By Jiahui Huang


China Tourism Group Duty Free shares jumped after the company signed agreements to lower fees paid by the company to airports in Beijing and Shanghai.

The duty-free retailer's Hong Kong-listed shares ended Thursday's session 11% higher at 76.35 Hong Kong dollars (US$9.78), marking their largest percentage gain on record. The company's mainland China-listed shares closed 8.5% higher at 85.02 yuan (US$11.91), the largest daily percentage gain since November 2022.

The Beijing-based company signed supplemental agreements with the operators of Beijing Capital International Airport, Shanghai Pudong International Airport and Shanghai Hongqiao International Airport to amend the calculation of fees paid by China Tourism Duty Free to the airports, according to company filings on Wednesday.

The fees paid to the airports will now depend on whichever is higher between guaranteed sales commission paid to the airport and actual sales commission, effective Dec. 1, China Tourism Group Duty Free said.

Guolian Securities analysts Wenhui Deng and Jing Cao calculated the company's guaranteed annual rent at CNY710 million for the Shanghai airports and CNY560 million for Beijing Capital Airport. That's significantly lower than the prepandemic rent level of around CNY3.5 billion for Shanghai Pudong Airport and approximately CNY3 billion for the Beijing Capital Airport, they noted.

The new agreement eases rental pressure on China Tourism Group Duty Free given that international passenger traffic is gradually recovering after the pandemic, Guolian Securities said.

The move reflects the company's ability to negotiate prices with parties along its supply chain, which should help moderate rental pressure during uncertain times, Guang Zeng and Xiao Zhong from Guosen Securities said in a note.


Write to Jiahui Huang at jiahui.huang@wsj.com


(END) Dow Jones Newswires

12-28-23 0345ET