Shares of China Tourism Group Duty Free jumped on strong preliminary 2023 earnings, as growth in international travel gains momentum after China's post-pandemic reopening.

The duty-free retailer's Hong Kong-listed shares rose 8% in early trade Tuesday and were up 9% on the Shanghai Stock Exchange.

The world's largest travel retailer said Monday that it expects revenue in 2023 to have increased 24% from the previous year to 67.58 billion yuan (US$9.44 billion), and forecasts net profit to have gained 34% to CNY6.72 billion. Analysts said the preliminary results were broadly in line with expectations.

The company's recent agreements to lower the fees paid to international airports in Beijing and Shanghai would give it more space on pricing and promotion strategies, Citi analysts said in a research note. Also, a more favorable duty-free policy for downtown stores could be on the cards as international-travel momentum accelerates this year, Citi added.

Analysts from CMB International said the luxury spending in two duty-free stores in Hainan province shows strong consumption sentiment among high-end customers.

However, the weak trend in consumption among general Chinese residents is unlikely to be reversed in the short term, the analysts added. The duty-free retailer's revenue growth will likely align with the pace of China's macroeconomic recovery in 2024 to 2025, they said.

Citi and CMB International both keep their buy rating on China Tourism Group Duty Free.

(China Tourism Group is the member of IMTA)

Editor Ⅰ: Zhang Wenwen

Editor Ⅱ: Wu Dan

Editor Ⅲ: Liu Guosong