Investment Rating - The investment rating for China Tourism Group Duty Free is Equal-weight [8] Core Insights - Hainan's offline duty-free sales showed a year-over-year decline of 5% in March 2025, which is an improvement from a 13% decline in the first two months of 2025. The average daily sales were RMB 94 million [4][11] - The daily shopper count decreased by 26% year-over-year to 17,700, while spending per shopper increased by 28% to RMB 6,500. The growth in average spending per shopper may be attributed to a rise in electronic product sales, although this may not significantly impact margins [4][11] - The macroeconomic outlook remains uncertain, particularly with potential tariff escalations expected to impact the second half of 2025. The performance of Hainan's duty-free market is closely tied to middle-class spending [2][11] - The Hainan government is anticipated to release details regarding the free-trade-zone policy later this year, which could affect duty-free operators [3] Summary by Sections Sales Trends - In March 2025, Hainan's offline duty-free sales were RMB 94 million per day, reflecting a 5% year-over-year decline, which is an improvement from the 13% decline observed in the first two months of 2025. Daily sales were 35% lower than in the first two months of 2025 and 25% lower than the pre-COVID seasonality of March 2015-2019 [4][11] - Assuming that the sales trends from April to December 2025 follow pre-COVID seasonality, the year-over-year decline in sales may remain in the low to mid-single digits for the second and third quarters of 2025. However, a lower year-over-year comparison base in the fourth quarter of 2025 may lead to positive sales growth for the full year [11] Economic Factors - The report highlights that the macroeconomic conditions are critical for Hainan's duty-free market, which is more sensitive to middle-class spending. The uncertainty in the macro outlook and potential tariff impacts are significant considerations for future performance [2][11] - The anticipated free-trade-zone policy from the Hainan government is expected to be released later this year, which could have implications for duty-free operators [3]

Investment Rating - The report maintains a "Buy" rating for the company [6] Core Views - The company is expected to benefit from optimized duty-free policies at ports and anticipates growth in city duty-free sales [1] - The company has experienced a significant decline in revenue and net profit in 2024, with a revenue of 56.47 billion yuan, down 16.38% year-on-year, and a net profit of 4.27 billion yuan, down 36.44% year-on-year [1][5] - The company is focusing on enhancing its online, store, and supply chain capabilities, which are expected to contribute to long-term growth [4] Summary by Sections Financial Performance - In 2024, the company reported a total revenue of 56.47 billion yuan, with duty-free and taxable goods generating 38.67 billion yuan and 17.10 billion yuan respectively, showing a year-on-year change of -12.58% and -23.49% [1] - The company’s gross margin in Q4 2024 decreased by 3.50 percentage points to 28.54%, attributed to declining sales and increased promotional efforts [2] - The total number of tourists received in Hainan in 2024 was 97.21 million, an increase of 8.0% year-on-year, while the duty-free shopping amount decreased by 29.3% to 30.94 billion yuan [1] Market Position and Strategy - The company has increased its market share in Hainan's duty-free sector by 2 percentage points in 2024, introducing over 150 new brands and enhancing the "first store economy" [3] - The company successfully secured operating rights for 10 airport and port duty-free stores, benefiting from the expansion of visa-free countries and the increase in international flights [3] - The company is actively pursuing the opening of city duty-free stores, with agreements signed in major cities like Beijing and Shanghai [3] Future Projections - The company is projected to achieve revenues of 58.03 billion yuan, 63.55 billion yuan, and 68.73 billion yuan for the years 2025, 2026, and 2027 respectively, with corresponding net profits of 4.50 billion yuan, 4.93 billion yuan, and 5.28 billion yuan [4][5] - The expected EPS for 2025, 2026, and 2027 is 2.18 yuan, 2.38 yuan, and 2.55 yuan respectively, with P/E ratios of 28.9, 26.4, and 24.7 [4][5]

