CTG DUTY-FREE(SH:601888) Minsheng Securities·2024-09-01 07:31Investment Rating - The report maintains a "Recommended" rating for the company [2][3]. Core Views - The company reported a revenue of 31.265 billion yuan in 1H24, a year-on-year decrease of 12.81%, with a net profit attributable to shareholders of 3.866 billion yuan, down 1.83% year-on-year [1]. - The gross margin improved to 33.53%, up 2.92 percentage points, driven by an optimized product sales structure and better promotional management [1]. - The company is experiencing a significant recovery in its inbound duty-free business, with revenue from domestic duty-free stores growing over 100% year-on-year [2]. Summary by Sections Financial Performance - In 1H24, the company achieved a revenue of 31.265 billion yuan, with a net profit of 3.866 billion yuan and a non-recurring net profit of 3.283 billion yuan, reflecting a year-on-year decrease of 15.07% [1]. - The second quarter of 2024 saw a revenue of 12.458 billion yuan, down 17.44% year-on-year, but net profit increased by 37.60% to 976 million yuan [1]. Product and Sales Strategy - The company optimized its product structure, increasing the proportion of high-margin products, which contributed to the improvement in gross margin [1]. - The sales expense ratio increased to 14.83%, attributed to rising leasing costs as new duty-free ports opened [1]. Regional Performance - The company's international operations reported a revenue of 22.549 billion yuan, down 10.98% year-on-year, while the Sanya duty-free store revenue fell by 28.97% to 11.986 billion yuan [2]. - The Shanghai duty-free store, however, reported a revenue increase of 3.70% to 8.500 billion yuan, with net profit soaring by 3599.41% to 310 million yuan, driven by recovering passenger flow and reduced airport rents [2]. Future Outlook - New rental agreements are expected to lower airport rental costs, and the recovery of passenger flow is anticipated to boost duty-free revenue [2]. - The company forecasts net profits of 6.342 billion yuan, 8.235 billion yuan, and 10.309 billion yuan for 2024, 2025, and 2026, respectively, with corresponding PE ratios of 20x, 15x, and 12x [2][3].