Core Viewpoint - The report from CICC indicates that Beijing Capital International Airport Co., Ltd. (00694) is currently trading at 0.8 times the 2026 price-to-book ratio, with a target price of HKD 2.9, suggesting a 10% upside potential from the current stock price, maintaining an outperform rating in the industry [1]. Group 1: Company Performance - The company recently released its operational data for the full year of 2025, showing a 5.0% year-on-year increase in passenger traffic, with domestic traffic remaining flat and international traffic increasing by 11%, while the overall civil aviation industry in China saw a 5.5% increase [2]. - The company's performance is slightly weaker than expected, attributed to competition from Daxing Airport and saturated slot capacity, prompting a focus on the slot release situation in 2026 [2]. Group 2: New Duty-Free Contract - A new round of duty-free contracts has been signed, introducing dual duty-free operators, with the new contract set to run from February 11, 2026, to February 10, 2034 [3]. - The new agreement features a "minimum guarantee + commission" model, with the first-year minimum guarantee set at CNY 5.9 billion, slightly higher than the previous contract's CNY 5.6 billion per year, and a 5% commission on sales in the first year, increasing by 1 percentage point each subsequent year [3]. - The static analysis indicates that the new contract's rental level is approximately 10% higher than the previous agreement, despite a lower elasticity of rental to sales, which may incentivize duty-free operators to increase sales volume [3]. Group 3: Profit Forecast and Valuation - The profit forecasts for 2025 and 2026 have been revised down to CNY -308 million and CNY 122 million, respectively, due to lowered passenger traffic growth assumptions, while a new profit forecast for 2027 is introduced at CNY 458 million, assuming a 5% year-on-year growth in passenger traffic and a high single-digit growth in duty-free average transaction value [4].

Core Viewpoint - China Duty Free Group has won multiple bids for duty-free projects at major airports, enhancing its market position and expected to positively impact future business performance [2][3][4]. Group 1: Bid Announcements - China Duty Free Group's subsidiary has been awarded the bid for the duty-free project at Beijing Capital International Airport, with a minimum operating fee of 480 million yuan in the first year and a sales commission of 5% [2]. - The company also secured contracts for duty-free stores at Shanghai Pudong International Airport and Shanghai Hongqiao International Airport, with a joint investment of 102 million yuan, where China Duty Free Group holds a 51% stake [3]. Group 2: Business Impact - The successful implementation of these projects is expected to enhance the company's channel advantages at key domestic airports, catering to diverse shopping needs of inbound and outbound travelers, and promoting high-quality development of airport duty-free business [2][4]. - In the first three quarters of the year, China Duty Free Group reported revenues of 39.86 billion yuan and a net profit of 4.42 billion yuan, reflecting year-on-year declines of 7.34% and 18.89% respectively [4]. Group 3: Membership and Policy Updates - The company has over 45 million members, with increasing activity, consumption share, and repurchase rates, including an online repurchase rate exceeding 35% [4]. - China Duty Free Group emphasizes the continuous optimization of duty-free policies, citing the recent adjustments to the Hainan offshore duty-free policy as an example of ongoing improvements to adapt to market demands [4][5].

Core Viewpoint - China Duty Free Group (中国中免) has won the bidding for duty-free projects at Beijing Capital International Airport and Shanghai airports, marking a significant shift in the domestic airport duty-free market as its subsidiary, Sunrise Duty Free (日上免税行), exits these operations due to lack of support from its major shareholder [3][4][5]. Group 1: Bidding Success - China Duty Free Group's subsidiary won the bid for the duty-free store project at Terminal 3 of Beijing Capital International Airport, with a guaranteed operating fee of 480 million yuan for the first year and a sales commission rate of 5% [3]. - The company has also recently secured two duty-free store projects at Shanghai Pudong International Airport and Shanghai Hongqiao International Airport, previously operated by Sunrise [3][6]. Group 2: Sunrise Duty Free's Exit - Sunrise Duty Free was forced to withdraw from the bidding for the Shanghai airport duty-free stores due to the lack of support from its major shareholder, China Duty Free Group, which holds approximately 51% of Sunrise [4][5]. - The decision to deny Sunrise's participation in the bidding was influenced by a requirement to avoid foreign partnerships in the duty-free business [5]. Group 3: Financial Performance - China Duty Free Group's net profit declined by 36% in 2024, with a further drop of 22.13% in the first three quarters of the current year [6]. - However, recent data from Haikou Customs indicates a 3.4% year-on-year increase in monthly sales for Hainan's duty-free shops as of September 2025, suggesting a recovery trend [6]. Group 4: Cost Structure Changes - The costs associated with operating duty-free stores at airports have decreased compared to pre-pandemic levels. For instance, the guaranteed operating fee for the first year at Beijing Capital International Airport is 480 million yuan, translating to a monthly rent of 3,757 yuan per square meter [6][7]. - In contrast, prior to the pandemic, Sunrise was required to pay 42.5% of its sales as rent to Shanghai Airport, or a minimum sales commission of approximately 6 billion yuan, whichever was higher [7]. Group 5: Market Reaction - Following the announcement of the successful bids, China Duty Free Group's stock price rose by 8.32%, closing at 92.3 yuan [8].

