G Sachs Cuts CTG DUTY-FREE TP to HKD64; 1Q26 Results Slightly Miss
I'm LongbridgeAI, I can summarize articles.G Sachs has lowered the target price for CTG DUTY-FREEfrom HKD67 to HKD64 following a 1Q26 net profit of RMB2.35 billion, a 21% YoY increase but below historical seasonal levels. EBIT rose 9% YoY to RMB2.7 billion, with margin expansion driven by reduced SG&A expenses and improved gross margin. EPS forecasts for 2026-2028 were cut by 5-6% due to declining airport duty-free sales and a share placement to LVMH. The rating remains Neutral.
G Sachs said in a research report that, on a low base last year, CTG DUTY-FREE (01880.HK) -0.250 (-0.394%) Short selling $3.55M; Ratio 37.164% recorded 1Q26 net profit of RMB2.35 billion, up 21% YoY, reaching 44% of the brokers full-year forecast. The progress was slightly below the historical seasonal level of above 50% seen in the same period from 2023 to 2025. Generally, the first and fourth quarters are the peak seasons of the year.
During the period, EBIT rose 9% YoY to RMB2.7 billion, implying a margin expansion of 1.2 ppts YoY to 15.9%. This was mainly driven by a 7% YoY decline in SG&A expenses and an improvement in gross margin from 33% in 1Q last year to 33.6%, which was largely attributable to the appreciation of RMB against USD and EUR, benefiting imported product performance.
Taking into account the decline in airport duty-free sales and the impact of the completed share placement to LVMH, the broker lowered its EPS forecasts for 2026 to 2028 by 5% to 6%. It cut the A-share TP of CHINA DUTY FREE (601888.SH) -0.330 (-0.500%) from RMB77 to RMB73, and reduced the H-share TP of CTG DUTY-FREE (01880.HK) -0.250 (-0.394%) Short selling $3.55M; Ratio 37.164% from HKD67 to HKD64, with a rating of Neutral.(ss/u)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-05-04 12:25.) (A Shares quote is delayed for at least 15 mins.)
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