China Duty Free’s third-quarter net profit fell 28.9% year-on-year; plans to distribute 2.50 yuan for every 10 shares | Financial Report News

China Duty Free’s third-quarter net profit fell 28.9% year-on-year; plans to distribute 2.50 yuan for every 10 shares | Financial Report News

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Against the backdrop of overall weakness in global consumption, China Tourism Group Duty Free’s revenue in the third quarter stagnated, with net profit dropping sharply year-on-year. Despite performance pressure, the company still plans to implement its first-ever interim dividend, distributing over 500 million yuan in cash dividends for the first three quarters.

Key points are as follows:

  • Q3 single-quarter revenue was 11.711 billion yuan, down 0.38% year-on-year; revenue for the first three quarters was 39.862 billion yuan, down 7.34% year-on-year;
  • Q3 net profit attributable to shareholders was 452 million yuan, a sharp drop of 28.94% year-on-year; net profit attributable to shareholders for the first three quarters was 3.052 billion yuan, down 22.13% year-on-year;
  • First-ever interim dividend: the company plans to distribute 517 million yuan in cash dividends for the first three quarters (2.50 yuan per 10 shares), accounting for 16.95% of net profit attributable to shareholders for the period.

Performance remains under pressure, deteriorating cash flow worth noting

In Q3, China Tourism Group Duty Free continued to show significant operating pressure. The year-on-year revenue decline narrowed to 0.38%, but net profit attributable to shareholders was only 452 million yuan, plunging 28.94% year-on-year.

The Q3 weighted average ROE was only 0.82%, down 0.36 percentage points from the same period last year, with shareholder returns at an extremely low level.

The cash flow situation is also concerning. Net operating cash flow in the first three quarters was 3.388 billion yuan, down 33.62% year-on-year. The company explained that this was mainly due to a reduction in sales receipts.

Monetary funds dropped from 34.817 billion yuan at the beginning of the year to 31.969 billion yuan, down 2.848 billion yuan, but the absolute scale remains relatively ample.

Operating costs for the first three quarters were 26.889 billion yuan, down 6.54% year-on-year. Selling expenses were 6.457 billion yuan, down 4.98% year-on-year, but the selling expense ratio rose from 15.80% to 16.20%.

Hainan duty free sees positive growth, channel expansion accelerates

Amid overall performance pressure, the Hainan duty free business showed noteworthy positive signals. According to Haikou Customs data, September 2025 saw Hainan offshore duty free sales grow 3.4% year-on-year, the first positive growth in 18 months.

During the reporting period, the company deepened the integration of the "duty free + cultural tourism" model by introducing POP MART’s first national exhibition, Sanya’s first Disney Store pop-up, and more, aiming to activate consumption through a "duty free + experience + social" composite model.

Facing sluggish growth in the traditional duty free market, China Tourism Group Duty Free is accelerating the diversification of its channel layout. In Q3, the company opened new downtown duty free stores in Shenzhen, Guangzhou, and Chengdu, all using a "duty free + taxed" dual-track operating model.

The balance sheet shows construction in progress increased from 972 million yuan at the start of the year to 1.487 billion yuan, a rise of 53%, indicating continued capital expenditure expansion.

Dual concerns: High inventories and investment income turning negative

There are two other noteworthy details in the financial report. The inventory scale reached as high as 17.219 billion yuan, although down slightly by 129 million yuan from the start of the year, but still accounting for 22.81% of total assets.

Investment income turned into a loss of 53.63 million yuan, compared with a profit of 21.92 million yuan in the same period last year. This was mainly due to investment income from associates and joint ventures of -53.63 million yuan (same period last year: +18.81 million yuan). Long-term equity investment decreased from 3.670 billion yuan at the start of the year to 3.596 billion yuan, a drop of 74.07 million yuan.

Other current assets surged from 1.976 billion yuan at the beginning of the year to 4.447 billion yuan, an increase of 125%.

First-ever interim dividend proposed

Based on the results of the first three quarters of 2025, the company will distribute a cash dividend of 2.50 yuan per 10 shares (including tax) to all shareholders, totaling 517 million yuan, accounting for 16.95% of net profit attributable to shareholders for the period. This is the company's first interim dividend in history.

The company explained this move as "improving investor returns." As of the end of the reporting period, owner’s equity attributable to the parent company was 55.674 billion yuan, up 577 million yuan from the beginning of the year. Ample cash on the books ensures a strong ability to pay dividends.

This dividend proposal is subject to approval at the shareholders’ meeting. Looking at historical dividend yield, the company’s annual dividend payout ratio has generally been between 30%-40%. If maintained for the full year, this means that fourth-quarter and full-year performance will be crucial.

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