Core Viewpoint - China Duty Free Group (CDFG) has won the bidding for duty-free store projects at Beijing Capital International Airport, indicating the gradual exit of Sunrise Duty Free from the domestic airport duty-free operations [1][4]. Group 1: Bidding and Project Details - CDFG's subsidiary has been confirmed as the winning bidder for the duty-free store project at Terminal 3 of Beijing Capital International Airport, with a minimum operating fee of 480 million yuan for the first year and a sales commission rate of 5% [2]. - CDFG has also recently won bids for two duty-free store projects at Shanghai Pudong International Airport and Shanghai Hongqiao International Airport, all of which were previously operated by Sunrise [2][4]. - The operating period for the Beijing project is set from the contract start date until February 10, 2034, not exceeding eight years [2]. Group 2: Sunrise Duty Free's Exit - Sunrise Duty Free's exit from the bidding process was due to a lack of support from its major shareholder, CDFG, which holds approximately 51% of Sunrise [2][4]. - Sunrise did not participate in the bidding for the new duty-free store operations at Beijing Capital International Airport, as CDFG required that Sunrise not collaborate with foreign partners in the duty-free business [4]. Group 3: CDFG's Financial Performance - CDFG's performance has been under pressure, particularly due to declining sales from its six duty-free stores in Hainan, with a reported net profit decline of 36% year-on-year in 2024 and a further 22.13% drop in the first three quarters of the current year [5][6]. - However, recent data from Haikou Customs indicates a 3.4% year-on-year increase in monthly sales for Hainan's duty-free stores as of September 2025, marking a return to positive growth after 18 months [6]. - The recent wins for the airport duty-free projects are expected to positively impact CDFG's performance, enhancing its channel advantages in core domestic airports [6]. Group 4: Cost Structure Changes - The costs associated with operating duty-free stores at airports have decreased compared to pre-pandemic levels, with CDFG's minimum operating fee for the first year at Beijing Capital International Airport set at 480 million yuan, translating to a monthly rent of 3,757 yuan per square meter [6][7]. - In contrast, prior to the pandemic in September 2018, Sunrise was required to pay 42.5% of its sales as rent to Shanghai Airport or a minimum sales commission (approximately 6 billion yuan), whichever was higher [7].

Group 1 - The core message emphasizes the importance of enhancing the airport's role as a transportation hub and international gateway, focusing on improving passenger and cargo transport efficiency while supporting national strategies and regional economic development [1][2]. - The third phase of the Lukou Airport project is highlighted as a significant initiative to elevate the airport's openness and functionality, with plans to optimize the layout based on passenger needs and industry development [2]. - The airport aims to develop a smart airport by improving operational management and service levels, while also expanding the air cargo sector through collaboration with leading logistics companies and enhancing high-end logistics services [3]. Group 2 - The airport's duty to enhance domestic key routes and improve passenger experience through better route planning and resource allocation is underscored [3]. - The development of the airport's duty-free shops is aimed at showcasing Jiangsu's industrial strength and cultural appeal, with a focus on diversifying product offerings [3]. - The establishment of a one-stop processing center for cross-border e-commerce and international express mail is intended to accelerate cargo development and improve logistics efficiency [3].

Core Insights - The provincial governor emphasizes the importance of the Nanjing Lukou International Airport as a transportation hub and international gateway, aiming to enhance passenger and cargo transport efficiency while boosting the development of the airport economy [1] Group 1: Airport Infrastructure Development - The third phase of the Lukou Airport project is a significant initiative to enhance the airport's openness and capacity, with a focus on optimizing planning based on passenger needs and hub positioning [2] - The governor stresses the need for efficient project management, aiming for early construction and operation of the airport to establish a high-level international aviation hub [2] Group 2: Operational Efficiency and Safety - There is a call for improved operational management and service assurance at the airport, benchmarking against advanced domestic airports to enhance overall efficiency and safety [2] - The development of a smart airport is prioritized, aiming to fully utilize the airport's hub functions and comprehensive capabilities [2] Group 3: Economic Development and Industry Focus - The governor highlights the importance of expanding the airport economy, focusing on key industries such as aviation maintenance, transportation services, modern logistics, and high-end manufacturing [2] - Efforts will be made to attract leading enterprises and cultivate significant industry projects to create new growth points in the airport economy [2] Group 4: Passenger Services and Retail Enhancement - The introduction of a "bus-like" operation for key domestic routes is encouraged to improve passenger convenience, along with optimizing the passenger flight network [3] - Enhancements to the airport's duty-free shops are planned to diversify product offerings and improve consumer services, positioning them as a showcase for Jiangsu's industrial strength and cultural appeal [3] Group 5: Cargo and Logistics Development - The governor emphasizes the need to accelerate cargo development at the airport, advocating for a diversified development model and collaboration with leading freight companies [3] - There is a focus on expanding high-end freight services, including cross-border e-commerce, bonded maintenance, and cold chain logistics, to significantly improve cargo efficiency and service capabilities [3]

