CTG DUTY-FREE(SH:601888) Ping An Securities·2024-04-24 05:30Investment Rating - The report maintains a "Recommended" investment rating for the company [2][6]. Core Views - The company's Q1 2024 revenue was 18.807 billion yuan, a year-on-year decline of 9.45%, while net profit attributable to shareholders increased by 0.25% to 2.306 billion yuan [3][4]. - The decline in revenue is attributed to the impact of Hainan's duty-free business, which saw a 24.5% year-on-year decrease in duty-free sales amounting to 12.764 billion yuan [3][4]. - The company's gross margin improved by 4.31 percentage points to 33.41%, and net margin increased by 1.08 percentage points to 12.95% in Q1 [3][4]. - The company is expected to benefit from the recovery of inbound and outbound duty-free business, with sales gradually rebounding as consumer sentiment improves [6][7]. Summary by Sections Financial Performance - Q1 2024 revenue: 18.807 billion yuan, down 9.45% year-on-year - Q1 2024 net profit: 2.306 billion yuan, up 0.25% year-on-year - Q1 gross margin: 33.41%, up 4.31 percentage points - Q1 net margin: 12.95%, up 1.08 percentage points [3][4][6]. Future Outlook - Revenue projections for 2024-2026 are 74.2 billion yuan, 90.4 billion yuan, and 111.6 billion yuan respectively, with corresponding P/E ratios of approximately 20.0, 16.4, and 13.3 [6][7]. - The company is positioned as a global leader in travel retail, with a favorable valuation compared to peers [6][7]. Market Conditions - The recovery of international flights and passenger traffic is significant, with Q1 2024 international and regional flights at 81.92% and 73.49% of 2019 levels respectively [4][6]. - The company has signed supplementary agreements with key airports to optimize commission rates compared to 2019 [4][6].