CTG DUTY-FREE(601888) 兴业证券·2024-11-16 23:58Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 75.80 RMB as of November 8, 2024 [1][3] Core Views - The company's Q3 2024 performance was impacted by weak consumer demand and typhoon disruptions, with revenue and net profit declining by 21.52% and 52.53% YoY respectively [5] - Increased promotional activities in Q3 led to a decline in gross and net profit margins, with gross margin dropping by 2.43 percentage points YoY to 32.03% [5] - Despite challenges in Hainan's duty-free sales, October showed signs of recovery, supported by the company's anniversary promotions and recovering air passenger traffic [5] - Airport duty-free stores benefited significantly from the recovery of international passenger traffic, with Beijing airport stores seeing over 140% YoY growth and Shanghai airport stores growing nearly 60% [5] Financial Performance - The company's 2024E revenue is projected at 58,436 million RMB, a 13.5% YoY decline, with a recovery expected in 2025E and 2026E at 12.1% and 15.0% growth respectively [4] - Net profit attributable to shareholders is forecasted at 5,223 million RMB for 2024E, a 22.2% YoY decrease, with subsequent growth of 13.4% and 18.6% in 2025E and 2026E [4] - ROE is expected to decline to 9.4% in 2024E from 12.5% in 2023, with gradual recovery to 11.2% by 2026E [4] Market Position and Outlook - The company remains a leader in duty-free operations, with potential benefits from the recovery of international travel and upcoming city duty-free store openings [5] - The report highlights the company's strong position to benefit from macro policies stimulating domestic demand [5] - Valuation metrics show a 2024E PE of 30.0x, decreasing to 22.3x by 2026E, indicating potential for multiple expansion as earnings recover [4][5]