Investment Rating - The investment rating for the company is "Buy" and is maintained [10] Core Insights - The company has recently won the bid for duty-free store projects at Shanghai Pudong International Airport and Shanghai Hongqiao International Airport, which is expected to enhance profit-sharing and operational efficiency [2][6] - The new revenue model includes a base fee plus a commission structure, which is rationalized, indicating potential profitability for the operating entities [2][8] - The company is positioned as a leader in China's duty-free industry, with significant competitive advantages accumulated over 40 years, including channel access, scale, and refined operational management [2][8] Summary by Sections Event Description - The company’s subsidiary has received a bid notification confirming the award for duty-free operations at two major airports in Shanghai, with a total operational area of approximately 12,101.53 square meters [6][7] - The investment structure involves a joint venture with a 51% stake held by the company and a 49% stake by Shanghai Airport, with a total investment of 102 million yuan [6][7] Revenue Model - The operational transfer period follows a "5+3" model, with a fixed monthly fee and a commission based on actual sales, ensuring a stable revenue stream [7] - The fixed fees are set at 3,090 yuan/m²/month for Pudong Airport and 2,827 yuan/m²/month for Hongqiao Airport, with commission rates ranging from 8% to 24% [7] Future Outlook - The company is expected to benefit from a recovery in sales as outbound travel increases, with projected net profits for 2025, 2026, and 2027 being 3.69 billion, 4.27 billion, and 4.97 billion yuan respectively [2][8] - The company maintains a strong competitive position in the duty-free market, with anticipated growth in sales driven by increased passenger traffic at airports [2][8]

Core Viewpoint - China Duty Free Group (01880.HK) has won the bid for duty-free store projects at Shanghai Pudong International Airport and Shanghai Hongqiao International Airport, with an operation transfer period of 5+3 years from January 1, 2026, to December 31, 2033 [1] Group 1 - The company will invest RMB 102 million to establish a joint venture with Shanghai Airport, where China Duty Free Group holds a 51% stake and Shanghai Airport holds 49% [1] - The joint venture will operate duty-free stores at the international areas of Terminal 2 and S2 Satellite Hall of Shanghai Pudong International Airport and Terminal 1 of Shanghai Hongqiao International Airport [1] - Winning this project will enhance the company's channel advantages at core domestic airports, catering to the diverse shopping needs of inbound and outbound travelers, and improving the overall duty-free shopping experience [1] Group 2 - Successful implementation of the project is expected to positively impact the company's future operating performance [1]

Core Viewpoint - China Duty Free Group (01880) experienced a decline of over 4%, currently trading at HKD 67.25 with a transaction volume of HKD 122 million [1] Group 1: Policy Changes - Starting from December 18, 2025, Hainan Free Trade Port will officially implement full island closure, introducing a series of policies including import tax item catalog, tax policies for goods circulation, restricted item lists, and duty-free policies for domestic sales of processed goods [1] - The gradual optimization of Hainan Free Trade Port policies is expected to positively impact the company's business operations as high-end consumption begins to recover [1] Group 2: Business Developments - China Duty Free Group has received a bid notification confirming its subsidiary as the winning bidder for duty-free store projects at Shanghai Pudong International Airport and Shanghai Hongqiao International Airport [1] - Contracts have been signed for the operation rights transfer of duty-free stores at Shanghai Pudong International Airport T2 terminal and S2 satellite hall, as well as at Shanghai Hongqiao International Airport T1 terminal [1] - Market attention is focused on the upcoming disclosure of the bid candidates for the capital airport [1]

Core Viewpoint - Shanghai Airport is actively working on the new agreement for duty-free projects, with a public tender announced for duty-free shops at both Pudong and Hongqiao International Airports, amid concerns regarding the participation of Sunrise Duty Free (Shanghai) Co., Ltd. in the bidding process [1][2]. Group 1: Company Developments - Shanghai Airport held a Q3 earnings briefing on December 11, discussing the progress of the new duty-free project agreement [1]. - The public tender for duty-free shops at Shanghai Pudong International Airport and Hongqiao International Airport was announced on November 17, with a submission deadline for bids set for December 9, 2025 [1]. - If Sunrise Shanghai fails to participate in the bidding, it may face dissolution, while a new round of bidding at the Capital Airport has also begun, raising concerns about shareholder dynamics [1][2]. Group 2: Financial Performance - In the previous year, Shanghai Airport's duty-free contract revenue was 1.212 billion yuan, a decline of over 30% year-on-year, while Q1 of this year saw revenue of 343 million yuan, down 1.15% year-on-year [3]. - From 2017 to 2019, Sunrise Shanghai's rent payments to Shanghai Airport increased annually, reaching 5.210 billion yuan in 2019, which constituted 47.60% of its annual revenue [3]. - Due to the pandemic, duty-free shop rental income significantly decreased from 1.156 billion yuan in 2020 to 363 million yuan in 2022, but in 2023, the related duty-free business saw a recovery with revenue of 1.788 billion yuan, nearly quadrupling year-on-year [3].