CICC has revised down its profit forecasts for Beijing Airport (00694) for 2026 and 2027 to RMB19 million and RMB321 million respectively, from previous estimates of RMB122 million and RMB458 million, primarily due to lowered assumptions for passenger traffic growth. The current share price implies price-to-book ratios of 0.6x and 0.5x for 2026 and 2027. Considering persistent earnings pressure and potential liquidity challenges following the stock's removal from the Hong Kong Stock Connect program, the firm reduced its target price by 21% to HK$2.3, based on a 2026 P/B ratio of 0.7x versus 0.9x previously. This implies a 28% upside from the current share price. An Outperform rating is maintained.
Key points from CICC’s analysis include:
**2025 results met market expectations** The company reported 2025 revenue of RMB5.632 billion, up 3% year-on-year. Operating loss and net loss attributable to shareholders were RMB-236 million and RMB-630 million, respectively, compared with losses of RMB-347 million and RMB-1.390 billion in 2024. Second-half 2025 revenue reached RMB2.877 billion, up 2% year-on-year, with operating loss and net loss at RMB-161 million and RMB-466 million, versus losses of RMB-89 million and RMB-1.013 billion in the second half of 2024. The results were in line with market expectations.
**Slow second-half 2025 revenue growth due to flight movements and non-aeronautical business performance** Aeronautical revenue in the second half of 2025 was RMB1.426 billion, up 3% year-on-year. Passenger throughput and aircraft movements increased 6% and 1%, respectively, with the slow growth in movements partly attributed to slot capacity constraints. Non-aeronautical revenue in the second half of 2025 was RMB1.451 billion, up 2% year-on-year, with retail concession revenue rising 11% to RMB280 million, likely benefiting from improved duty-free sales.
**Low single-digit cost growth in second-half 2025** Operating costs increased 2% year-on-year in the second half of 2025. Excluding concession management fees, operating costs remained largely flat. Despite higher staff costs, the company demonstrated effective cost control.
**Increase in planned flights for new season** According to Beijing Daily, Beijing Airport is expected to handle an average of 1,305 daily flights, up 4.6% year-on-year. Passenger traffic growth is expected to benefit modestly from the increased flight schedule.
**Potential short-term pressure on share price after removal from Stock Connect** Based on announcements from the Shanghai and Shenzhen stock exchanges, the company will be removed from the Hong Kong Stock Connect list effective March 9, 2026. As of March 9 and March 25, 2026, Stock Connect holdings accounted for 25.1% and 20.0% of H-shares, respectively.
Risks include weaker-than-expected duty-free sales, lower passenger traffic, and higher-than-expected cost growth.
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