Zhi Tong Cai Jing·2025-09-15 07:09Core Viewpoint - UBS reports that China Duty Free Group (601888)(01880) has seen a narrowing decline in revenue for the second quarter year-on-year, but the extent is below market expectations, leading to a downgrade in earnings per share forecasts for 2025 to 2027 by 14% to 12% [1] Group 1: Financial Performance - The company's gross margin and net profit margin have deteriorated due to the impact of sales costs and expenses [1] - UBS maintains a "Buy" rating while raising the target price from HKD 58.4 to HKD 71.2 [1] Group 2: Sales Outlook - It is anticipated that sales at the Hainan duty-free stores will decline by 1% in the second half of the year due to a lower base, with a potential recovery in the fourth quarter [1] - If average customer spending stabilizes, sales in Hainan are expected to grow by 5% and 10% year-on-year in 2026 and 2027, respectively [1]