Guotai Junan Securities·2024-09-01 05:07Investment Rating - The investment rating for the company is "Accumulate" with a target price of 85.20 CNY, down from the previous forecast of 88.29 CNY [2]. Core Views - The profitability of airport duty-free operations has significantly improved, while the Hainan offshore duty-free market remains under pressure. The new city duty-free policy is expected to bring performance elasticity in the medium to long term [2]. Financial Performance Summary - For the first half of 2024, the company reported revenue of 31.265 billion CNY, a year-on-year decrease of 12.81%, and a net profit attributable to shareholders of 3.283 billion CNY, down 15.07% year-on-year. The second quarter of 2024 saw revenue of 12.558 billion CNY, a decline of 17.44% year-on-year, and a net profit of 976 million CNY, down 37.60% year-on-year [7]. - The gross profit margin for Q2 2024 was 33.87%, an increase of 1.03 percentage points year-on-year and 0.55 percentage points quarter-on-quarter. However, the profit margin was pressured by rising costs, particularly in Hainan [7]. - The company’s international passenger flow recovery and reduced commission rates have led to a substantial improvement in airport duty-free profitability, with a 3178% year-on-year increase in operating profit for the Shanghai airport duty-free operations in H1 2024 [7]. Financial Forecast - The company’s projected earnings per share (EPS) for 2024, 2025, and 2026 are 2.84 CNY, 3.20 CNY, and 3.58 CNY respectively, reflecting downward adjustments from previous estimates [7]. - The financial summary indicates a projected revenue increase from 69.45 billion CNY in 2024 to 83.25 billion CNY in 2026, with net profit expected to rise from 5.885 billion CNY in 2024 to 7.404 billion CNY in 2026 [8][10].