Core Insights - The number of tax refund shops in Sichuan Province has reached 454, with over 100 shops offering "buy and refund" services [1] - The new tax refund policy has led to a significant increase in consumption from foreign tourists, with Chengdu SKP reporting a 224% year-on-year increase in tax refund transactions [1] - The threshold for tax refunds has been lowered from 500 RMB to 200 RMB, making it easier for foreign tourists to apply for refunds [1][2] Group 1 - As of June, Sichuan Province has 454 tax refund shops, with over 100 offering "buy and refund" services [1] - Chengdu SKP has processed 1,190 tax refund transactions in the first half of the year, a 224% increase compared to the previous year [1] - The "buy and refund" service allows foreign tourists to receive their tax refunds immediately after shopping, enhancing convenience and satisfaction [1] Group 2 - To become a tax refund shop, businesses must submit a registration form to the tax authority, which will complete the registration within five working days [2] - The tax authority plans to promote tax refund services to international brands and local products, aiming to expand the number of refund shops [2] - The tax authority will enhance the "buy and refund" service model and increase its coverage, especially in preparation for the Chengdu World University Games [2]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 67.24 CNY [2][5] Core Insights - The company is expected to see a sales recovery in Q2 2025, supported by the implementation of departure tax refunds and the opening of new city stores [1][8] - The earnings per share (EPS) forecasts for 2025, 2026, and 2027 are adjusted to 2.24 CNY, 2.60 CNY, and 3.10 CNY respectively, reflecting a downward revision due to slower recovery in duty-free sales and lower-than-expected customer traffic [2] - The company is expanding its channels with new stores opening in Tianjin and enhancing customer engagement through innovative retail experiences [8] Financial Summary - Revenue projections for 2025, 2026, and 2027 are 61,865 million CNY, 67,993 million CNY, and 74,120 million CNY respectively, with growth rates of 9.5%, 9.9%, and 9.0% [4] - The company's gross margin is expected to improve slightly from 32.0% in 2024 to 32.8% in 2027, while net profit margin is projected to increase from 7.6% in 2024 to 8.7% in 2027 [4] - The return on equity (ROE) is forecasted to rise from 7.8% in 2024 to 10.3% in 2027, indicating improved profitability [4]

Core Viewpoint - Shanghai aims to enhance its status as a leading international consumption center by optimizing the outbound tax refund environment, with a target of over 3,000 tax refund stores and more than 10,000 outlets by 2027, focusing on a seamless "buy, verify, refund" experience for travelers [1][2]. Group 1: Expansion of Tax Refund Network - Shanghai will increase the number of tax refund stores in major commercial areas, tourist attractions, and airports, ensuring comprehensive coverage in areas with high foreign visitor traffic [5]. - By 2027, the outbound tax refund consumption scale is expected to quadruple compared to 2024, with domestic brand tax refund sales accounting for over 30% [2][8]. - The city has already processed tax refunds for over 63,000 travelers from 167 countries this year, with a significant increase in "buy and refund" sales [2][6]. Group 2: Technological Innovations - The introduction of self-service tax refund machines allows travelers to quickly generate tax refund applications by scanning their passport and invoices [2]. - Shanghai has launched an upgraded "buy and refund + convenient payment" model, enabling instant tax refunds through Alipay for inbound tourists [2][9]. - The city plans to install smart tax refund terminals at major airports and high-volume refund stores to facilitate self-service tax refund processes [8][9]. Group 3: Product Diversification and Quality Improvement - The tax refund program will focus on promoting Shanghai's unique products, including local crafts and cultural items, to enhance the shopping experience for international visitors [8]. - There will be an emphasis on increasing the supply of high-quality domestic brands, including traditional brands and innovative products, to attract more foreign consumers [8][7]. - The initiative aims to create flagship stores for domestic brands and establish tax refund shopping landmarks in the city [8][7]. Group 4: Simplification of Processes - The tax refund store registration process will be streamlined, allowing new businesses to quickly become part of the tax refund network [7]. - The city will provide financial support for tax refund stores to acquire necessary equipment, with subsidies covering up to 50% of costs [5]. - The minimum purchase amount for tax refunds has been lowered to 200 yuan, and the cash refund limit has been increased to 20,000 yuan for eligible travelers [9].

