With the strong growth momentum of international tourism, China Free (01880.HK) achieved operating revenue of 67.576 billion yuan in 2023, an increase of 24.15% over the previous year; net profit attributable to shareholders was 6.717 billion yuan, an increase of 33.52% over the previous year. Net profit for the fourth quarter was 1,510 billion yuan, up 275.62% year on year.

China's Hong Kong-listed stock prices rose 8% in early Tuesday trading, and A-shares stopped intraday. According to the agency, China's fourth quarter results exceeded market expectations, and profitability improved.

The company recently reached an agreement to reduce the fees it pays at Beijing and Shanghai international airports, which will provide more room for its pricing and promotional strategies. Citibank analysts said in a research report that as the momentum of international travel accelerates this year, downtown stores may enjoy more preferential tax exemption policies.

CMB International analysts pointed out that luxury consumption data from two duty-free shops in Hainan Province showed strong consumer sentiment among high-end customers. However, analysts added that the trend of weak consumption by ordinary residents is unlikely to be reversed in the short term, and the revenue growth of this duty-free retailer may be in line with the pace of China's macroeconomic recovery in 2024 and 2025.

Both Citibank and CMB International maintain China's free “buy” rating.