Shanghai Airports

Company Profile:★Shanghai Hongqiao Airport was founded in 1921 and rebuilt in 1950.In 1998, Shanghai International Airport Company Limited was established to operate Hongqiao Airport. In the same year, the company was listed on the Shanghai Stock Exchange. In the same year, Shanghai Airports (Group) Co., Ltd. was established to unify the management of Hongqiao Airport and the under-construction Pudong Airport.In 2004, Shanghai Airports exchanged assets with the Group Company and will mainly operate Pudong Airport.In 2022, Shanghai Airports purchased Hongqiao Airport from the Group Company. Today, the company is mainly engaged in air transportation ground services and other related businesses. The products provided are services.

Business Segments

★In the first half of 2022, the company realized operating income of 1.166 billion yuan, down 35.37% year-on-year. Net profit was -1.258 billion yuan, down 69.77% year-on-year.

★By the source of the company's revenue, of which 423 million yuan of revenue related to air traffic, 151 million yuan of revenue related to passengers and cargo and mail, 166 million yuan of revenue from commercial food and beverage, and 426 million yuan of other non-airline revenue.

Business Description

★Airport revenues are generally categorized into aeronautical and non-aeronautical revenues.

★Of the aeronautical revenues, the racket-related revenues refer to the service fees for the airlines' airplanes taking off at the airport. Total revenue is directly proportional to the number of sorties.

In the first half of 2022, Pudong International Airport had a total of 92,400 takeoffs and landings, a year-on-year decline of 51.37%.

★Passenger and cargo and mail related revenues refer to service fees for passenger boarding or cargo and mail. in the first half of 2022, passenger throughput was 5,742,900, a year-on-year decline of 68.53%, and cargo and mail throughput was 1,472,100 tons, a year-on-year decline of 30.66%.

★Commercial catering revenue is mainly rental income from other businesses such as duty-free stores, which was the company's most important source of income in previous years. After signing a supplemental agreement with China CDFG after the epidemic, the rent was directly linked to international traffic, leading to a significant drop in revenue.Revenue from this module amounted to 166 million yuan in the first half of 2022 and 2.774 billion yuan in the first half of 2019.

★The last piece of other non-airline revenue refers to ground transportation business, advertising, parking fees and so on. Also affected by the epidemic, passenger traffic fell sharply. 2022 first-half revenue was 426 million yuan, down 17.07% year-on-year.

Core Executives

Feng Xin: Born in 1966, Mr. Feng has a master's degree. Mr. Feng joined the workforce in 1988 and has served as General Manager of Shanghai Airline Holiday Travel Agency Co. Secretary of the Party Committee and General Manager of Shanghai Airlines Co. Ltd. and General Manager and Deputy Secretary of the Party Committee of China Eastern Airlines Company Limited, Beijing Branch.

Zhang Yongdong: Born in 1964, Mr. Zhang has a postgraduate degree and is an associate researcher. Mr. Zhang joined the workforce in July 1988 and served as deputy director and director of the Urban Development Division of the Research Office of the Shanghai Municipal Government. Assistant to the President of Shanghai Airports (Group) Company Limited, Deputy Secretary of the Party Committee and Secretary of the Discipline Inspection Committee of Shanghai International Airports Co.

Equity structure: the company's equity structure is clear, and the real controller is Shanghai State-owned Assets Supervision and Administration Commission (SASAC).

Financial indicators: the company's revenue grew steadily before the epidemic, and revenue fell sharply after the epidemic when passenger traffic decreased. The company's gross profit before the epidemic is high, more than 50%, after the epidemic for three consecutive years of losses. The company's debt ratio was 47.78% in the first half of 2022, mainly due to the implementation of the new lease accounting standard, which recognizes the lease payments required for leased-in long-term assets as lease liabilities. With the decline in passenger traffic due to the epidemic, operating cash flow dropped significantly.

Industry trends

★ Complex and severe operating environment for civil aviation

2021 is a year of special importance in the course of the development of civil aviation, in the face of the epidemic prevention and control, operating losses, security pressures, and other difficulties in the intertwining of the overlapping impact of the whole industry to adhere to the stability of progress in the face of adversity has shown a strong resilience to co-ordinate the prevention and control of the epidemic and the industry's recovery and development, to do the difficult to make it happen, The company's business is also a major player in the industry, and the company has been able to make progress in the difficult times.

