Investment Rating - The report suggests a focus on the Hainan sector and sub-sectors with performance elasticity during the Spring Festival, indicating a positive medium-term outlook for new consumption growth, transformation recovery, overseas expansion, and policy benefits [3] Core Insights - Following the new gold tax policy, there has been a price increase in gold jewelry at retail terminals, highlighting the importance of brand strength and product quality [1][2] - The new tax policy differentiates between investment and non-investment uses of standard gold, affecting tax deductions and pricing strategies for retailers [2] - Major brands have raised their gold prices post-policy implementation, with increases ranging from 58 to 70 CNY per gram for leading brands [2] Summary by Sections 1. Market Review - The retail index increased by 0.31% this week, underperforming the Shanghai Composite Index by 0.77 percentage points [9] - The retail sector's performance ranked 17th among all sectors during this period [9] 2. Company Dynamics - Small Commodity City has acquired land for a cultural and commercial complex for 3.2 billion CNY [16] - West China Tourism plans to issue up to 30.61 million shares to raise no more than 300 million CNY for working capital and debt repayment [16] 3. Industry Dynamics - Xiaohongshu has obtained a payment license, indicating a significant development in the digital payment landscape [22] - Starbucks has partnered with Boyu Capital to expand its retail operations in China, aiming to increase the number of stores to 20,000 [22] - JD's global sales during the Double 11 event saw a transaction volume increase of over 300% in cross-border shipping areas [23]

Core Viewpoint - The sales situation of Hainan's offshore duty-free market is showing marginal improvement, with recent duty-free policies continuously optimizing, indicating a potential industry turning point. China Duty Free Group (CDFG), as the industry leader, is expected to be the first to benefit from the fundamental recovery and valuation catalysts [1]. Group 1: Sales Performance - In Q3 2025, Hainan's offshore duty-free sales totaled 5.403 billion yuan, a year-on-year decline of 2.6%, which is an improvement compared to Q1 and Q2's declines of 11% and 4% respectively [2]. - The number of duty-free shoppers reached 946,000, down 14.4% year-on-year, while the average spending per shopper increased by 13.3% to 5,712 yuan [2]. - In September 2025, Hainan's offshore duty-free sales experienced a year-on-year growth of 3.4%, marking the first positive growth in 18 months, with sales during the National Day and Mid-Autumn Festival holiday reaching 944 million yuan, up 14% year-on-year [2]. Group 2: Policy Support - On October 17, 2025, the Ministry of Finance, General Administration of Customs, and State Taxation Administration jointly announced adjustments to the offshore duty-free shopping policy, effective November 1, which includes expanding the range of duty-free goods from 45 to 47 categories, introducing tax refunds for domestic goods, and allowing departing travelers to enjoy the duty-free shopping limit [3]. - On October 30, 2025, a notification was issued to enhance duty-free policies to boost consumption, optimizing tax refund policies for domestic goods and easing approval processes for duty-free shops at ports [3]. Group 3: Market Positioning - The domestic city duty-free policy is continuously improving, with the introduction of new management measures and enhanced shopping processes to promote consumer spending [4]. - CDFG and its subsidiary, China Outbound Tourism Service, are leading in the domestic city duty-free layout, with new stores opening in Shenzhen, Guangzhou, and Chengdu in Q3 2025, positioning them to benefit from ongoing policy optimizations [4]. Group 4: Financial Forecast - Revenue projections for CDFG from 2025 to 2027 are estimated at 54.9 billion, 61.5 billion, and 66.8 billion yuan, with year-on-year changes of -3%, +12%, and +9% respectively. Net profit attributable to shareholders is forecasted at 4.1 billion, 4.9 billion, and 5.8 billion yuan, with year-on-year changes of -5%, +21%, and +17% respectively [4]. - The current stock price corresponds to a price-to-earnings ratio of 40, 33, and 28 times for the years 2025, 2026, and 2027 [4].

