Results Review

3Q25 results slightly beat our expectationsShanghai International Airport announced its 3Q25 results:Revenue rose 7.46% YoY and 5.64% QoQ to Rmb3.36bn, andnet profit attributable to shareholders grew 52.52% YoY and12.32% QoQ to Rmb590mn. The firm’s results slightly beat ourexpectations, mainly due to better-than-expected financialexpenses and investment income.

3Q25 revenue growth outpaces operating data; DFS rentgrowth turns positive YoY. In 3Q25, passenger throughput atthe two airports in Shanghai increased 6% YoY, with passengervolume on domestic and international routes rising 3% and 15%YoY. The firm’s revenue grew 7% YoY, outpacing passengergrowth. We attribute this to faster volume growth oninternational routes with higher prices than on domestic routes,and a boost from non-aviation business. In 3Q25, the firmrecognized Rmb314mn in rental income from duty-freecontracts, up 18% YoY. The firm’s duty-free shop (DFS) rentgrowth turned positive for the first time since 2Q24 and slightlyoutpaced passenger volume growth on international routes.

Effective cost and expense control. In 3Q25, the firm’soperating costs rose 1% YoY while financial expenses fell 39%YoY, boosting operating leverage. In addition, the firm’sinvestment income grew 26% YoY to Rmb269mn.

Trends to watch

Watch new round of DFS contracts. According to the firm’sannouncement on July 21, 2018 (Notice of Selection for AirportDuty-Free Shops), we expect the current DFS contract withSunrise Duty Free to expire at the end of 2025, and we suggestwatching progress in the next phase of the contract.

Financials and valuation

We keep our 2025 and 2026 attributable net profit forecastsunchanged at Rmb2.26bn and Rmb2.74bn. The stock is trading　　at 34.9x 2025e and 28.8x 2026e P/E. We maintain anOUTPERFORM rating and target price of Rmb34.5, implying38x 2025e and 31.4x 2026e P/E with 8.9% upside.

Risks

Disappointing recovery of passenger traffic and/or developmentof the DFS business; sharper-than-expected cost growth.