CTG DUTY-FREE(SH:601888) Minmetals Securities·2024-11-06 08:23Investment Rating - The investment rating for the company is "Hold" [6][11]. Core Views - The company experienced a significant decline in both revenue and net profit in Q3 2024, with revenue at 43.021 billion yuan, down 15.4% year-on-year, and net profit at 3.92 billion yuan, down 24.7% year-on-year [2]. - The gross margin decreased to 32.0%, a year-on-year decline of 2.4%, while sales expenses increased, indicating a higher overall investment in marketing and management [3]. - The company is benefiting from a strong performance in port duty-free sales, with significant revenue growth in duty-free stores at Beijing and Shanghai airports, exceeding 140% and nearly 60% year-on-year, respectively [4]. Financial Performance Summary - For the first three quarters of 2024, the company reported a total revenue of 430.21 billion yuan, with a net profit of 39.2 billion yuan [2]. - In Q3 2024, the company’s revenue was 117.56 billion yuan, reflecting a year-on-year decrease of 21.5%, and the net profit was 6.36 billion yuan, down 52.5% year-on-year [2]. - The company’s gross margin for Q3 2024 was 32.0%, down from the previous year, while the sales expense ratio increased to 18.4% [3]. Market Trends and Future Outlook - The company is expected to benefit from the gradual recovery of the duty-free market and the implementation of favorable policies in urban areas, which may enhance its competitive advantage [11]. - The company plans to continue expanding its product offerings, having introduced 165 new brands in the first three quarters of 2024, with over 40% being domestic brands [4]. - Revenue projections for 2024 to 2026 are estimated at 587.8 billion yuan, 650.1 billion yuan, and 725.7 billion yuan, respectively, with net profits expected to be 59 billion yuan, 71 billion yuan, and 77 billion yuan [11].