Core Insights - The five major international consumption center cities in China, namely Shanghai, Beijing, Guangzhou, Tianjin, and Chongqing, are enhancing their consumption vitality through various measures aimed at boosting domestic demand and economic growth [1][4]. Group 1: Consumption Growth Strategies - The number of departure tax refund stores accounts for about 60% of the national total, and the import of consumer goods represents over half of the national share, indicating a strong consumption resource concentration in these cities [1]. - Beijing has implemented a new departure tax refund policy that allows for a seamless refund process, enhancing the shopping experience for foreign tourists and encouraging them to spend more [2][1]. - The influx of inbound tourists has significantly increased, with over 10 million outbound travelers and 2.46 million inbound tourists recorded in the first half of the year, marking a year-on-year growth of 48.8% [1]. Group 2: Regional Collaboration and Ecosystem Development - The five cities are actively increasing the supply of quality consumer goods and are working to create a consumption ecosystem that extends to surrounding areas, thereby enhancing their market influence [5]. - Initiatives such as the "Shanghai International Cruise Festival" have led to the establishment of a "Cruise + Consumption City Alliance," promoting collaborative consumption experiences across multiple cities [5]. Group 3: Innovative Consumption Scenarios - Innovative consumption scenarios, such as the regular drone light shows in Chongqing, have significantly boosted local hospitality and dining sectors, with average occupancy rates exceeding 80% in key hotels [6]. - The Ministry of Commerce has introduced measures to support the development of international consumption center cities, including promoting sports events and cultural activities to enhance consumer engagement [6][7].

Core Insights - The continuous upgrade of China's departure tax refund policy has significantly boosted foreign tourists' enthusiasm for shopping in China, with Shanghai's departure tax refund sales increasing by approximately 85% year-on-year in the first half of the year [1] - The introduction of innovative service models and the expansion of the departure tax refund policy are expected to drive the rapid development of "China Shopping" and enhance the global competitiveness of high-quality Chinese products [1][3] Departure Tax Refund Service Optimization - The departure tax refund service has been enhanced through the introduction of self-service machines and "city-wide refund" services, greatly improving convenience and efficiency for foreign tourists [2] - As of now, both Beijing and Shanghai have over 1,400 tax refund stores, with Shenzhen also experiencing rapid growth, surpassing 1,000 stores [2] Expansion of Policy Implementation - The departure tax refund policy is being extended to more regions, with Hubei Province implementing it on July 1, 2023, and 57 tax refund stores included in the initial rollout [3] - The policy is expected to continue to stimulate market vitality and enhance inbound consumption [3] Product Competitiveness Enhancement - The implementation of the departure tax refund policy not only benefits foreign tourists but also promotes Chinese products and culture globally, with local brands making up 40% of the tax refund stores in Beijing [3] - Traditional Chinese brands and high-tech products, such as DJI drones and Xiaomi smartphones, are increasingly popular among foreign consumers, reflecting the growing competitiveness of Chinese brands in the global market [4]

Group 1 - The Shanghai Municipal Commission of Commerce and six other departments have jointly developed the "Shanghai Action Plan for Optimizing the Departure Tax Refund Consumption Environment (2025-2027)" to establish Shanghai as a benchmark city for departure tax refunds with a well-structured network of outlets, diverse product offerings, and excellent customer service [1] - By 2027, the plan aims to have over 3,000 departure tax refund stores and more than 10,000 outlets, with over 80% of stores offering "buy and refund" services and over 80% of commercial hubs having centralized refund service points [1] - The departure tax refund consumption scale is expected to quadruple compared to 2024, with the share of domestic brand tax refund sales increasing to over 30% [1] Group 2 - The plan includes increasing the supply of high-quality domestic brand products, such as time-honored brands, smart products, intangible cultural heritage products, and sports goods [2] - The convenience of departure tax refunds will be enhanced by installing smart terminals, expanding refund channels, and introducing verification convenience measures [2] - The action plan specifies that foreign travelers can apply for departure tax refunds if they purchase tax refund items worth 200 yuan in the same store on the same day, with the cash refund limit for "buy and refund" raised to 20,000 yuan [2]

