- We maintain our BUY rating for AST despite cutting our target price (TP) by 11%.

- We cut our TP due to cuts of 21%/20%/22% in our 2023F/2024F/2025F NPAT-MI, respectively, on lower projected sales per store and higher forecasted SG&A expenses following worse-than-expected 9M 2023 results. The impact of this change is partly offset by rolling our TP horizon from mid-2024 to end-2024.

- The Civil Aviation Authority of China’s 2023-2024 winter-spring flight schedule indicates that international flights could reach 71% of 2019’s levels. We expect the Lunar New Year to be the next catalyst for further recovery of Chinese tourist arrivals in Q1 2024.

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