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Guangzhou Airport’s Rally Expected to Fizzle

  • Shares have rebounded after their worst annual loss since 2008
  • Profit set to decline on cut to airport construction refund
People walk through the departure hall at Terminal 2 of the Guangzhou Baiyun International Airport in Guangzhou, China.

People walk through the departure hall at Terminal 2 of the Guangzhou Baiyun International Airport in Guangzhou, China.

Photographer: Qilai Shen/Bloomberg
Updated on

Optimism over a travel boom in southern China has fueled a surge in shares of China’s third-biggest airport. But some analysts say the rally in Shanghai-listed Guangzhou Baiyun International Airport Co. will probably run out of steam soon.

Baiyun Airport has gained 25 percent this year, outperforming a 20 increase in the broader A-share market. It was mainly fueled by bets that last year’s 32 percent plunge was too steep. They also advanced on optimism a travel boom and China’s plans to develop the Greater Bay area, where the airport is located, will drive traffic.