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].

证券研究报告·公司点评报告·旅游零售Ⅱ 中国中免（601888） 2025 一季报点评：海南降幅继续收窄，关注 市内店和消费政策效果 买入（维持） | [Table_EPS] 盈利预测与估值 | 2023A | 2024A | 2025E | 2026E | 2027E | | --- | --- | --- | --- | --- | --- | | 营业总收入（百万元） | 67,540 | 56,474 | 59,182 | 63,365 | 67,777 | | 同比（%） | 24.08 | (16.38) | 4.80 | 7.07 | 6.96 | | 归母净利润（百万元） | 6,714 | 4,267 | 4,680 | 5,353 | 5,976 | | 同比（%） | 33.46 | (36.44) | 9.68 | 14.38 | 11.63 | | EPS-最新摊薄（元/股） | 3.25 | 2.06 | 2.26 | 2.59 | 2.89 | | P/E（现价&最新摊薄） | 19.20 | 30.22 | 27.55 | 24.08 | 21.58 | [Table_Tag] ...

Core Insights - In 2024, China Duty Free Group (601888.SH) experienced a significant decline in performance due to fluctuations in consumer demand, with revenue dropping to 56.474 billion yuan, a decrease of over 16.4% year-on-year, and net profit falling to 4.27 billion yuan, down 36.4% [1][2] Group 1: Financial Performance - The company's revenue in Q4 2024 was 13.453 billion yuan, a year-on-year decline of 19.5%, while net profit plummeted by 76.9% to 348 million yuan, highlighting short-term operational pressures [1] - In Hainan, the revenue reached 28.892 billion yuan, a decrease of 27.13%, with a gross margin of 23.73%, down 2.03 percentage points [2] - The average spending per customer in Hainan's duty-free shopping dropped by 21.6% to 6,477 yuan per person in 2023, continuing into 2024 [3] Group 2: Market Dynamics - The share of Hainan sales in total sales has decreased from approximately 70% in 2021 to 51.4% recently, indicating a shift in consumer behavior as outbound tourism resumes [2] - The number of shoppers in Hainan's duty-free market fell by 15.9% to 5.683 million, and the number of items purchased decreased by 35.5% to 33.082 million [3] Group 3: Strategic Adjustments - To address the decline in mid-tier consumer spending, the company has adjusted its product mix since 2023, reducing the proportion of cosmetics and introducing high-end brands like LV and Dior [3] - Despite rapid growth in premium product revenue, it has not yet compensated for the decline in cosmetics sales [3] Group 4: Investment Projects - The company has invested 8.098 billion yuan in the Haikou International Duty-Free City project, with a total investment of 911 million yuan in 2024, generating 1.668 billion yuan in revenue to date [4] - The Sanya International Duty-Free City Phase I Project has seen a total investment of 1.846 billion yuan, with 911 million yuan invested in 2024, yielding 312 million yuan in revenue [4] Group 5: Business Expansion - The airport duty-free business showed strong performance, with revenue in Shanghai reaching 16.035 billion yuan, a decline of 10.02%, which is less than the decline in Hainan [5] - The company is expanding its city duty-free store network, having completed six stores in major cities and winning bids for six additional stores in cities like Guangzhou and Shenzhen [6][7]

Investment Rating - The report maintains a "Buy" rating for the company, with a previous rating also being "Buy" [1][4][6]. Core Views - The company faced significant pressure in 2024, with revenue of RMB 56.474 billion, a year-on-year decrease of 16.38%, and a net profit of RMB 4.267 billion, down 36.44% year-on-year. The report anticipates growth from the recovery of port stores and the gradual establishment of city stores [4][9]. - The report highlights the company's increasing market share in the offshore channel, despite a decline in duty-free sales. The company is expected to benefit from the upcoming closure of Hainan Island and ongoing property developments in the region [9]. - The international flight recovery has led to substantial growth in port duty-free sales, with the company's domestic duty-free store sales nearly doubling [9]. - The company is actively expanding its city duty-free operations, which are expected to contribute positively to revenue growth [9]. Financial Summary - The company’s projected revenue for 2025 is RMB 60.533 billion, reflecting a growth rate of 7.2% compared to 2024. The net profit is expected to be RMB 4.716 billion, with a growth rate of 10.5% [8][11]. - The report provides earnings per share (EPS) estimates of RMB 2.28 for 2025, with corresponding price-to-earnings ratios of 26.5, 22.3, and 19.0 for 2025, 2026, and 2027 respectively [6][8]. - The EBITDA for 2025 is projected at RMB 8.154 billion, with a growth rate of 24.5% [11].