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[Travel News]: CDFG parent company reveals strong growth in sales and earnings in 2020

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The following is the [Travel News]: CDFG parent company reveals strong growth in sales and earnings in 2020 from [Moodie Davitt Report] recommended by TheTourAttraction.com:

CTG Duty Free is expected to register an +82.2% growth in earnings in FY21 to RMB10.8 billion.

China Duty Free Group parent company China Tourism Group Duty Free Corp has revealed its preliminary results for FY2020, with revenues climbing by +8.1% year-on-year to RMB52.6 billion (US$8.1 billion) and a +32.1% leap in net profit to RMB6.1 billion (US$947 million).

The company attributed the strong earnings performance to several factors including the enhanced offshore duty free policy in Hainan Island since 1 July; growth in high-margin goods including luxury bags, watches & jewellery and reduced rent to be paid to Shanghai Airport Authority under a just-announced new contract agreement (more details to follow).

Commenting on the performance, CFA Analyst/Insight Provider Osbert Tang, who publishes on Smartkarma, said the above factors should also have a positive impact in H1 2021.

Looking at prospects ahead, the analyst noted: “It is positive to see CTG Duty Free beating expectations in FY20, and we expect the Street to upgrade earnings forecasts for the next two years. We expect the full-year benefit of the new Hainan duty free policies to be realised in FY21, and the signing of a new duty free agreement with Shanghai International Airport is also favourable.

“We expect CTG Duty Free to register an +82.2% growth in earnings in FY21 to RMB10.8 billion. This is forecast to be followed by around +30% annual growth for FY22 and FY23. In H121, we believe the stock will be driven by positive news flow on the good YoY growth momentum; though as we said, CNY sales are likely to be not as good as originally expected.”

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