CTG DUTY-FREE(SH:601888) Guoxin Securities·2024-09-02 04:03Investment Rating - The investment rating for the company is "Outperform the Market" [2][12][10] Core Views - The company's revenue and net profit attributable to shareholders were under pressure in the first half of 2024, with revenue at 31.27 billion yuan, down 12.8%, and net profit at 3.28 billion yuan, down 15.1% [1][5] - The performance in Hainan's duty-free sector remains under pressure, while there is an improvement in the profitability of airport duty-free operations [1][7] - The company is expected to benefit from new policies regarding city duty-free shops, which will be implemented on October 1, 2024, potentially enhancing revenue streams [1][10] Summary by Sections Financial Performance - In the first half of 2024, the company achieved revenue of 31.27 billion yuan, a decrease of 12.8%, and a net profit of 3.28 billion yuan, down 15.1% [1][5] - The second quarter saw revenue of 12.46 billion yuan, down 17.4%, and a net profit of 976 million yuan, down 37.6% [1][5] - Hainan's duty-free sales were significantly impacted, with a 29.9% decline in sales to 18.46 billion yuan and a 10% drop in visitor numbers [1][7] Profitability Metrics - The company's gross margin improved, with sales expense ratio increasing by 2.9 percentage points, while financial expense ratio decreased by 0.5 percentage points [1][7] - The net profit margin for the first half was down 0.28 percentage points, with a significant decline in Q2 due to Hainan's performance [1][7] Future Outlook - The company is focusing on enhancing its duty-free product offerings and operational efficiency to adapt to changing consumer trends [1][10] - The new city duty-free policy is expected to provide additional revenue opportunities, with plans to convert existing stores to cater to outbound travelers [1][10] - Revenue growth estimates for Hainan have been revised downwards for 2024-2026, reflecting ongoing challenges in the market [1][10]