Investment Rating - The investment rating for the company is "Buy" [6] Core Views - The company is expected to benefit from optimized duty-free policies at ports and anticipates growth in city duty-free sales [1][4] - The company's revenue for 2024 is reported at 56.47 billion yuan, a year-on-year decrease of 16.38%, with a net profit of 4.27 billion yuan, down 36.44% [1] - The company is focusing on enhancing its online, store, and supply chain capabilities, which are expected to contribute to long-term growth [4] Summary by Sections Financial Performance - In 2024, the company achieved a total revenue of 56.47 billion yuan, with a significant decline in net profit to 4.27 billion yuan [1] - The fourth quarter of 2024 saw a revenue of 13.45 billion yuan, down 19.46% year-on-year, and a net profit of 348 million yuan, down 76.93% [1] - The gross margin for Q4 2024 decreased by 3.50 percentage points to 28.54%, attributed to declining sales and increased promotional efforts [2] Market Dynamics - The company has seen a steady increase in its share of the duty-free market in Hainan, with a 2 percentage point increase in 2024 [3] - The company successfully won bids for duty-free operations at 10 airports, benefiting from the expansion of visa-free policies and increased international flight volumes [3] - The city duty-free stores are expected to contribute to growth, with new store openings planned in major cities [3] Future Projections - Revenue projections for 2025-2027 are estimated at 58.03 billion yuan, 63.55 billion yuan, and 68.73 billion yuan respectively, with net profits expected to reach 4.50 billion yuan, 4.93 billion yuan, and 5.28 billion yuan [4][5] - The company’s earnings per share (EPS) are projected to be 2.18 yuan, 2.38 yuan, and 2.55 yuan for the years 2025, 2026, and 2027 respectively [5]

| 排名 | 板块名称 | 主力资金净流入（亿元） | 主力资金净流入率(%) | | --- | --- | --- | --- | | | 机械设备 | 32.58 | 4.88 | | 2 | 交运设备 | 30.48 | 6.42 | | 3 | 通用设备 | 18.83 | 5.64 | | ব | 家用电器 | 4.98 | 4.71 | | 5 | 工业务属 | 3.68 | 3.16 | | 排名 | 板块名称 | 主力资金净流出（亿元） | 主力资金净流出率(%) | | --- | --- | --- | --- | | | 商贸零售 | -21.94 | -8.74 | | 2 | 未曾体 | -17.52 | -5.78 | | 3 | 非银金融 | -14.15 | -7.40 | | ব | 交通运输 | -14.10 | -6.90 | | 5 | 农林牧渔 | -13.13 | -9.80 | 主力资金监控：中油资本净卖出超8亿 智通财经4月23日电，智通财经星矿数据显示，今日早盘主力资金净流入机械设备、交运设备、通用设备等板块，净流出商贸零售、 半导体、非银金融等板块，其中机 ...

Core Viewpoint - The Free Trade Port concept has seen a significant increase of 3.05%, ranking fifth among concept sectors, with notable stocks like Dongfang Chuangye, Changjiang Investment, and Jiacheng International hitting the daily limit up [2] Group 1: Market Performance - The Free Trade Port sector had 33 stocks rising, with the top performers being Beibu Gulf Port (up 6.31%), Waigaoqiao (up 6.24%), and Zhongchuang Logistics (up 5.47%) [2] - The sector experienced a net inflow of 5.97 billion yuan from main funds, with 20 stocks receiving net inflows, and five stocks exceeding 50 million yuan in net inflow [3] - The leading stock in terms of net inflow was Huamao Logistics, which saw a net inflow of 394 million yuan [3] Group 2: Fund Flow Ratios - The top stocks by net inflow ratio included Changjiang Investment (45.19%), Wanlin Logistics (31.03%), and Dongfang Chuangye (25.95%) [4] - The Free Trade Port concept's fund inflow rankings highlighted Huamao Logistics with a daily increase of 9.96% and a turnover rate of 20.05% [5] - Other notable stocks included Wanlin Logistics (up 9.97% with a 6.32% turnover) and Dongfang Chuangye (up 10.08% with a 4.23% turnover) [5]

