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China Tourism Group Duty Free / Estun Automation Technology / Kerry Properties / Kingboard Laminates / PDD / QTech / Sinopharm / Tinci Materials / Tongcheng Travel / XPeng Motors
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Company Results | China Tourism Group Duty Free (601888 CH/BUY/Rmb52.06/Target: Rmb77.10)
CTGDF’s 1H26 results are in line with its preliminary announcement. In 1H26, Hainan achieved steady growth of 23%. However, revenue from Shanghai and other regions declined 32% yoy. Its main business’ gross margin improved by 0.5ppt yoy to 32.7%, driven by: a) higher-margin sales on the online platform; b) narrower discounts under pricing control; and c) favourable procurement costs driven by the renminbi appreciation. Looking ahead, management expects further upside in gross margin. Maintain BUY; cut target price by 14% to Rmb77.10.
Company Results | Estun Automation Technology (002747 CH/HOLD/Rmb30.82/Target: Rmb28.20)
Estun’s 2Q26 results were in line with its preliminary announcement. Revenue grew 4.3% yoy and 11.9% qoq to Rmb1.36b, an 11.6% miss vs consensus, but gross margin beat at 33.1% (+6.0ppt yoy, +2.7ppt qoq) and core net profit swung to Rmb51m. Management reiterated its 2026 targets of around 45,000 robot shipments, a 10-11% domestic market share and Rmb300m net profit. Maintain HOLD and raise target price to Rmb28.20.
Company Results | Kerry Properties (683 HK/BUY/HK$19.45/Target: HK$27.80)
Kerry's 1H26 underlying net profit fell 9.4% yoy to HK$782m, as lower property sales recognition was cushioned by a 5.8ppt yoy rise in Hong Kong development margins and steady rental growth. Net gearing eased 2.0ppt hoh to 31.3%, with about 30% guided for end-26; DPS held at HK$0.40. Branksome Crest being converted to sale (launched in 4Q26, estimates at >HK$6b) is a positive surprise, and will support both deleveraging and earnings. Overall development momentum remains intact. Maintain BUY, with a target price of HK$27.80.
Company Results | Kingboard Laminates (1888 HK/BUY/HK$35.10/Target: HK$42.43)
KBL's 1H26 revenue/net profit soared 58%/209% yoy respectively on multiple laminates ASP hikes, meaningful gross margin expansion and operating leverage. KBL is stepping up capacity expansion for high-end specialty fibreglass yarn and fabric. We expect the price of laminates and upstream materials to remain at an elevated level in 2H26 due to intensifying supply shortage and estimate that AI-related specialty yarn will contribute 3.3%/10.6%/12.8% of 2026-28 revenue respectively. Maintain BUY with a higher target price of HK$42.43 from HK$25.30.
Company Results | PDD Holdings (PDD US/BUY/US$88.38/Target: US$115.00)
PDD reported mixed 2Q26 results. Total revenue increased 8%, 2-4% below our and consensus estimates. Adjusted net profit declined 12% yoy to Rmb28b, supported by higher interest/investment income of Rmb13.5b, largely in line with our expectation. Gross margin expanded 1.4ppt yoy to 57.3%. Non-GAAP net margin dropped 6ppt yoy to 25.4%, due to higher G&A expenses. Upgrade to BUY with a higher target price of US$115.00.
Company Results | Q Technology Group (1478 HK/HOLD/HK$6.18/Target: HK$6.70)
Q Tech reported 1H26 revenue of Rmb9.9b (+12.4% yoy), supported by continued market share gains in CCM and rapid expansion in automotive and IoT. However, mix deteriorated and gross margins declined 0.8ppt yoy to 6.6%; coupled with a 24.2% yoy surge in R&D expenses, net profit missed expectations and declined 10.5% yoy to Rmb276m. Q Tech highlighted several key future growth pillars such as AI optics, AR glasses, and robotics, though commercialisation remains nascent. Maintain HOLD. Target price: HK$6.70.
