CTG DUTY-FREE(SH:601888) Guoxin Securities·2024-11-01 06:42Investment Rating - The report maintains an "Outperform the Market" rating for the company [1][5][6] Core Views - The company's net profit for Q3 2024 decreased by 52% year-on-year, aligning with previous performance forecasts. Revenue for Q3 was 11.756 billion yuan, down 21.52%, with net profit attributable to shareholders at 636 million yuan, also down 52.53% [1][4] - The overall business performance is under pressure, with a 15.38% decline in revenue for the first three quarters of 2024, totaling 43.021 billion yuan, and a net profit decrease of 24.72% [1][4] - The Hainan duty-free business continues to face challenges due to weak consumer demand, with sales down 31% year-on-year for the first three quarters [1][4] - The report highlights a recovery in airport duty-free sales, particularly in Beijing and Shanghai, with significant revenue growth of over 140% and nearly 60%, respectively [1][4] Summary by Sections Financial Performance - Q3 2024 revenue was 11.756 billion yuan, down 21.52%, with net profit of 636 million yuan, down 52.53% year-on-year. For the first three quarters, revenue was 43.021 billion yuan, down 15.38%, and net profit was 3.919 billion yuan, down 24.72% [1][4] - The company's gross margin for Q3 2024 was 32.03%, slightly down from previous periods, but the year-to-date gross margin improved to 33.12% [1][5] Market Trends - The report notes a significant decline in Hainan's duty-free sales, with Q3 sales down 36% year-on-year. The company estimates a more than 30% decline in Hainan duty-free revenue for Q3 [1][4] - The introduction of new policies for city duty-free stores is expected to create new growth opportunities, with plans for new stores in major cities like Beijing and Shanghai [1][5] Future Outlook - The report anticipates that if consumer spending stabilizes, the company could benefit from its enhanced operational capabilities and product offerings, particularly with the new city duty-free policies [1][5] - The revenue growth assumptions for Hainan have been revised downwards for 2024-2026, reflecting the challenging market conditions [1][5]