KAIYUAN SECURITIES·2026-01-29 02:35Investment Rating - The investment rating for the tourism and scenic industry is "Positive" (maintained) [1] Core Insights - The Hainan Free Trade Port is positioned as a strategic hub for dual circulation, focusing on connecting domestic consumption and supply chains, offshore trade with ASEAN and RCEP, and high-end industrial clusters based on unique resources [6][25] - The report highlights the significant policy advantages of Hainan's Free Trade Port, including a "zero tariff, low tax rate" system and various facilitation measures aimed at attracting high-quality industries and talent [7][43] - The report anticipates a recovery in the duty-free shopping market in Hainan, driven by policy reforms and an increase in consumer confidence, particularly among high-net-worth individuals [8][30] Summary by Sections 1. Free Trade Port: Building an Open High Ground - The Hainan Free Trade Port officially commenced full island closure operations on December 18, 2025, marking a significant milestone in its development [17] - The regulatory framework is characterized by "one line open, two lines controlled, and free movement within the island," with a focus on zero tariffs and low tax rates [17][19] - Hainan aims to serve as a supply chain front for the domestic market, particularly connecting with the Greater Bay Area and the new western land-sea corridor [25][28] 2. Duty-Free Shopping: Entering a New Cycle - The duty-free market in Hainan experienced a historical peak in sales in 2021, followed by a period of adjustment from 2022 to 2024, with signs of recovery expected in 2025 [8][19] - New policies in November 2024 expanded the categories and sources of duty-free shopping, which are anticipated to unlock consumer potential [8][19] - The report identifies key beneficiaries in the duty-free sector, including China Duty Free Group and Wangfujing [8] 3. Investment Recommendations - The report suggests focusing on companies that are well-positioned to benefit from the evolving landscape of Hainan's Free Trade Port and the recovery of the duty-free market [8][30]