growth, with revenue of 329 million yuan, up 12.28%, and a gross margin as high as 85.39%. Profitability remained steady, and expense control continued to improve. Construction of the Lion Peak new ropeway project is being advanced steadily. During the reporting period, the balance of the company’s construction in progress increased sharply from 5.38 million yuan to 98.96 million yuan, primarily for investment in this project. Currently, the project has completed the main construction of the auxiliary road bridges, including the Black Tiger Pine Bridge; the ropeway’s imported equipment has been delivered and accepted; and construction of the ropeway civil works and other related projects is being implemented in an orderly manner. It is expected that after the project goes into operation, it will bring a clear incremental boost to the company’s performance. Holiday policies will provide support, and we are optimistic about the recovery of passenger traffic in the off-season and the release of operating leverage. We rate it as a “Buy.”