Hua Er Jie Jian Wen·2025-10-30 12:09Core Viewpoint - In the context of a generally weak global consumption environment, China Duty Free's third-quarter revenue stagnated, and net profit saw a significant year-on-year decline. Despite the pressure on performance, the company plans to implement its first interim dividend, distributing over 500 million yuan in cash dividends for the first three quarters [1][2]. Group 1: Financial Performance - In Q3, China Duty Free's revenue was 11.71 billion yuan, a year-on-year decrease of 0.38%. For the first three quarters, revenue totaled 39.86 billion yuan, down 7.34% year-on-year [6]. - The net profit attributable to shareholders in Q3 was 452 million yuan, a substantial year-on-year drop of 28.94%. For the first three quarters, net profit was 3.05 billion yuan, down 22.13% year-on-year [6]. - The weighted average ROE for Q3 was only 0.82%, a decrease of 0.36 percentage points compared to the same period last year, indicating a very low shareholder return rate [3]. Group 2: Cash Flow and Costs - The operating cash flow net amount for the first three quarters was 3.39 billion yuan, a significant year-on-year decline of 33.62%, primarily due to reduced sales collections [3]. - Cash and cash equivalents decreased from 34.82 billion yuan at the beginning of the year to 31.97 billion yuan, a reduction of 2.85 billion yuan, although the absolute scale remains relatively ample [3]. - Operating costs for the first three quarters were 26.89 billion yuan, down 6.54% year-on-year. Sales expenses were 6.46 billion yuan, a decrease of 4.98% year-on-year, but the sales expense ratio increased from 15.80% to 16.20% [3]. Group 3: Strategic Developments - Despite the overall performance pressure, the Hainan duty-free business showed positive signals, with sales in September 2025 increasing by 3.4% year-on-year, marking the first positive growth in 18 months [4]. - The company is accelerating its diversification strategy by opening new city duty-free stores in Shenzhen, Guangzhou, and Chengdu, adopting a dual-track operation model of "duty-free + taxable" [4]. - Capital expenditure is increasing, with construction in progress rising from 972 million yuan at the beginning of the year to 1.49 billion yuan, an increase of 53% [4]. Group 4: Inventory and Investment Concerns - The inventory level was high at 17.22 billion yuan, slightly down by 129 million yuan from the beginning of the year, but still accounting for 22.81% of total assets [5]. - Investment income turned to a loss of 53.63 million yuan, compared to a profit of 21.92 million yuan in the same period last year, primarily due to losses from investments in joint ventures [5]. - Other current assets surged from 1.976 billion yuan at the beginning of the year to 4.447 billion yuan, an increase of 125% [5]. Group 5: Dividend Announcement - The company plans to distribute an interim cash dividend of 2.50 yuan per 10 shares (before tax), totaling 517 million yuan, which accounts for 16.95% of the net profit attributable to shareholders for the first three quarters [7]. - This marks the company's first implementation of an interim dividend, aimed at enhancing investor returns [7]. - As of the end of the reporting period, the equity attributable to shareholders was 55.67 billion yuan, an increase of 577 million yuan from the beginning of the year, indicating sufficient cash reserves to support the dividend [7].