CTG DUTY-FREE(601888) CAITONG SECURITIES·2024-11-07 08:23Investment Rating - The investment rating for the company is "Buy" (maintained) [1][3] Core Views - The company reported a total revenue of 43.021 billion yuan for the first three quarters of 2024, a year-on-year decrease of 15.38%, and a net profit attributable to shareholders of 3.919 billion yuan, down 24.72% year-on-year [2] - The decline in performance is attributed to lower-than-expected tourism in Hainan affecting offshore duty-free sales, along with a decrease in gross margin due to increased discounts and a lower proportion of offshore duty-free sales [2] - The company has introduced 165 new product brands in the first three quarters, with over 40% being domestic brands, contributing to sales growth [2] - The company’s duty-free sales at entry and exit points have seen significant growth due to the expansion of visa-free countries and the optimization of transit visa policies, with sales at Beijing airports increasing by over 140% year-on-year and Shanghai airports by nearly 60% [2] Financial Forecast - The company is expected to achieve revenues of 55.949 billion yuan, 66.659 billion yuan, and 77.411 billion yuan for 2024, 2025, and 2026 respectively, with net profits of 5.341 billion yuan, 6.410 billion yuan, and 7.737 billion yuan for the same years [3][4] - Corresponding PE ratios are projected to be 28.1, 23.5, and 19.4 for 2024, 2025, and 2026 respectively [3][4] - The company’s gross margin is expected to improve, with a forecasted gross margin of 35.1% in 2024, increasing to 36.5% in 2025 and 36.9% in 2026 [4]