(Bloomberg) — China Tourism Group Duty Free Corp.’s shares may be poised to shift course after a weak run this year, as stabilizing sales and improving demand from its key Hainan business support the outlook, analysts say.
The company’s mainland-listed shares have fallen 25% this year, making it one of the worst performers on the benchmark CSI 300 Index, while its Hong Kong-listed stock has dropped about 39% from a February high. A potential catalyst for a turnaround may come later Monday, when the travel retailer reports final full-year earnings, which may offer clearer signals on the pace of a recovery.
The outlook for CTG Duty Free is increasingly tied to a rebound in its Hainan business, which generates more than half of revenue, as recent policy support and improving travel flows begin to lift sales. Investors are now looking to earnings and management guidance for confirmation that demand is stabilizing and that the recovery can be sustained in the months ahead.
“The worst for CTG Duty Free is over,” said Doris Gu, consumer analyst at CSC International Holdings. “The recovery trend is becoming clearer, supported by a series of Hainan policies, with both foot traffic and spending per shopper rebounding, alongside improving inbound tourism and airport duty‑free sales.”
The supportive policies, such as “unlimited pick-up on purchase” for local residents, along with an expanding product offering are expected to underpin Hainan’s duty-free growth outlook, potentially driving an earnings rebound in 2026, according to Citigroup Inc.
“We do expect the Hainan duty free sales trend to improve from March and be a positive catalyst,” Morgan Stanley’s analysts including Hildy Ling wrote in a note. While remaining cautious on CTG’s overall valuation, they “continue to see Hainan duty free sales growing 25-30% for full-year 2026.”
Read: China Duty Free Group Prelim FY Net Income 3.59 Billion Yuan
–With assistance from Lulu Shen.
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