CTG Duty Free Looks to Earnings Catalyst to Snap 39% Rout

(Bloomberg) — Shares of China Tourism Group Duty Free Corp. may be poised to change direction after a weak run this year, as stabilizing sales and rising demand from its key business in Hainan bolster the outlook, analysts say.

The company’s mainland-listed shares have fallen 25% this year, making it one of the worst performers on the CSI 300 Index, while its Hong Kong-listed shares are down nearly 39% from February’s high. A potential catalyst for a turnaround could emerge when the travel retailer reports final full-year earnings later Monday, which could offer clearer signals about the pace of the recovery.

CTG Duty Free’s outlook is increasingly tied to a recovery in its Hainan business, which accounts for more than half of revenue, as recent policy support and improving travel flows begin to boost sales. Investors are now looking to earnings and management guidance for confirmation that demand has stabilized and the recovery can be sustained in the coming months.

“The worst is over for CTG Duty Free,” said Doris Gu, consumer analyst at CSC International Holdings. “The recovery trend is becoming clearer, supported by a number of Hainan policies, with both foot traffic and spending per customer recovering, as well as inbound tourism and airport duty-free sales improving.”

Supportive policies such as “unlimited purchases on purchases” for local residents, as well as an expanded product offering, are expected to bolster Hainan’s duty-free growth outlook and potentially lead to a rebound in earnings in 2026, according to Citigroup Inc.

“We expect the Hainan duty-free trend to improve from March onwards and be a positive catalyst,” Morgan Stanley analysts including Hildy Ling wrote in a note. While they remain cautious about CTG’s overall valuation, “they continue to see Hainan duty-free sales rising 25-30% in full year 2026.”

Read: China Duty Free Group Preliminary Fiscal Year Net Income 3.59 Billion Yuan

–With help from Lulu Shen.

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