2021.09.02
■ CDF announced that sales in 1H21 grew strongly by 84% yoy to Rmb35.5bn, and net profit up was by 476% yoy to Rmb5.4bn (49%/139% yoy in 2Q21), in line, driven mainly by a low base in 1H20 and Hainan duty-free policy stimulus.
■ Because of Covid-19 volatility and intensifying competition on Hainan, we expect sales to grow by 26% in 2H21F with net profit dropping slightly by 11% yoy because of the high base of 286% yoy net profit growth in 2H20.
■ With more large brands gradually starting to cooperate with CDF, we expect the Company’s product structure to continue to improve, and the integration of its online platforms to also drive growth. We now expect the Company’s sales to grow by 29% yoy in FY22F and 30% yoy in FY23F.
■ Reiterate Add with a lower DCF-based TP of Rmb340.
