1H22: Double-digit Drop; Focusing On Future Growth And Core Competitiveness
CTGDF’s revenue dropped 37.5%/22.2% yoy in 2Q22/1H22 and core earnings dipped 43.7%/25.4% yoy. Gross margin shrank 4.4ppt yoy but widened 5.5ppt hoh in 1H22. Duty-free sales declined 34% yoy in 1H22. We maintain it as our top pick among covered consumer names given its increasing core competitiveness and leading position in the growing duty-free market in China. Maintain BUY and trim the target price slightly to Rmb273.00.