Soochow Securities·2024-04-07 16:00Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The Q1 2024 performance met expectations, with a gross margin recovery continuing. The company achieved a revenue of 18.807 billion yuan, a year-on-year decrease of 9.45%, and a net profit attributable to shareholders of 2.308 billion yuan, a year-on-year increase of 0.33% [2][3] - The sales proportion of duty-free luxury goods in Hainan has increased, with the average transaction value recovering due to an optimized sales structure [3] - There is significant growth potential for port duty-free sales in 2024, supported by the recovery of international passenger flow and improved cooperation mechanisms with airports [3] - The company maintains a solid market position and is expected to benefit from the gradual recovery of outbound tourism and domestic duty-free policies, with adjusted profit forecasts for 2024-2026 [3] Summary by Sections Financial Performance - For Q1 2024, the company reported a revenue of 18.807 billion yuan, down 9.45% year-on-year, and a net profit of 2.308 billion yuan, up 0.33% year-on-year. The gross margin for the main business was 32.70%, an increase of 3.95 percentage points year-on-year [2][3] - The net profit margin for Q1 was 12.27%, up 1.19 percentage points year-on-year and 3.25 percentage points quarter-on-quarter [3] Sales and Market Trends - The sales of duty-free goods in Hainan for January-February 2024 were 9.7 billion yuan, a year-on-year decrease of 21%, with 1.54 million shopping visits, down 3% year-on-year. The average transaction value was 6,320 yuan, compared to 7,791 yuan in January-February 2023 [3] - The sales structure improved, with luxury goods and cosmetics accounting for 52% and 38% of sales in February 2024, respectively [3] Future Outlook - The company is expected to see significant growth in port duty-free sales in 2024, with international passenger flow recovering to 50%-87% of 2019 levels at major airports [3] - The profit forecasts for 2024-2026 are adjusted to 8.2 billion, 9.56 billion, and 11.23 billion yuan, respectively, with corresponding P/E ratios of 21, 18, and 15 times [3]