Core Insights - A new trend of "China Shopping" is emerging as foreign tourists flock to China to take advantage of favorable shopping conditions and tax refund policies [1][2][3] - The upgraded tax refund policy, which lowers the minimum refund threshold and increases the cash refund limit, significantly enhances the shopping experience for foreign visitors [1][4][7] Tax Refund Policy Enhancements - The tax refund policy has been expanded from 10 pilot cities to nationwide implementation, with the minimum refund threshold reduced from 500 RMB to 200 RMB and the cash refund limit increased from 10,000 RMB to 20,000 RMB [1][4][7] - The "immediate refund" service allows tourists to receive tax refunds at the point of purchase, streamlining the process and enhancing customer satisfaction [4][5][11] Impact on Consumer Behavior - The immediate refund service has led to a 22-fold increase in tax refund processing in pilot areas, significantly boosting sales in tax refund stores [4][6] - The tax refund rate for general goods is approximately 11%, effectively providing foreign tourists with a 9% discount on their purchases [2][4] Market Growth Potential - In 2024, the total expenditure of inbound travelers is projected to reach 94.2 billion USD, reflecting a 77.8% increase, indicating substantial growth potential in inbound consumption [2][14] - The share of inbound traveler consumption in China's GDP is about 0.5%, suggesting significant room for growth compared to other major countries where this figure ranges from 1% to 3% [2] Retail Environment and Consumer Experience - The establishment of centralized tax refund points in major cities allows tourists to process refunds from multiple stores in one location, enhancing convenience [11][12] - The number of tax refund stores has increased significantly, with over 5,196 stores now available, providing a wider range of products for tourists [7][9] International Appeal and Policy Synergy - The combination of tax refunds, visa-free entry, and mobile payment options has made "China Travel" and "China Shopping" increasingly popular among international tourists [15][16] - Recent policy changes, such as extending visa-free transit periods and expanding the number of eligible ports, further enhance the attractiveness of China as a shopping destination [15][17]

Group 1 - The launch of the "immediate refund" tax refund point at Haiya City marks the further integration of Shenzhen's core business district tax refund service network [1][3] - From January to May this year, the sales of tax refund goods in Shenzhen increased by 2.1 times year-on-year, with "immediate refund" goods sales growing over 20 times [3] - The "immediate refund" policy is expected to enhance the international influence of the business district, attracting more international tourists and visitors from Hong Kong and Macau [3] Group 2 - Haiya City has established a comprehensive tax refund service system, opening 27 "immediate refund" stores covering various product categories, including international brands and local tech products [3] - The new tax refund process allows overseas travelers to receive refunds immediately after shopping, significantly reducing waiting times compared to traditional tax refund methods [3] - Haiya City aims to continuously optimize the tax refund process, enrich product offerings, and enhance service standards to create a friendly, convenient, and efficient shopping environment [3]