Group 1 - The core index, the China Securities Hong Kong-Shenzhen New Generation Consumption Theme Index, opened at 1719.01 points and has seen a decline of 16.03% over the past month, an increase of 9.98% over the past three months, and a year-to-date increase of 5.99% [1][2] - The index consists of 50 listed companies from the food and beverage, apparel, leisure, and other consumer goods and services sectors that meet the characteristics of new generation consumption, reflecting the overall performance of these companies in the mainland and Hong Kong markets [1][2] - The index's top ten holdings include Xiaomi Group-W (13.43%), Tencent Holdings (10.83%), Meituan-W (7.87%), Kuaishou-W (7.48%), Pop Mart (6.56%), Yum China (6.43%), Anta Sports (6.29%), China Duty Free Group (3.33%), GoerTek (2.64%), and Shenzhou International (2.23%) [1][2] Group 2 - The market segment distribution of the index shows that the Hong Kong Stock Exchange accounts for 71.66%, the Shenzhen Stock Exchange for 18.41%, and the Shanghai Stock Exchange for 9.93% [1][2] - In terms of industry composition, discretionary consumption accounts for 41.55%, communication services for 33.35%, information technology for 19.59%, staple consumption for 3.85%, and healthcare for 1.64% [2] - The index samples are adjusted semi-annually, with adjustments implemented on the next trading day following the second Friday of June and December each year, and special adjustments may occur under certain circumstances [2]

• 海南省政府通过举办演唱会和发放消费券等措施，刺激文旅产业发展，3 月份免税销售额降幅收窄至-5%，较一二月份的-13%有所改善，表明政府措 施对消费有积极影响。 • 今年赴岛游客数量与去年同期基本持平，但购买人次同比下降约 20%，导 致渗透率下降，不过客单价从 1 月的 6,700 元增长至 3 月的 6,500 元，表 明消费者购买力稳定，精品供给优化和消费券拉动是主要因素。 • 自贸港封关政策明确"一线放开，二线管住"，主要针对原材料和设备， 利好 ToB 企业，免税商仍享受现有税收减免，消除了市场对政策不确定性 的担忧，2026 年前不会开放岛民免税。 • 今年 1-3 月离岛免税连带率约为 6 件，与去年同期持平，但件均价显著提 高，约为 1,000 元，高于去年同期的 800-1,000 元，精品占比增加是主要 驱动因素。 • 4 月份离岛免税终端出货价较去年 7 月提升约 10%，综合政府补贴、文旅引 流和免税商折扣等因素，离岛免税销售额趋于稳定。 • 美国来源商品加关税对大集团影响较小，但依赖美国工厂的品牌如倩碧和 修丽可在天猫旗舰店出现涨价和下架现象，美产商品逐步退出中国市场趋 势明显， ...

Core Viewpoint - The performance of duty-free concept stocks, particularly China Duty Free Group (CDFG), has shown significant volatility amid the ongoing trade war, with initial gains followed by a decline as market sentiment fluctuated [1][2][6]. Group 1: Market Performance and Trends - In early April, CDFG's stock surged, with a notable increase of 7.45% on April 8, followed by a limit-up on April 9 and a further rise of 4.99% on April 10, reaching a recent high [1]. - However, following these gains, CDFG's stock price experienced a decline over several trading days, reflecting investor uncertainty regarding the impact of the trade war on duty-free operators [1][2]. - Prior to the trade war, CDFG's performance was poor, with a projected revenue of 56.474 billion yuan for 2024, a year-on-year decrease of 16.38%, and a net profit of 4.267 billion yuan, down 36.44% [2][4]. Group 2: Impact of Trade War - The trade war has led to increased tariffs, with the U.S. imposing a 34% tariff on imports from China, which initially raised concerns about the duty-free market [6][7]. - Despite these concerns, duty-free operators reported that their businesses were not affected by the tariffs, as the duty-free policy remains unchanged, allowing them to attract consumers despite the trade tensions [8][9]. - The duty-free market has been viewed as a potential beneficiary of the trade war, as the tax differential between imported goods and duty-free products may enhance sales for operators like CDFG [7][10]. Group 3: Financial Performance and Future Outlook - CDFG's revenue from Hainan reached 28.892 billion yuan in 2024, while the company also benefited from a significant increase in airport duty-free sales, with Beijing airport sales growing over 115% [10][11]. - The company has established a strong supply chain with over 430 suppliers and 1,400 brands, enhancing its bargaining power and cost advantages [10][11]. - There is potential for growth in the Hainan duty-free market, with experts suggesting that the average spending of tourists could increase significantly, indicating a larger market opportunity [12].

