EBSCN·2024-04-08 16:00Investment Rating - The report maintains a "Buy" rating for China Duty Free Group (601888.SH) [3][5] Core Views - The company reported a revenue of 18.81 billion yuan in Q1 2024, a year-on-year decrease of 9.45%, while the net profit attributable to shareholders was 2.31 billion yuan, a slight increase of 0.33% [1] - The company's gross profit margin improved to 32.7% in Q1 2024, an increase of 3.95 percentage points year-on-year, indicating enhanced profitability [2] - The company has successfully attracted consumers during the Spring Festival with various promotional activities, leading to a 40.4% increase in foot traffic at CDF Sanya International Duty Free City compared to last year [2] - The company is expanding its overseas business, having opened a Qeelin boutique at Singapore Changi Airport, marking its entry into the Singapore market [2] Financial Summary - Revenue is projected to grow from 70.6 billion yuan in 2024 to 91.8 billion yuan in 2026, with a compound annual growth rate (CAGR) of approximately 12.27% [4] - Net profit is expected to increase from 7.23 billion yuan in 2024 to 9.95 billion yuan in 2026, reflecting a CAGR of 14.58% [4] - Earnings per share (EPS) is forecasted to rise from 3.49 yuan in 2024 to 4.81 yuan in 2026 [4] - The company’s return on equity (ROE) is projected to improve from 12.54% in 2024 to 14.02% in 2026 [4] Operational Performance - The company’s operating management has been optimized, contributing to a continuous improvement in gross profit margins [2] - The company’s sales expenses are expected to decrease from 12.92% in 2024 to 12.50% in 2025, indicating better cost management [10] - The company has a strong liquidity position, with a current ratio projected to be 4.32 in 2024 [9]