Group 1 - The core transaction on November 7 involved China Tourism Group Duty Free Corporation, with a volume of 300,000 shares and a transaction value of 23.697 million yuan, at a price of 78.99 yuan per share [2] - The closing price for China Tourism Group Duty Free on the same day was 78.99 yuan, reflecting an increase of 4.84%, with a turnover rate of 3.92% and a total trading volume of 6.029 billion yuan [2] - The net inflow of main funds for the day was 328 million yuan, while the stock had a cumulative increase of 3.84% over the past five days, with a total net outflow of 88.0962 million yuan [2] Group 2 - The latest margin financing balance for the stock is 5.121 billion yuan, which has increased by 216 million yuan over the past five days, representing a growth of 4.41% [3] - In terms of institutional ratings, five institutions provided ratings for the stock in the past five days, with Huachuang Securities setting the highest target price at 84.54 yuan as of November 5 [3] - China Tourism Group Duty Free Corporation was established on March 28, 2008, with a registered capital of 20.68859044 billion yuan [3]

Core Insights - China Duty Free Group (中国中免) shares rose by 4.84% to close at 78.99 yuan, with a significant block trade of 300,000 shares amounting to 23.697 million yuan [1] - The block trade occurred at a price of 78.99 yuan per share, with a premium rate of 0.00%, indicating no price increase over the previous trading price [1] - Over the past three months, the stock has seen a total of one block trade with a cumulative transaction value of 23.697 million yuan, and in the last five trading days, the stock has increased by 3.84% with a net inflow of 24.1402 million yuan from major funds [1]

Core Points - The State-Owned Enterprise Reform Index (399974) closed at 1916.43 points, down 0.1% with a trading volume of 135.68 billion yuan and a turnover rate of 0.7% [1] - Among the index constituents, 43 stocks rose while 56 fell, with Wanhua Chemical leading the gainers at a 5.79% increase and Shenzhen South Circuit leading the decliners at a 3.36% decrease [1] Index Constituents Summary - The top ten constituents of the State-Owned Enterprise Reform Index include: - Zijin Mining: 3.60% weight, latest price 30.17 yuan, market cap 801.84 billion yuan, sector: Non-ferrous metals [1] - Changjiang Electric Power: 2.90% weight, latest price 28.52 yuan, market cap 697.83 billion yuan, sector: Utilities [1] - CITIC Securities: 2.90% weight, latest price 29.00 yuan, market cap 429.80 billion yuan, sector: Non-banking financial [1] - Taihai Chemical: 2.89% weight, latest price 19.70 yuan, market cap 347.29 billion yuan, sector: Non-banking financial [1] - China Merchants Bank: 2.80% weight, latest price 42.51 yuan, market cap 1072.10 billion yuan, sector: Banking [1] - Xingye Bank: 2.74% weight, latest price 21.17 yuan, market cap 448.02 billion yuan, sector: Banking [1] - North Huachuang: 2.73% weight, latest price 413.75 yuan, market cap 299.71 billion yuan, sector: Electronics [1] - Wrigley: 2.68% weight, latest price 116.75 yuan, market cap 453.18 billion yuan, sector: Food and Beverage [1] - China Shipbuilding: 2.52% weight, latest price 35.81 yuan, market cap 269.49 billion yuan, sector: Defense and Military [1] - Zhongke: 2.42% weight, latest price 111.16 yuan, market cap 162.64 billion yuan, sector: Computer [1] Capital Flow Analysis - The net outflow of main funds from the index constituents totaled 4.52 billion yuan, while retail investors saw a net inflow of 2.98 billion yuan [1] - Notable net inflows from retail investors were observed in Wanhua Chemical, TCL Zhonghuan, and China Satellite, while significant outflows were noted in China Chemical and China Unicom [2]

Group 1 - On November 7, China National Pharmaceutical Group (中国中免) executed a block trade of 300,000 shares, with a transaction value of 23.697 million yuan, accounting for 0.39% of the total trading volume for the day [1][2] - The transaction price was 78.99 yuan, which remained unchanged compared to the market closing price of 78.99 yuan [1][2]

