China Tourism Group Duty Free | Asia Pacific 2Q26 preliminary results: sequentially weaker as expected

Research evidence excerpt

China Tourism Group Duty Free | Asia Pacific 2Q26 preliminary results: sequentially weaker as expected

Update

July 14, 2026 03:22 PM GMT

Morgan Stanley Asia Limited+MChina Tourism Group Duty Free | Asia Pacific Hildy Ling

Equity Analyst

2Q26 preliminary results: Hildy.Ling@morganstanley.comLillian Lou +852 2239-7834

Lillian.Lou@morganstanley.com +852 2848-6502

sequentially weaker as expected

Reaction to earnings

Unchanged In-line Modest revision lower

Impact to our thesis Financial results versus consensus Direction of next 12-month

consensus EPS China Tourism Group Duty Free (1880.HK, 1880 HK)

Source: Company data, Morgan Stanley Research China/Hong Kong Consumer | China

Stock Rating Equal-weight

Industry View In-Line

Key Takeaways Price target HK$77.00

Shr price, close (Jul 14, 2026) HK$47.94

The 2% revenue decline and 20% operating profit decline in 2Q26 should not be 52-Week Range HK$107.00-46.00

a surprise as Hainan duty-free sales growth has decelerated visibly since April Sh out, dil, curr (mn) 116

Mkt cap, curr (mn) Rmb104,245.0

Still, the 8.5% reported OPM in 2Q26, -1.9ppt yoy, is not impressive; especially as EV, curr (mn) Rmb75,612.9

Avg daily trading value (mn) HK$219

GPM for the main business actually expanded 1.44ppt yoy.

We believe FX losses can explain part of the OPM compression, but we await

interim results in late Aug for more detail on the operating deleverage.

The YoY comp for the Hainan DF market is low for 3Q, yet recent trends from

related travel industries (e.g. hotels and transportation) are mixed.

Exhibit 1: CTG Duty Free: 2Q26 preliminary results

Preliminary results (Rmb mn) 1Q25 2Q25 3Q25 4Q25 1Q26 2Q26

Revenue 16,746 11,405 11,711 13,831 16,906 11,177

Reported operating profit 2,519 1,189 777 819 2,793 949