Company Results | Sinopharm Group (1099 HK/HOLD/HK$16.33/Target: HK$17.00)
Sinopharm’s 1H26 results were largely in line, with revenue down 1.1% yoy and net profit attributable to shareholders down 1.8% yoy to Rmb3.4b. Gross margin narrowed 0.37ppt yoy to 6.74% on the expanded scale of VBP, but effective expense control and savings in finance costs cushioned the bottom line. Amid policy headwinds, Sinopharm strives for growth by focusing on product and service optimisation. Maintain HOLD with an unchanged target price of HK$17.00.
Company Results | Tinci Materials (002709 CH/BUY/Rmb37.48/Target: Rmb54.00)
2Q26 net profit missed our estimate at Rmb1,855m (+268% yoy/+28% qoq), due to disappointing gross margin. Revenue grew 127% yoy, beating estimate, on an upbeat ASP hike. The revenue beat on ASP reflected Tinci’s ability to pass through rising LiPF6 costs, but the pass-through was incomplete, resulting in a miss in gross margin. We cut our 2026-28 net profit forecasts by 4%/10%/10% respectively on higher ASP and lower gross margin. Maintain BUY and cut target price from Rmb75.00 to Rmb54.00.
Company Results | Tongcheng Travel Holdings (780 HK/BUY/HK$13.10/Target: HK$18.00)
TT’s 2Q26 results are largely in line with expectations. Revenue grew 6.8% yoy to Rmb5.0b, broadly in line with our and street expectations. Adjusted net profit increased 9.8% yoy to Rmb851m, also in line with forecasts, while adjusted net margin expanded 0.5ppt yoy to 17.1%, supported by gross margin improvement and operating leverage. 3Q26 revenue is guided to grow 3-8% yoy, while adjusted net profit should come in at Rmb1.1b-1.15b. Maintain BUY with a lower target price of HK$18.00.
Company Results | XPeng Motors (9868 HK/BUY/ HK$47.68/Target: HK$60.00)
2Q26 results missed expectations with a net loss of Rmb1,337m (+180% yoy/-25% qoq). The miss lies in ASP and SG&A. We lift our 2026 net loss estimate by 60% to Rmb3,235m, and cut our 2027-28 net profit forecasts by 46%/13% to Rmb1,437m/Rmb4,620m respectively. Looking ahead, XPeng’s bottom line will be driven by a strong product cycle, globalisation, software licensing and service revenue. Maintain BUY and cut target price from HK$90.00 to HK$60.00.
Top Stories
Company Results | China Tourism Group Duty Free (601888 CH/BUY/Rmb52.06/Target: Rmb77.10)
CTGDF’s 1H26 results are in line with its preliminary announcement. In 1H26, Hainan achieved steady growth of 23%. However, revenue from Shanghai and other regions declined 32% yoy. Its main business’ gross margin improved by 0.5ppt yoy to 32.7%, driven by: a) higher-margin sales on the online platform; b) narrower discounts under pricing control; and c) favourable procurement costs driven by the renminbi appreciation. Looking ahead, management expects further upside in gross margin. Maintain BUY; cut target price by 14% to Rmb77.10.
Company Results | Estun Automation Technology (002747 CH/HOLD/Rmb30.82/Target: Rmb28.20)
Estun’s 2Q26 results were in line with its preliminary announcement. Revenue grew 4.3% yoy and 11.9% qoq to Rmb1.36b, an 11.6% miss vs consensus, but gross margin beat at 33.1% (+6.0ppt yoy, +2.7ppt qoq) and core net profit swung to Rmb51m. Management reiterated its 2026 targets of around 45,000 robot shipments, a 10-11% domestic market share and Rmb300m net profit. Maintain HOLD and raise target price to Rmb28.20.
Company Results | Kerry Properties (683 HK/BUY/HK$19.45/Target: HK$27.80)
Kerry's 1H26 underlying net profit fell 9.4% yoy to HK$782m, as lower property sales recognition was cushioned by a 5.8ppt yoy rise in Hong Kong development margins and steady rental growth. Net gearing eased 2.0ppt hoh to 31.3%, with about 30% guided for end-26; DPS held at HK$0.40. Branksome Crest being converted to sale (launched in 4Q26, estimates at >HK$6b) is a positive surprise, and will support both deleveraging and earnings. Overall development momentum remains intact. Maintain BUY, with a target price of HK$27.80.