Investment Rating - The report maintains an "Overweight" investment rating for the consumer services industry, expecting the industry index to outperform the market index by more than 10% in the next six months [31]. Core Insights - The consumer services industry index rose by 2.17% from October 24, 2025, to November 6, 2025, outperforming the CSI 300 index by approximately 0.28 percentage points during the same period [8][31]. - The report highlights the positive impact of the 2026 holiday arrangements, particularly the nine-day Spring Festival holiday, which is expected to stimulate domestic travel demand [31]. - Recent government policies, including the "14th Five-Year Plan" recommendations and improvements to duty-free shop policies, are anticipated to further support the recovery of inbound and domestic tourism [31][21][25]. Summary by Sections Market Review - The consumer services index continued its upward trend, outperforming the CSI 300 index [8]. - All sub-sectors within the consumer services industry experienced gains, with tourism and leisure leading at 3.44% [9]. - A total of 33 listed companies in the industry reported positive returns, with the top five performers being Fangzhitech, *ST Zhanggu, Caesar Travel, China Duty Free, and Chuangye Heima [12]. Industry News - The "14th Five-Year Plan" emphasizes expanding inbound consumption and implementing paid staggered vacations [23]. - The 2026 holiday schedule includes a nine-day Spring Festival break, leading to a threefold increase in flight searches on travel platforms [21]. - The Ministry of Finance announced improvements to duty-free shop policies effective November 1, 2025, aimed at boosting consumption [25]. Company Announcements - China Duty Free reported a revenue of 39.862 billion yuan for the first three quarters of 2025, a year-on-year decline of 7.34% [28]. - Long White Mountain announced a stock issuance to optimize its capital structure, raising approximately 236 million yuan [26]. - ST Zhangjiajie was accepted for reorganization by the court, leading to a temporary suspension of its stock [27]. Weekly Perspective - The report suggests focusing on companies such as Jinjiang Hotels, Changbai Mountain, Emei Mountain A, Xiangyuan Cultural Tourism, and China Duty Free, which are expected to benefit from the recovery in leisure travel demand and supportive policies [31][32].

Group 1 - The tourism retail sector increased by 4.84% on November 7, with China Duty Free Group leading the gains [1] - The Shanghai Composite Index closed at 3997.56, down 0.25%, while the Shenzhen Component Index closed at 13404.06, down 0.36% [1] - China Duty Free Group's closing price was 66.82, reflecting a 4.84% increase [1] Group 2 - The tourism retail sector saw a net inflow of 435 million yuan from main funds, while retail investors experienced a net outflow of 354 million yuan [1] - The main fund's net inflow for China Duty Free Group was 435 million yuan, accounting for 7.21% of the total [1] - Retail funds had a net outflow of 35.4 million yuan, representing a 5.86% decrease [1]

Core Viewpoint - China Duty Free Group (中国中免) shares rose by 5.46% to HKD 71.50, with a trading volume of HKD 490 million, reflecting positive market sentiment ahead of the Hainan Free Trade Port's full closure operation starting December 18, 2023 [1] Group 1: Market Context - The Hainan Free Trade Port is set to officially launch its full closure operation, which is expected to open a new chapter in external openness for Hainan [1] - The offshore duty-free policy remains a core pillar of Hainan's consumer market, allowing residents to purchase and immediately pick up international goods [1] Group 2: Company Strategy - CITIC Securities indicates that China Duty Free Group is actively planning for its development in 2026 to capitalize on the anticipated opportunities from Hainan's closure [1] - Despite weak consumer sentiment, the expected active capital market may support luxury goods sales [1]

Core Viewpoint - China Duty Free Group (601888) has seen a stock price increase of over 4%, currently trading at 70.05 HKD with a transaction volume of 263 million HKD, driven by the upcoming full closure operation of Hainan Free Trade Port on December 18 this year [1] Group 1: Market Dynamics - The full closure of Hainan is expected to usher in a new chapter of openness, with the offshore duty-free policy remaining a core pillar of Hainan's consumer market [1] - The inclusion of international travelers in the duty-free shopping policy is anticipated to boost the recovery and development of the offshore duty-free sector [1] Group 2: Company Performance - According to Shenwan Hongyuan's research report, China Duty Free Group's profits were under pressure in the first three quarters, but there are signs of stabilization with monthly sales in core Hainan business showing year-on-year growth and an increase in market share [1] - The revenue began to rebound in the third quarter, supported by the ongoing recovery of airport channels and the opening of new large-scale city duty-free stores, which are expected to provide new growth momentum for the company [1] Group 3: Long-term Outlook - The long-term value of the company is viewed positively due to the expected increase in business traffic following the closure of Hainan Free Trade Port, as well as the company's multi-channel strategy encompassing "Hainan + airport + online + city" [1]