CTG DUTY-FREE(601888) 长江证券·2024-10-25 03:41Investment Rating - The investment rating for the company is "Accumulate" [3][4]. Core Views - The company has experienced a significant decline in performance due to ongoing pressure in the Hainan duty-free market, with a 22% year-on-year decrease in revenue for Q3 2024 and a 52% drop in net profit [3][4]. - Despite the current challenges, the long-term outlook remains positive, driven by the company's core competitive advantages in scale, brand, and operational management. A recovery in consumer demand is anticipated as the economic environment improves [4]. - The company is expected to see a rebound in net profit, projected at 5 billion, 5.8 billion, and 6.2 billion for the years 2024, 2025, and 2026, respectively, with corresponding price-to-earnings ratios of 29, 25, and 23 [4]. Summary by Sections Financial Performance - For the first three quarters of 2024, the company reported a revenue of 43.021 billion, down 15.38% year-on-year, and a net profit of 3.92 billion, down 24.70% year-on-year. The gross margin for the main business was 32.57%, an increase of 1.09 percentage points year-on-year [3][4]. - In Q3 alone, revenue was 11.756 billion, a decrease of 22% year-on-year, with a net profit of 638 million, also down 52% year-on-year [3][4]. Market Dynamics - The Hainan duty-free market continues to face challenges, with sales in July and August 2024 showing declines of 35.9% and 33.1% year-on-year, respectively. The number of shoppers has also decreased significantly [4]. - Conversely, airport duty-free sales have shown significant recovery, with sales at Beijing airports increasing over 140% year-on-year and Shanghai airports nearly 60% [4]. Strategic Initiatives - The company is enhancing its product matrix and optimizing its product structure, particularly increasing the proportion of domestic brands, which has positively impacted sales and consumer recognition [4]. - The company is well-positioned to benefit from the upcoming closure of Hainan, which is expected to improve market sentiment and performance in the long term [4].