CTG DUTY-FREE(SH:601888)2024-10-17 00:37Investment Rating - The investment rating for China Duty Free Group (601888) is maintained as "Buy" [5]. Core Views - The company reported a decline in performance for the third quarter, with revenue of 43 billion yuan for the first three quarters of 2024, down 15% year-on-year, and a net profit of 3.9 billion yuan, down 24.7% year-on-year. The profit for Q3 2024 was 638 million yuan, a 52% decline year-on-year [5]. - The duty-free sales from offshore islands are under pressure due to a decrease in domestic passenger flow at two airports, although overall passenger flow has seen a year-on-year increase. The passenger throughput at Meilan International Airport increased by 18.19% year-on-year from January to July 2024, while domestic passenger flow at Sanya Phoenix Airport and Meilan International Airport decreased by 6% and 2% respectively in Q3 [5]. - The number of visa-free countries and international flights is increasing, significantly boosting the performance of inbound duty-free stores. Sales at duty-free stores in Beijing airports grew over 140% year-on-year, and those in Shanghai airports increased nearly 60% [5]. - A new policy for city duty-free stores was implemented on October 1, 2024, which standardizes management and aligns with international practices, potentially enhancing sales as inbound travel gradually recovers [6]. - The profit forecast for the company has been revised downwards, with expected net profits of 5.62 billion, 6.17 billion, and 6.89 billion yuan for 2024-2026, respectively, reflecting a PE ratio of 24, 22, and 20 times [6]. Financial Summary - For 2024, the expected total revenue is 61.67 billion yuan, with a year-on-year decline of 8.7%. The net profit is projected at 5.62 billion yuan, down 16.2% year-on-year [7]. - The gross profit margin for the first three quarters of 2024 is 32.57%, an increase of 1.09 percentage points year-on-year [5]. - The company’s total revenue for 2023 was 67.54 billion yuan, with a net profit of 6.71 billion yuan, reflecting a growth of 33.5% year-on-year [8].