Investment Rating - The report maintains a "Recommended" rating for Shenzhen Airport [6][8]. Core Views - The company reported a revenue of 3.84 billion yuan for the first three quarters of 2025, representing a year-on-year increase of 10.8%, and a net profit attributable to shareholders of 468 million yuan, up 43% year-on-year [3]. - The growth in profitability is attributed to the ongoing recovery in operations from 2024, with a notable low base effect in the first half of the year. However, the growth rate in Q3 2025 has moderated compared to previous quarters [3]. - The company is prioritizing international routes as domestic passenger growth slows, with Q3 2025 showing a 3.1% increase in passenger throughput compared to the same period in 2019 [4]. Summary by Sections Financial Performance - For Q3 2025, the company achieved a revenue of 1.31 billion yuan, a year-on-year increase of 8.0%, and a net profit of 156 million yuan, up 2.2% year-on-year. The net profit excluding non-recurring items was 142 million yuan, reflecting a 12.3% increase [3]. - The gross margin for Q3 2025 was 21.8%, showing a slight decline compared to previous periods, with total revenue and operating costs increasing by 8.0% and 10.0% respectively [5]. - Investment income significantly increased, with Q3 2025 reporting 54 million yuan, compared to 37 million yuan and 32 million yuan in Q2 and Q3 of 2024 respectively [5]. Operational Developments - The third runway expansion project was completed in August 2025, paving the way for future operational enhancements. The T2 terminal area and supporting projects have also commenced construction [5]. - The company is expected to benefit from the opening of the Shenzhen-Zhongshan Corridor and the Shenzhen-Jiangmen Railway, enhancing its position as a hub in the Greater Bay Area [6]. Earnings Forecast - The forecast for net profit attributable to shareholders is adjusted to 640 million yuan for 2025 and 785 million yuan for 2026, with corresponding PE ratios of 23 and 19 [7][12].

Core Viewpoint - The company, operating Shenzhen Bao'an International Airport, is experiencing continuous operational improvements due to the recovery of the civil aviation industry, with significant increases in passenger and cargo throughput expected in the coming years [1][2]. Group 1: Operational Performance - In 2024, the airport will have 186 passenger routes and is expected to handle 61.477 million passengers, ranking second in domestic passenger throughput [1]. - For the first half of 2025, the airport recorded 221,000 aircraft movements, a year-on-year increase of 7.2%, and a 26.1% increase compared to the same period in 2019 [1]. - Cargo throughput reached 188.1 million tons in 2024, maintaining the top position in domestic cargo and mail throughput [1][2]. Group 2: Non-Aeronautical Business Development - The joint venture for duty-free business commenced operations in November 2023, with projected revenue of 210 million yuan and a net loss of 36 million yuan in 2024, which may temporarily impact profitability but enhance competitive strength in the long term [2]. - Advertising revenue is expected to reach 390 million yuan in 2024, reflecting a year-on-year increase of 3.3%, with operating profit of 387 million yuan [2]. - The logistics revenue is projected at 450 million yuan in 2024, with operating profit of 88 million yuan, supported by significant growth in domestic and international cargo throughput [2]. Group 3: Infrastructure Expansion and Shareholder Returns - The third runway is expected to be operational by the end of 2025, with the T2 terminal bidding completed, which will impact revenue and cost structures [3]. - The company commits to distributing at least 45% of its distributable profits as cash dividends annually, with a projected dividend payout ratio of 55.6% for 2024, up from 51.7% in 2023 [3]. Group 4: Financial Forecasts - The forecast for net profit attributable to shareholders for 2025 has been adjusted to 620 million yuan, down from the previous estimate of 740 million yuan, with new projections for 2026 and 2027 set at 770 million yuan and 920 million yuan, respectively [4]. - The company maintains a "buy" rating despite economic fluctuations and moderate recovery in non-aeronautical business [4].