CTG DUTY-FREE(601888) 西南证券·2024-04-02 16:00Investment Rating - The investment rating for the company is "Hold" [1] Core Views - The company's performance in 2023 met expectations, with a revenue of 67.54 billion yuan, a year-on-year increase of 24.1%, and a net profit of 6.71 billion yuan, up 33.5% year-on-year [2] - The recovery of duty-free business is significant, with duty-free sales revenue reaching 44.23 billion yuan, a 69.9% increase year-on-year [2] - The tourism market is expected to remain strong, with a predicted increase in domestic tourism participation by 24.9% in 2024, which will likely boost the company's sales [2] - The company is accelerating its market layout in Hainan, enhancing its competitive edge by introducing new brands and expanding its product offerings [3] - The company is expanding its international presence through partnerships with major airports and participation in industry events [3] - Earnings per share (EPS) forecasts for 2024-2026 are 3.83 yuan, 4.50 yuan, and 5.19 yuan, with corresponding dynamic price-to-earnings ratios of 22x, 19x, and 16x [3] Summary by Sections Financial Performance - In 2023, the company achieved a revenue of 67.54 billion yuan, with a gross margin of 31.8% and a net margin of 10.8% [2] - The sales expense ratio increased to 14.0%, reflecting higher leasing costs due to post-pandemic recovery in airport traffic [2] - The company’s financial expenses showed a significant decrease, with a financial expense ratio of -1.3% [2] Market Outlook - The company is expected to benefit from a high tourism market, with a 91.48% willingness to travel among residents in early 2024 [2] - The domestic tourism market is projected to grow significantly, which will likely enhance the company's duty-free sales [2] Strategic Developments - The company has added 177 new domestic and international brands in Hainan, strengthening its competitive position in the duty-free market [2] - New projects and expansions in Hainan, including the opening of new duty-free stores, are underway [3] Earnings Forecast - Revenue projections for 2024-2026 are 78.75 billion yuan, 90.29 billion yuan, and 103.24 billion yuan, with growth rates of 16.59%, 14.66%, and 14.34% respectively [4] - Net profit forecasts for the same period are 7.92 billion yuan, 9.30 billion yuan, and 10.74 billion yuan, with growth rates of 18.04%, 17.36%, and 15.44% respectively [4]