Shares of CTG DUTY-FREE (HKG: 01880) rose more than 6% during the morning trading session. At the time of writing, the stock was up 5.55% to HK$58, with a turnover of HK$717.27 million.

The positive movement follows the latest data from the State Administration of Foreign Exchange, which shows the Renminbi's exchange rate against the US dollar stood at 6.80 as of May 2026, representing an appreciation of approximately 6% from the 7.23 level recorded at the end of last year.

Analyst Perspectives on Currency Impact

Analysts have highlighted the significant impact of the Renminbi's appreciation on the duty-free sector's profitability. It is noted that in a year-on-year comparison for 2026, a 1% appreciation in the Renminbi exchange rate is estimated to boost gross margin by approximately 0.5 percentage points.

Furthermore, CTG DUTY-FREE is seen as strengthening its advantages through continuous supply chain optimization. This enhancement is expected to increase the company's bargaining power with premium upstream brands, further solidifying its core supply chain strength and providing robust support for its gross margin.

Second Quarter Performance Outlook

Market observers point to a valuation dip for leading duty-free operators in the first quarter, attributed to concerns over profitability levels, weaker daily sales, performance during the Labor Day holiday, and capital market dynamics.

Looking ahead to the second quarter, the outlook appears more favorable. Government-level initiatives in Hainan are expected to support daily sales. Additionally, the completion of the terminal transfer at northern airports in Q1 is anticipated to help narrow the sales decline in Q2. The full-quarter consolidation of DFS sales and the resumption of shipments from the Shanghai warehouse are projected to drive further revenue growth for the period.

While certain performance-related factors persist, the overall trend for profitability remains positive. It is noted that the company's current valuation has retreated to levels seen before the announcement of Hainan's customs closure policy, suggesting a potential opportunity for investors.