Bank of America Securities: Maintains a "neutral" rating on China Tourism Group Duty Free Corporation (01880), limited room for stock revaluation.

Bank of America Securities released a research report stating that they have lowered their earnings forecast for China Tourism Group Duty Free Corporation (01880) for 2026 by 10% to reflect weaker-than-expected first quarter performance. The target price for China Tourism Group Duty Free Corporation's A shares (601888.SH) has been lowered from 95 RMB to 85 RMB, which is equivalent to a forecasted 2026 P/E ratio of 35 times, roughly in line with the historical median of 34 times. The bank believes that the growth in duty-free sales may have peaked in the first quarter and that there is limited potential for stock revaluation, maintaining a "neutral" rating. In the first quarter, China Tourism Group Duty Free Corporation's core net profit increased by 21% year-on-year to 2.3 billion RMB, in line with market expectations but lower than the bank's forecast. During the period, revenue increased by 1% year-on-year to 16.9 billion RMB, with sales in Hainan growing by 28% to 12.6 billion RMB, indicating a decline in airport duty-free and online sales during the quarter, falling short of the bank's expectations. Gross profit margin increased by 0.6 percentage points year-on-year to 33.6%, while core net profit margin increased by 2.2 percentage points to 13.8%.