Goldman Sachs lifted its target price for Beijing Capital International Airport (BCIA)(00694) to HK$8.1 from HK$7.5 and maintained its "buy" rating.
The research house said BCIA runs the second-largest duty-free shopping (DFS) business. Since 2018, when DFS revenue per passenger grew at 27%, BCIA has opened eight new boutiques in Terminal 2 and is renovating the retail offering in Terminal 3.
Goldman expects both of these to boost passenger spending over the coming 1-2 years. It thinks the market has overlooked this emerging DFS revenue stream. It forecast revenue per passenger to rise by 10% in 2019 and a further 5% in 2020, taking concession revenues above the minimum annual guaranteed (MAG) level, creating earnings leverage as spending rises. Goldman raised its 2019-21 earnings forecasts by 4-13%.
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