Company Results | Kingboard Laminates (1888 HK/BUY/HK$35.10/Target: HK$42.43)
KBL's 1H26 revenue/net profit soared 58%/209% yoy respectively on multiple laminates ASP hikes, meaningful gross margin expansion and operating leverage. KBL is stepping up capacity expansion for high-end specialty fibreglass yarn and fabric. We expect the price of laminates and upstream materials to remain at an elevated level in 2H26 due to intensifying supply shortage and estimate that AI-related specialty yarn will contribute 3.3%/10.6%/12.8% of 2026-28 revenue respectively. Maintain BUY with a higher target price of HK$42.43 from HK$25.30.
Company Results | PDD Holdings (PDD US/BUY/US$88.38/Target: US$115.00)
PDD reported mixed 2Q26 results. Total revenue increased 8%, 2-4% below our and consensus estimates. Adjusted net profit declined 12% yoy to Rmb28b, supported by higher interest/investment income of Rmb13.5b, largely in line with our expectation. Gross margin expanded 1.4ppt yoy to 57.3%. Non-GAAP net margin dropped 6ppt yoy to 25.4%, due to higher G&A expenses. Upgrade to BUY with a higher target price of US$115.00.
Company Results | Q Technology Group (1478 HK/HOLD/HK$6.18/Target: HK$6.70)
Q Tech reported 1H26 revenue of Rmb9.9b (+12.4% yoy), supported by continued market share gains in CCM and rapid expansion in automotive and IoT. However, mix deteriorated and gross margins declined 0.8ppt yoy to 6.6%; coupled with a 24.2% yoy surge in R&D expenses, net profit missed expectations and declined 10.5% yoy to Rmb276m. Q Tech highlighted several key future growth pillars such as AI optics, AR glasses, and robotics, though commercialisation remains nascent. Maintain HOLD. Target price: HK$6.70.
Company Results | Sinopharm Group (1099 HK/HOLD/HK$16.33/Target: HK$17.00)
Sinopharm’s 1H26 results were largely in line, with revenue down 1.1% yoy and net profit attributable to shareholders down 1.8% yoy to Rmb3.4b. Gross margin narrowed 0.37ppt yoy to 6.74% on the expanded scale of VBP, but effective expense control and savings in finance costs cushioned the bottom line. Amid policy headwinds, Sinopharm strives for growth by focusing on product and service optimisation. Maintain HOLD with an unchanged target price of HK$17.00.
Company Results | Tinci Materials (002709 CH/BUY/Rmb37.48/Target: Rmb54.00)
2Q26 net profit missed our estimate at Rmb1,855m (+268% yoy/+28% qoq), due to disappointing gross margin. Revenue grew 127% yoy, beating estimate, on an upbeat ASP hike. The revenue beat on ASP reflected Tinci’s ability to pass through rising LiPF6 costs, but the pass-through was incomplete, resulting in a miss in gross margin. We cut our 2026-28 net profit forecasts by 4%/10%/10% respectively on higher ASP and lower gross margin. Maintain BUY and cut target price from Rmb75.00 to Rmb54.00.
Company Results | Tongcheng Travel Holdings (780 HK/BUY/HK$13.10/Target: HK$18.00)
TT’s 2Q26 results are largely in line with expectations. Revenue grew 6.8% yoy to Rmb5.0b, broadly in line with our and street expectations. Adjusted net profit increased 9.8% yoy to Rmb851m, also in line with forecasts, while adjusted net margin expanded 0.5ppt yoy to 17.1%, supported by gross margin improvement and operating leverage. 3Q26 revenue is guided to grow 3-8% yoy, while adjusted net profit should come in at Rmb1.1b-1.15b. Maintain BUY with a lower target price of HK$18.00.
Company Results | XPeng Motors (9868 HK/BUY/ HK$47.68/Target: HK$60.00)
2Q26 results missed expectations with a net loss of Rmb1,337m (+180% yoy/-25% qoq). The miss lies in ASP and SG&A. We lift our 2026 net loss estimate by 60% to Rmb3,235m, and cut our 2027-28 net profit forecasts by 46%/13% to Rmb1,437m/Rmb4,620m respectively. Looking ahead, XPeng’s bottom line will be driven by a strong product cycle, globalisation, software licensing and service revenue. Maintain BUY and cut target price from HK$90.00 to HK$60.00.
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