Core Insights - The company reported a revenue of 6.35 billion in H1 2025, representing a year-on-year increase of 4.8%, and a profit of 1.04 billion, up 28.1% year-on-year [1] - The company is adjusting its profit forecasts for 2025-2026 due to the recovery of international travelers and changes in non-aviation business [4] Financial Performance - H1 2025 revenue was 6.35 billion, with a profit of 1.04 billion and a non-recurring profit of 1.03 billion, showing increases of 4.8%, 28.1%, and 27.5% respectively [1] - In Q2 2025, revenue reached 3.18 billion, with a profit of 0.53 billion and a non-recurring profit of 0.51 billion, reflecting year-on-year increases of 4.8%, 22.4%, and 21.6% respectively [1] - Investment income for H1 2025 was 0.46 billion, up 26.7% year-on-year, while Q2 2025 investment income was 0.247 billion, a 4.1% increase [2] Cost and Expense Analysis - H1 2025 operating costs were 4.68 billion, a slight decrease of 0.34% year-on-year, with labor costs increasing by 0.43%, amortization costs decreasing by 0.76%, and operational maintenance costs increasing by 0.76% [2] - Financial expenses amounted to 0.23 billion, up 16.6% year-on-year, primarily due to a decrease in bank deposit interest income, while management expenses were 0.32 billion, an 8.0% increase [2] Business Segment Performance - Aviation revenue for H1 2025 was 2.92 billion, up 8.35% year-on-year, while non-aviation revenue was 3.44 billion, a 1.93% increase [3] - Within non-aviation, commercial catering revenue was 1.09 billion, down 1.9%, logistics service revenue was 0.83 billion, up 0.76%, and other non-aviation revenue was 1.51 billion, up 2.3% [3] - Duty-free revenue for H1 2025 was 0.628 billion, down 3.1%, and advertising contract revenue was 0.297 billion, down 8.0% [3] Operational Data - At Pudong Airport, takeoffs and passenger throughput increased by 5.71% and 11.61% year-on-year respectively in H1 2025, with domestic passenger throughput up 3.8% and international passenger throughput up 23.1% [3] - At Hongqiao Airport, takeoffs and passenger throughput increased by 3.06% and 4.75% year-on-year respectively in H1 2025 [3] Dividend Information - The company announced a cash dividend of 2.1 yuan per 10 shares (including tax), totaling 0.52 billion (including tax), with a mid-year cash dividend payout ratio of 50.05% for 2025 [3] Investment Outlook - The profit forecasts for 2025 and 2026 have been adjusted to 2.17 billion and 2.70 billion respectively, with a new forecast for 2027 at 3.06 billion, leading to EPS estimates of 0.87, 1.08, and 1.23 yuan for 2025-2027 [4] - The company is expected to benefit from the ongoing recovery of international travelers, positioning airports as significant duty-free sales channels, and anticipates a long-term value return from international hub airports [4]

Investment Rating - The investment rating for the company is "Buy" [3] Core Insights - In Q2 2025, the company's net profit attributable to shareholders increased by 81.5% year-on-year, with a total revenue of 3.73 billion yuan, up 7.7% year-on-year [1][2] - The company is undergoing a significant expansion project, with a total investment exceeding 50 billion yuan, expected to be completed by 2025, which will increase annual passenger throughput capacity to 120 million [2] - The company is expected to see a recovery in both aviation and non-aviation revenues as passenger traffic continues to recover [2] Financial Summary - For H1 2025, the company achieved a net profit of 750 million yuan, a year-on-year increase of 71.3%, with a forecasted net profit of 1.37 billion yuan for 2025 [3][8] - The projected revenue for 2025 is 7.98 billion yuan, reflecting a 7% increase from 2024 [3] - The company's earnings per share (EPS) is expected to be 0.58 yuan in 2025, with a price-to-earnings (P/E) ratio of 17.03 [3][8]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 11.50, up from the previous target of HKD 11.00 [6][5][17] Core Views - The company reported a revenue of RMB 1.079 billion for 1H25, a decrease of 6.1% year-on-year, with a net loss attributable to shareholders of RMB 70 million, which is a 71.7% improvement compared to the previous year [1][3] - The weak performance in passenger traffic, which decreased by 4.1% to 13.91 million passengers, is attributed to changes in popular travel destinations and competition from other airports and transport modes [2][4] - The company is expected to benefit from the upcoming Hainan Free Trade Port policies, which are anticipated to stimulate passenger flow and enhance the operational efficiency of the airport [4][5] Financial Performance Summary - The company's operating costs for 1H25 were RMB 1.046 billion, an increase of 5.5% year-on-year, leading to a gross profit decline to RMB 33 million [3] - The report projects a downward revision of the company's net profit for 2025 to a loss of RMB 76 million, with subsequent years showing a recovery to profits of RMB 271 million in 2026 and RMB 499 million in 2027 [5][10] - The earnings per share (EPS) are forecasted to be -0.16 for 2025, 0.57 for 2026, and 1.05 for 2027 [10][5] Market Position and Future Outlook - The establishment of a joint venture with Changi Airport Group is expected to enhance the company's ability to monetize non-aeronautical revenues [1][4] - The anticipated completion of the acquisition of control over Hainan Airport is expected to improve the utilization of aviation resources on Hainan Island, reinforcing the company's hub status [4][5] - The report highlights the potential for long-term profitability improvements driven by the Free Trade Port's benefits and the company's capacity expansion [5][4]