JIC has raised its target price for CTG DUTY-FREE (01880) from HK$60 to HK$90, reflecting stronger earnings growth momentum and improved prospects under favorable policy support. The "Outperform" rating is maintained.

CTG DUTY-FREE reported a 29% year-on-year decline in Q3 2025 net profit to RMB 452 million, missing both the bank's and market expectations. However, the sales decline narrowed compared to the previous quarter, while gross margin remained stable at 32%-33%.

Looking ahead, JIC expects gradual operational improvements. Optimized product and merchandise mix should support stable gross margins, though rising sales, marketing, rental, and personnel costs from business expansion may slow operating margin growth.

China has introduced multiple new duty-free policies aimed at boosting domestic consumption, enhancing Hainan's tourism sector, and expanding shopping channels for both local and international consumers. Preliminary data from Hainan shows positive policy responses. As a leading duty-free retailer in the region, CTG DUTY-FREE is positioned as a key beneficiary of these measures.