Summary of Shenzhen Airport Conference Call Company Overview - **Company**: Shenzhen Airport - **Period**: First half of 2025 Key Financial Performance - **Revenue**: CNY 2.53 billion, up 12.3% year-on-year [2][3] - **Net Profit**: CNY 310 million, up 79.1% year-on-year, marking a record high for the same period since opening [2][3] Passenger and Cargo Operations - **Passenger Growth**: Domestic passenger growth of 9.2%, ranking first among the top ten airports [2][3] - **Total Passenger Volume**: 32.57 million, with a total of 130 domestic routes and 50 international routes [2][3][4] - **Cargo Volume**: 983,000 tons, with a year-on-year increase of 14.1% [3] - **New Routes**: Added domestic routes to Shihezi, Longnan, and others; international routes to Vientiane, Mexico City, and others [2][4][5][6] Future Projections - **Annual Passenger Target**: Aiming for 63 million to 65 million passengers despite summer growth slowdown due to weather [2][7] - **Cross-Border E-commerce Growth**: Expected growth rate of approximately 20%, higher than the overall international market [2][11] Impact of External Factors - **US-China Tariff Impact**: Minimal impact on operations; US cargo accounts for only 10% of total cargo volume [2][8][9] - **Logistics Adjustments**: Diversifying logistics routes to mitigate risks from US tariffs [10] Infrastructure and Capital Expenditure - **Major Projects**: Ongoing construction of a third runway and T2 terminal, with total investment exceeding CNY 10 billion [15][16] - **Logistics Revenue Growth**: Increased by 57% due to the operation of Shenchuang International Cargo Station, contributing CNY 93 million in revenue [12][13] Business Segment Performance - **Leasing and Concession Business**: Low growth, with duty-free business remaining flat due to promotional activities and market conditions [14] - **Advertising Revenue**: Grew by 9% in the first half of 2025, but future growth may be impacted by reduced advertising spending from companies [18] Strategic Partnerships and Operations - **Airline Cooperation**: Preference for concentrated cooperation with major airlines, such as Shenzhen Airlines and China Southern Airlines [24] - **International Route Development**: Continued support for key international routes, with a focus on market sustainability [22][23] Assessment Metrics - **Performance Evaluation**: Focus on financial metrics (revenue, profit) and operational metrics (flight departures, passenger volume) [25]

Investment Rating - The report maintains a "Recommend" rating for Shenzhen Airport, indicating an expected outperformance of the benchmark index by 10%-20% over the next six months [3][18]. Core Views - The company reported a net profit of 310 million yuan for H1 2025, representing a year-on-year increase of 79%. The logistics business showed strong performance, and capacity is expected to continue to be released [2][6]. - The target price for the stock is set at 8.72 yuan, with the current price at 7.20 yuan, indicating a potential upside of 21% [3][6]. - The company is benefiting from the opening of the Shenzhen-Zhongshan Channel and the upcoming three-runway project, which will enhance its capacity and operational efficiency [6][8]. Financial Performance - For H1 2025, total revenue reached 2.528 billion yuan, a year-on-year increase of 12.3%, while net profit was 312 million yuan, up 79% [6][7]. - The revenue breakdown shows that the aviation business generated 1.106 billion yuan (up 10.3%), logistics business 273 million yuan (up 57%), and ground services 394 million yuan (up 10.6%) [6][7]. - The company’s operating costs for H1 2025 were 1.917 billion yuan, reflecting a year-on-year increase of 6.3% [6][7]. Future Projections - The report forecasts total revenue for 2025 to be 5.187 billion yuan, with a net profit of 632 million yuan, corresponding to a PE ratio of 23 times [2][8]. - For 2026 and 2027, net profit is projected to be 778 million yuan and 922 million yuan, respectively, with PE ratios of 19 and 16 times [2][8]. Market Position - Shenzhen Airport ranked first among the top ten airports in China for domestic passenger throughput, with 29.52 million domestic passengers in H1 2025, a year-on-year increase of 9.2% [6][7]. - The international and regional passenger throughput reached 3.05 million, marking a significant year-on-year increase of 30.7% [6][7].