1、M IdeaChinese Airports|Asia PacificNot Yet Attractive AssetsMorgan Stanley Asia Limited+Tenny SongEquity Analyst Tenny.S +852 3963-1737 Qianlei Fan,CFAEquity Analyst Qianlei.F +852 2239-1875 Jasmine QiuResearch Associate Jasmine.Q +852 2848-8906 Carlos Liu,CFAResearch Associate Carlos.L +852 2848-52

2、06 Hong Kong/China Transportation&InfrastructureAsia PacificIndustry ViewIn-Line Whats Changed Beijing Capital Intl Airport(0694.HK)FromToPrice TargetHK$2.70HK$2.40RatingEqual-weight UnderweightGuangzhou Baiyun Intl Airport(600004.SS)FromToRatingOverweightEqual-weightPrice TargetRmb11.70Rmb10.90Shan

3、ghai International Airport(600009.SS)FromToRatingOverweightEqual-weightPrice TargetRmb37.90Rmb29.40We see secular growth drivers for Chinese airports such as inbound travel and tax-free shopping.However,execution risks remain high considering soft macro and under-developed commercial operations.Move

4、 GBIA,SIAC to EW;BCIA to UW.We see secular growth drivers such as inbound travel and tax-free shopping:Tariffs on non-domestic traffic are 2-3x vs.domestic traffic at Chinese airports,leading to higher profitability of airports.We also see higher spending from foreign visitors,thanks to higher purch

5、asing power,no purchase limit for duty-free(DF)products and competitive product and service prices in China.Retail stores at airports are also encouraged to become tax-free stores,which help attract inbound travellers.However,airports face challenges to efficiently monetize the valuable traffic.:Com

6、mercial revenue rose just 2%and 1%YoY at SIAC and BCIA,respectively,in 1H25.Except for DF,other commercial revenue,including advertising and logistics are also under pressure.We have pointed to commercial operations as being under-developed at Chinese airports.We saw marginal avenues for Chinese air