Guoxin Securities·2024-03-28 16:00Investment Rating - The report maintains a "Buy" rating for China Duty Free Group (601888.SH) [1][5][15] Core Views - The actual performance for 2023 aligns with the preliminary report, showing a significant increase in cash dividend payout ratio, which sends a positive signal [1][6] - The company achieved a revenue of 67.54 billion yuan, a year-on-year increase of 24.08%, and a net profit attributable to shareholders of 6.714 billion yuan, up 33.46% [1][6] - The dividend payout ratio for 2023 is proposed at 50.85%, significantly higher than the previous level of over 30% [1][6] - The company is transitioning from a focus solely on duty-free to a broader travel retail model, indicating growth potential [2][14] Financial Performance Summary - In Q4 2023, the company reported a revenue of 16.703 billion yuan, reflecting a 10.85% increase, and a net profit of 1.507 billion yuan, a substantial increase of 274.88% [1][6] - The overall revenue from Hainan operations was 39.65 billion yuan, a 14.25% increase, while the airport duty-free segment faced pressure [1][12] - The main business gross margin improved by 3.34 percentage points, driven by an increase in the proportion of duty-free revenue [12][14] Earnings Forecast and Financial Metrics - The forecast for net profit attributable to shareholders for 2024-2026 is adjusted to 7.734 billion, 9.362 billion, and 10.528 billion yuan respectively, with corresponding EPS of 3.74, 4.53, and 5.09 yuan [2][14] - The PE ratio is projected to be 22, 18, and 16 for the years 2024, 2025, and 2026 respectively [2][14] - The company’s return on equity (ROE) is expected to improve from 12.5% in 2023 to 15.6% by 2026 [3][16]