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UBS Lifts CTG DUTY-FREE's TP to HKD90.73; Offshore Duty-Free Sales in Hainan May Accelerate as Earnings Catalyst
2025-12-19 11:43:52
UBS has released a research report raising its 2026-27 earnings forecasts for CTG DUTY-FREE (01880.HK) by 7-12%. Believing that the worst period for offshore duty-free sales in Hainan has passed, the broker also expects CTG DUTY-FREE's net profit to grow by 34%/ 21% YoY in 2026-27, reversing the decline seen in 2024 and 2025.

Under the new policy for offshore duty-free shopping in Hainan, UBS noticed that the range of duty-free goods had expanded further and the customer base had become more diverse, including cross-border travelers and Hainan residents. This implies that purchasing agents, who contributed as much as 35% to Hainan's offshore duty-free sales in 2021, may return (currently contributing only 5%).

UBS has elevated its forecasts for offshore duty-free sales in Hainan for 2026-27 to 21% and 36%, indicating growth rates of 27% and 23% for the respective years. The optimized offshore duty-free shopping policy is expected to drive growth in CTG DUTY-FREE's offshore duty-free sales in Hainan, although this factor has not yet been fully reflected in the market.

CTG DUTY-FREE's target price was raised by UBS from HKD71.2 to HKD90.73, with a rating reiterated as Buy.
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