Broker: CGS International
Date of Report: July 22, 2025
China Tourism Group Duty Free and Trip.com: Technical Buy Signals, Market Trends, and Trade Setups for 2025
Market Recap: Corporate America, Tariff Risks, and Earnings in Focus
The week kicked off with heightened activity in global markets as investors watched for signals of resilience in corporate earnings amid mounting tariff risks. Major U.S. indices saw their earlier gains pared back, with the S&P 500 barely advancing—up just 0.1% but closing above the 6,300 level for the first time. Energy shares declined in tandem with oil prices, and chipmakers gave up most of their earlier gains as Nvidia slipped. Investors are closely watching for updates from AI bellwethers, with Tesla and Alphabet set to report earnings, which could set the tone for the rest of the season.
On the macro front, longer-dated U.S. Treasuries rallied, with the 30-year yield falling four basis points to 4.95%. The U.S. dollar weakened against all major developed market currencies, while the Japanese yen strengthened following comments from Japan’s Prime Minister Shigeru Ishiba, who vowed to remain in office despite his coalition’s loss of a majority in the upper house. Trade policy remains a wildcard as President Trump is anticipated to issue more unilateral tariff letters before August 1, with further trade deals possible ahead of the deadline.
Trip.com Group Ltd (HKG: 9961): Strong Summer Travel Prospects Amid Market Competition
Key Points:
- Domestic travel and outbound travel revenues are forecasted to rise by mid-to-high single digits and mid-to-high teens year-on-year, respectively, for the summer holiday period (July 1 to August 31, 2025).
- Recently, JD and Douyin have increased their subsidies for online travel agencies (OTAs). However, Trip.com’s dominant position in the high-end hotel segment is expected to shield it from significant market share losses due to these moves.
- For Q2 2025, Trip.com’s revenue is projected to increase by 14.5% year-on-year. However, non-GAAP net profit is expected to decline by 10.3% year-on-year, reflecting the impact of aggressive overseas expansion strategies.
- Recommendation: Retain Add rating with a DCF-based target price of HK\$588.0 (WACC: 10.1%, Terminal Growth: 3%).
China Tourism Group Duty Free Corp Ltd (HKG: 1880): Technical Buy – Signs of a Major Bottom
China Tourism Group Duty Free Corp Ltd, a leading retailer specializing in duty-free and tax goods including tobacco, wine, spirits, perfumes, cosmetics, fashion, accessories, watches, jewelry, food, luggage, and more, is showing strong technical signals for a bottom reversal. The company is also involved in investing and developing tourism destination commercial complexes.
Trade Setup and Technical Analysis
| Last Price |
Entry Prices |
Support Levels |
Stop Loss |
Resistance Levels |
Target Prices |
| 56.55 |
56.55, 50.00, 45.50 |
50.00 (S1), 43.02 (S2) |
39.90 |
62.36 (R1), 80.41 (R2) |
80.40 (TP1), 96.00 (TP2), 106.00 (TP3), 113.00 (TP4) |
Technical Snapshot: Bullish Indicators
- The stock has broken out of a diamond bottom formation, a classic bullish reversal pattern.
- Prices have established a higher low, indicating potential for further gains.
- Ichimoku cloud analysis signals strong bullish momentum.
- MACD histogram is positive, with the MACD and signal lines rising steadily towards the zero line.
- The Stochastic Oscillator is trending higher, confirming upward momentum.
- The 23-period Rate of Change (ROC) is positive.
- The Directional Movement Index (DMI) shows bullish strength is building.
- Trading volume has expanded robustly, supporting the validity of the breakout.
Recommendation Framework: Ratings and Definitions
| Stock Rating |
Definition |
| Add |
Total return expected to exceed 10% over the next 12 months. |
| Hold |
Total return expected between 0% and +10% over the next 12 months. |
| Reduce |
Total return expected to fall below 0% over the next 12 months. |
The total expected return of a stock includes both the price appreciation (target price vs. current price) and forward net dividend yield. Price targets are set with a 12-month investment horizon.
Sector and Country Ratings Explained
- Overweight: Indicates a market cap-weighted positive recommendation for the sector or country relative to the benchmark.
- Neutral: Indicates a neutral recommendation relative to the benchmark.
- Underweight: Indicates a negative recommendation relative to the benchmark.
| Rating |
Distribution (%) |
Investment Banking Clients (%) |
| Add |
70.6% |
1.1% |
| Hold |
20.5% |
0.5% |
| Reduce |
8.9% |
0.5% |
(Data for the quarter ended June 30, 2025, covering 561 companies under coverage.)
Conclusion: Key Takeaways for Investors
- China Tourism Group Duty Free Corp Ltd is exhibiting compelling technical buy signals, underpinned by bullish indicators and robust volume expansion. Multiple target prices up to HK\$113.00 offer attractive upside for technical traders and investors.
- Trip.com is set to benefit from a robust summer travel season in China. Despite aggressive competition and overseas expansion weighing on near-term profitability, revenue growth remains strong, and the company’s market share in high-end hotels is expected to remain resilient. The recommendation remains Add, with a target price of HK\$588.0.
- Investors should closely monitor market guidance during the earnings season, as it will have outsized influence on forward earnings estimates and market sentiment.
- Trade policy and tariff developments remain key macro risks to watch in the coming weeks.
Report prepared by analyst CHUA Wei Ren, CMT, CGS International, July 22, 2025.
