Morgan Stanley released a research report stating that it lowered the target price for China's free trial (01880) from HK$60 to HK$55, and the rating was “in line with the market.”
According to the report, Hainan was the main factor dragging down China's travel retail market last year, and sales of offline duty-free shops fell 29% year on year to 30.9 billion yuan. Due to the lower base and the possibility that China Free China will offer more discounts, the year-on-year decline in offline duty-free sales in Hainan narrowed to 5% in December 2024, and the impact is likely to decline in 2025.
Damo believes that the recovery of China's expended port business is on the right track. As a result, China's revenue and net profit forecast for last year was only slightly lowered by 2%. For 2025 and 2026, the bank lowered its revenue forecast by 2% and its net profit forecast by -7%/-4%, reflecting the impact of increased port sales mix and more promotional activities.
