Equity Analysis /

CN : China Tourism Group Duty Free - First-mover advantage on Hainan still strong

    Lei Yang
    Lei Yang

    Research Analyst

    13 April 2021
    Published by

    CDF announced its key 1Q21 headline numbers. Sales grew by 137.5% yoy to Rmb18.1bn, and net profit was Rmb2.8bn in 1Q21 (1Q20: Rmb120m loss), accounting for 27% of our FY21F estimates, which is largely in line. Since its negotiations with Beijing airport are still ongoing, there is potential for CDF to reduce its accrued rental expenses if an agreement is reached. We maintain a positive view on CDF’s long-term growth prospects and forecast that its sales will grow by 47% yoy in FY21F, with net profit up by 74% yoy to Rmb10.6bn, owing to the inclusion of more high-end brands in Haitian’s duty-free sales and a likely recovery in airport duty-free stores.