Core Insights - The core issue facing international beauty brands in China is the significant decline in tourism retail performance, prompting major organizational adjustments and strategic shifts within companies like L'Oréal and Shiseido [1][2][4]. Group 1: Tourism Retail Performance - L'Oréal's China travel retail division is reportedly undergoing a large-scale organizational adjustment, with potential layoffs nearing 50% due to ongoing performance pressures in domestic tourism retail channels [1]. - Shiseido's travel retail business in Hainan saw a revenue drop of over 30% in the first nine months of 2024, contributing to a 4.6% decline in net sales in China [2]. - China Duty Free Group's revenue for 2024 was reported at 56.474 billion yuan, a year-on-year decrease of 16.38%, indicating a broader trend of declining performance in the tourism retail sector [1]. Group 2: Market Challenges - The tourism retail sector has faced challenges due to the pandemic, with international beauty brands struggling to recover despite a gradual return of offline economic activities [1]. - The competitive landscape has intensified, with domestic brands gaining market share; in 2023, local cosmetics captured 50.4% of the market, surpassing international brands for the first time [8][11]. - Factors contributing to the decline include the diversion of outbound tourism, loss of price advantages, and the rise of domestic alternatives [6][11]. Group 3: Strategic Responses - In response to declining tourism retail performance, companies are restructuring and appointing new leadership; for instance, Shiseido has integrated its China and travel retail businesses under unified management [9]. - L'Oréal is focusing on creating memorable shopping experiences tailored to the needs of millennial and Gen Z travelers, indicating a shift towards consumer-centric strategies [10]. - The beauty industry is witnessing a wave of executive changes, with at least eight significant appointments related to travel retail since last year, reflecting the urgency of addressing market challenges [9].

Company Overview - China Tourism Group Duty Free Co., Ltd. (China Duty Free) was established in 2008 and is located in Beijing, primarily engaged in business services [1] - The registered capital of the company is approximately 20.69 billion RMB [1] Stock Performance - On April 17, China Duty Free's stock closed down by 2.05% [1] - The fund managed by Invesco Great Wall, Invesco Great Wall Emerging Growth Mixed A, reduced its holdings in China Duty Free in the fourth quarter of the previous year [1] - Year-to-date return for the fund is -0.29%, ranking 1882 out of 4559 in its category [1][2] Fund Management - The fund manager for Invesco Great Wall Emerging Growth Mixed A is Liu Yanchun, who has a Master's degree in Management [3] - Liu Yanchun has extensive experience in the investment field, having worked in various research and management roles since 2002 [3][4] - As of now, Liu Yanchun manages multiple funds, including Invesco Great Wall Emerging Growth Mixed Fund and Invesco Great Wall Domestic Demand Growth Mixed Fund [4] Fund Performance Metrics - The fund's performance over different time frames shows a near-term decline, with a -0.34% return over the past week and a -5.12% return over the past month [2] - The fund's year-to-date performance is -0.29%, which is slightly better than the average of its peers at -0.38% [2]