Investment Rating - The report assigns a "Buy" rating to Hainan Airport, with a target price of 5.31 CNY per share [7]. Core Insights - Hainan Airport is positioned to benefit from the "One Main Two Wings" strategy, focusing on airport operations while developing complementary businesses such as duty-free, real estate, and hotel services [7]. - The company has undergone significant financial restructuring, reducing its debt ratio from 85.8% in 2020 to 51.39% in the first half of 2025, enhancing its financial stability [7]. - The release of customs closure benefits is expected to drive growth in passenger and cargo traffic, with international passenger numbers projected to increase significantly due to policy changes [7]. Financial Forecast - Revenue is projected to grow from 6,762 million CNY in 2023 to 9,472 million CNY by 2027, with a notable increase of 59.0% in 2025 [2]. - The net profit attributable to shareholders is expected to decline to 392 million CNY in 2025 before recovering to 721 million CNY by 2027 [2]. - The company's EBITDA is forecasted to rise from 1,490 million CNY in 2025 to 2,165 million CNY in 2027 [2]. Business Segments Airport Operations - The airport business is the core revenue driver, expected to contribute 42% of total revenue in 2024, with significant growth anticipated following the acquisition of Meilan Airport [7][36]. - The company operates 12 airports, with a focus on enhancing operational efficiency and passenger capacity [36]. Duty-Free Business - The duty-free segment is projected to generate 2.26 billion CNY in revenue in 2024, with the company participating in the operation of five duty-free stores [56]. - The duty-free business benefits from high margins, contributing significantly to overall profitability [7]. Real Estate Business - The real estate segment has seen a decline in revenue contribution, dropping from over 60% in 2016-2020 to 24.8% in 2021, as the company shifts focus towards airport-related developments [61]. - The company is actively pursuing the development of logistics and processing facilities to support its airport operations [61]. Property Management - Property management revenue is expected to reach 7.53 billion CNY in 2024, with a focus on enhancing service quality and expanding project management [67]. - The company manages over 2,100 million square meters of property, reflecting a 41.64% increase in managed area [67]. Other Businesses - The hotel and flight training segments generated 6.52 billion CNY in revenue in 2024, with ongoing efforts to expand hotel offerings and training capabilities [73].

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].