市场环境艰难，盈利能力有所下滑：The company released its report for the third quarter of 2024:
(1) In the first three quarters of 2024, the company achieved operating income of 8.499 billion yuan/ -8.27%, realized net profit due to mother 0.427 billion yuan/ -34.13%, and achieved net profit of 0.359 billion yuan/ -39.12% after deducting non-return to mother. During the reporting period, the company's revenue declined due to rapid changes in the market environment, consumer behavior, and consumption structure.
(2) 2024Q3: The company achieved operating income of 2.464 billion yuan/ -14.61%, achieved net profit of 0.134 billion yuan/ +2.53%, and realized net profit without deduction of 0.039 billion yuan/ -70.54%.
The market environment is difficult, and profitability has declined:
(1) The company's gross profit margin for the first three quarters of 2024 was 40.17% /-4.95pcts, and the net profit margin was 5.17% /-2.38pcts. Sales expense ratio 14.51% /+0.81pct, management expense ratio 14.94% /+2.95pcts, financial expense ratio 1.90% /-0.36pct.
(2) 2024Q3: The company's gross profit margin is 38.29%/-13.84pcts, net profit margin 5.08%/-0.28pcts. Sales expense ratio 16.35% /+1.81pcts, management expense ratio 18.13% /+6.88pcts, financial expense ratio 2.19% /-0.95pcts.
Revenue declined in most business formats, and the duty-free business performed brilliantly:
In terms of business format, Wangfujing Department Store's revenue was 3.242 billion yuan/ -15.45%, and gross profit margin was 33.35%/-1.27pcts. Shopping center business revenue 2.254 billion yuan/ -1.58%, gross profit margin 43.65%/-4.73 pcts. The outlet business revenue was 1.65 billion yuan/ +4.37%, and the gross profit margin was 59.59%/-3.49pcts. The specialty store business revenue was 1.078 billion yuan/ -4.97%, and the gross profit margin was 14.99%/-2.58pcts. Tax-free business revenue 0.204 billion yuan/ +68.62%, gross profit margin 16.75% /+0.93pct. This is due to the fact that during the reporting period, the company successfully obtained exit duty-free operation rights from Harbin Taiping International Airport and Mudanjiang Hailang International Airport, and signed the “Harbin Taiping International Airport New Duty Free Shop Project Contract” and the “Mudanjiang Hailang International Airport Duty Free Shop Project Contract” with Beijing Capital Airport Trading Co., Ltd.
Investment advice:
Buy-A investment rating, 6-month target price of 16.18 yuan. We expect the company's revenue growth rates from 2024 to 2026 to be -3.0%, 7.6%, and 6.5%, respectively, and the net profit growth rates will be -13.7%, 28.8%, and 15.4%, respectively; given a buy-A investment rating, the target price for 6 months is 16.18 yuan, which is equivalent to a dynamic price-earnings ratio of 30x in 2024.
Risk warning: offline consumer demand falls short of expectations, industry competition intensifies, management and operation risks, new business formats fall short of expectations, etc.
