Investment Rating - The report maintains a "Buy" rating for the company [7][8]. Core Views - The company reported a revenue of 16.746 billion RMB in Q1 2025, a year-over-year decrease of 10.96%, with a gross margin of 32.98% [1]. - The decline in duty-free sales is expected to stabilize as the high base effect diminishes, leading to a potential recovery in operations [1]. - The company is positioned to benefit from various supportive policies, a rebound in inbound and outbound passenger flow, and an upgrade in product structure, which could enhance profitability [1]. - The new "buy and refund" tax policy is anticipated to boost consumer spending among inbound tourists [3]. - The company has plans to upgrade existing city stores and add new ones, which is expected to capture additional inbound customer traffic [3]. Summary by Sections Financial Performance - Q1 2025 revenue was 16.746 billion RMB, with a net profit of 1.938 billion RMB, reflecting a year-over-year decline of 15.98% [1]. - The company forecasts EPS of 2.26, 2.56, and 2.91 RMB for 2025, 2026, and 2027 respectively [4]. Market Trends - Duty-free sales in January, February, and March 2025 were 3.13 billion, 5.28 billion, and 2.90 billion RMB, with year-over-year declines narrowing to -5.3% in March [2]. - The recovery in airport passenger flow is evident, with significant increases in international passenger throughput [2]. Valuation - The target price for A-shares is set at 79.1 RMB, and for H-shares at 73.08 HKD, reflecting a premium based on the company's leading position in the duty-free market [4].

Investment Rating - The report maintains a "Buy" rating for the company [4][6]. Core Views - The company experienced a decline in revenue and net profit in 2024, with total revenue of 56.47 billion yuan, down 16.38% year-on-year, and a net profit of 4.27 billion yuan, down 36.44% year-on-year [1][4]. - Despite the decline, the company is expected to benefit from the recovery of duty-free consumption and has strengthened its market share in the Hainan duty-free market, which increased by nearly 2 percentage points year-on-year [3][4]. - The company has expanded its operations in various channels, including winning bids for duty-free projects at multiple airports and renewing agreements for city duty-free stores [3]. Summary by Sections Financial Performance - In Q4 2024, the company reported revenue of 13.45 billion yuan, a year-on-year decrease of 19.46%, and a net profit of 0.35 billion yuan, down 76.93% year-on-year [1]. - The gross profit margin for Q4 2024 was 28.5%, with a year-on-year decline of 3.5 percentage points [2]. Market Trends - The decline in Hainan's duty-free sales has narrowed, with sales of 8.41 billion yuan in January-February 2025, down 13.3% year-on-year, compared to a 29.3% decline for the entire year of 2024 [2]. Profit Forecasts - The profit forecasts for 2025 and 2026 have been revised down by 35.2% and 36.2%, respectively, with expected net profits of 4.97 billion yuan and 5.59 billion yuan [4][5]. - The report also includes a new forecast for 2027, projecting a net profit of 6.18 billion yuan [4]. Valuation Metrics - The report provides valuation metrics, including an expected EPS of 2.40 yuan for 2025 and a P/E ratio of 25 [5][12].