According to the statistics of the main transportation production index of China Civil Aviation, in 2021, China's civil aviation industry accomplished the total transportation turnover, passenger transportation, and cargo and mail transportation volume of 85.7 billion tons of kilometers, 440 million passengers, and 7.32 million tons, with year-on-year growth rates of 7.3%, 5.5%, and 8.2%. 2021, the national airports*** achieved the number of takeoffs and landings, the number of passenger throughput, and the amount of cargo and mail throughput of 9.777 million flights, 907 million flights, and 907 million tons, which is a year-on-year growth rate. million flights, 907 million passengers, 17.825 million tons, an increase of 8.0%, 5.9% and 10.9%.

Since the beginning of this year, the international environment has become more complex and severe, the domestic epidemic epidemic, the adverse impact of a marked increase in economic development is extremely unusual, unexpected factors beyond the expected serious impact of the second quarter of the downward pressure on the economy has increased significantly. New Crown pneumonia epidemic on the development of civil aviation has caused a serious impact on the production and operation pressure continues to increase, the depth of the impact of the epidemic far beyond expectations.

In the first half of 2022, the civil aviation industry faced an unprecedentedly difficult situation, civil aviation transportation production fell into the trough, production and operation pressure continued to increase, the industry completed a total transport turnover of 29.34 billion ton kilometers, passenger traffic 118 million passengers, cargo and mail transport volume of 3.077 million tons, respectively, for the same period in 2019, 46.7%, 36.7%, 87.5%.

★ Stabilize the development results and promote the industry to resume growth

Based on a comprehensive study of the recovery trend of China's aviation market, the "14th Five-Year Plan" for Civil Aviation Development proposes to divide civil aviation development into two phases in the 14th Five-Year Plan. 2021-2022 is the recovery period and accumulation period, to further consolidate and expand the epidemic prevention and control and civil aviation development results, focusing on a good job of "six stable" work, the full implementation of the "six guarantees" tasks.

The development of civil aviation in this period should focus on the constraints of civil aviation development of the long cycle of variables, make good use of the market recovery phase of the total civil aviation operation of the low load period, speed up the implementation of major projects, grasp to promote the major reforms, the rational control of capacity investment, stabilize the support policy, the accumulation of development momentum, and to promote the industry to resume growth.

2023-2025 is the period of growth and release, focusing on expanding the domestic market, restoring the international market, releasing the effectiveness of reforms, improving the level of opening up to the outside world, focusing on strengthening the kinetic energy of innovation and development, accelerating the improvement of the capacity scale and quality and efficiency, and all-round promotion of the high-quality development of civil aviation.

Knowledge Refinement

Aircraft takeoffs and landings: refers to all the takeoffs and landings of aircraft in and out of airports, including the takeoffs and landings of scheduled flights, non-scheduled flights, general aviation and all other flights. Takeoffs and landings are counted once each.

Passenger throughput: refers to the number of passengers entering and leaving the airport, in terms of human unit of calculation. Adults and children are counted as one passenger and infants are not counted.

Cargo and mail throughput: the number of cargo and mail arriving and departing from the airport, calculated in kilograms and tons. Cargo includes diplomatic pouch and express mail.

Ground transportation:Civil aviation airports can be divided into three parts according to their functions: flight area, terminal area and ground transportation area. The ground transportation system mainly connects the flight area and the terminal area.

Satellite hall: also known as the boarding hall, is part of the terminal building. It is also called the satellite lounge because the boarding gates are generally arranged in a satellite style.

Airfield runway: that is, the airport for aircraft takeoff and landing facilities. The material is generally asphalt or concrete, the length of most of the more than 3,000 meters.

Airport tower:Also known as a control tower, it is a facility used to regulate air transportation. Air traffic controllers need to keep a close eye on the status of every airplane at the airport, receiving planes to the ground as well as sending them to the sky.

Duty Free Shop:This refers to a store that sells duty free goods, which will be distributed in other areas such as airports. Generally goods are imported with customs duty, consumption tax and VAT, and when these fees are waived, the price of the goods will be much cheaper. Duty-free stores are generally for people going abroad and returning home.