Industry Overview Upstream - Energy: International oil prices rebounded year-on-year yesterday and have been in a volatile trend recently [2] - Agriculture: Egg prices continued to decline [2] Midstream - Chemical: The operating rates of PTA, PX, and polyester decreased [3] Downstream - Real Estate: The sales of commercial housing in first- and second-tier cities declined seasonally [4] - Service: The number of domestic flights increased during the summer vacation [4] Market Pricing - Agricultural credit spreads have rebounded slightly recently [5] Industry Credit Spreads | Industry | Last Year | One Quarter Ago | One Month Ago | Last Week | This Week | Percentile | | --- | --- | --- | --- | --- | --- | --- | | Agriculture, Forestry, Animal Husbandry, and Fishery | 102.36 | 80.56 | 60.94 | 57.09 | 25.81 | 0.00 | | Mining | 38.94 | 46.31 | 39.57 | 37.35 | 34.86 | 4.90 | | Chemical | 74.08 | 66.20 | 51.92 | 49.18 | 46.66 | 0.00 | | Steel | 46.13 | 55.63 | 46.92 | 47.48 | 45.28 | 8.10 | | Non-ferrous Metals | 45.99 | 55.48 | 52.12 | 49.42 | 47.24 | 7.80 | | Electronics | 65.47 | 73.03 | 65.42 | 54.62 | 52.29 | 1.90 | | Automotive | 62.40 | 48.88 | 41.44 | 39.92 | 37.08 | 0.00 | | Household Appliances | 44.95 | 48.00 | 46.60 | 47.10 | 45.67 | 11.10 | | Food and Beverage | 44.62 | 45.57 | 36.28 | 37.12 | 35.05 | 1.40 | | Textile and Apparel | 53.88 | 52.14 | 52.04 | 52.65 | 50.47 | 5.70 | | Light Industry Manufacturing | 51.66 | 200.14 | 149.91 | 146.32 | 140.66 | 7.10 | | Pharmaceutical Biology | - | 70.86 | 62.08 | 53.47 | 50.74 | 1.20 | | Necessities | 29.89 | 33.12 | 27.14 | 27.41 | 25.37 | 5.10 | | Transportation | 31.83 | 36.27 | 30.91 | 30.25 | 28.24 | 3.80 | | Real Estate | 232.48 | 146.23 | 101.32 | 100.80 | 95.16 | 0.50 | | Commercial Trade | 47.29 | 50.47 | 42.95 | 42.17 | 39.54 | 2.10 | | Leisure Services | 80.77 | 110.81 | 120.10 | 118.95 | 117.51 | 93.90 | | Banking | 31.25 | 27.05 | 18.83 | 18.64 | 15.98 | 1.30 | | Non-bank Finance | 30.86 | 34.30 | 29.98 | 30.08 | 27.97 | 5.00 | | Comprehensive | 72.39 | 48.02 | 42.55 | 41.37 | 39.32 | 0.40 | | Building Materials | 40.15 | 45.82 | 38.38 | 37.31 | 34.14 | 3.80 | | Building Decoration | 44.57 | 53.79 | 60.04 | 51.32 | 49.56 | 11.10 | | Electrical Equipment | 57.19 | 85.69 | 80.21 | 72.51 | 73.08 | 33.70 | | Machinery and Equipment | 34.79 | 43.22 | 43.32 | 44.40 | 43.66 | 24.20 | | Computer | 68.04 | 65.47 | 49.65 | 46.60 | 43.96 | 0.00 | | Media | 249.31 | 46.75 | 39.22 | 37.92 | 35.66 | 0.00 | | Communication | 35.73 | 32.75 | 24.50 | 29.10 | 29.42 | 8.50 | [47] Key Industry Price Indicators | Industry Name | Indicator Name | Frequency | Unit | Update Time | Value | YoY | 5-Day Trend | | --- | --- | --- | --- | --- | --- | --- | --- | | Agriculture | Spot Price: Corn | Daily | Yuan/ton | 7/3 | 2367.1 | 0.61% | - | | | Spot Price: Eggs | Daily | Yuan/kg | 7/3 | 5.6 | -3.46% | - | | | Spot Price: Palm Oil | Daily | Yuan/ton | 7/3 | 8744.0 | 2.15% | - | | | Spot Price: Cotton | Daily | Yuan/ton | 7/3 | 15199.8 | 1.30% | - | | | Average Wholesale Price: Pork | Daily | Yuan/kg | 7/3 | 20.3 | -0.10% | - | | | Spot Price: Copper | Daily | Yuan/ton | 7/3 | 81021.7 | 2.71% | - | | | Spot Price: Zinc | Daily | Yuan/ton | 7/3 | 22400.0 | 0.70% | - | | Non-ferrous Metals | Spot Price: Aluminum | Daily | Yuan/ton | 7/3 | 20870.0 | 1.21% | - | | | Spot Price: Nickel | Daily | Yuan/ton | 7/3 | 122933.3 | 0.41% | - | | | Spot Price: Aluminum | Daily | Yuan/ton | 7/3 | 17100.0 | 0.16% | - | | Black Metals | Spot Price: Rebar | Daily | Yuan/ton | 7/3 | 3104.0 | 1.43% | - | | | Spot Price: Iron Ore | Daily | Yuan/ton | 7/3 | 720.2 | 0.62% | - | | | Spot Price: Wire Rod | Daily | Yuan/ton | 7/3 | 3292.5 | 1.54% | - | | | Spot Price: Glass | Daily | Yuan/square meter | 7/3 | 14.0 | 0.94% | - | | Non-metals | Spot Price: Natural Rubber | Daily | Yuan/ton | 7/3 | 13858.3 | -0.14% | - | | | China Plastic City Price Index | Daily | - | 7/3 | 825.5 | -0.44% | - | | Energy | Spot Price: WTI Crude Oil | Daily | US dollars/barrel | 7/3 | 67.5 | 3.90% | - | | | Spot Price: Brent Crude Oil | Daily | US dollars/barrel | 7/3 | 69.1 | 2.11% | - | | | Spot Price: Liquefied Natural Gas | Daily | Yuan/ton | 7/3 | 4062.0 | 1.75% | - | | | Coal Price: Coal | Daily | Yuan/ton | 7/3 | 727.0 | 0.14% | - | | Chemical | Spot Price: PTA | Daily | Yuan/ton | 7/3 | 5031.3 | -1.02% | - | | | Spot Price: Polyethylene | Daily | Yuan/ton | 7/3 | 7466.7 | -0.60% | - | | | Spot Price: Urea | Daily | Yuan/ton | 7/3 | 1829.0 | 0.35% | - | | | Spot Price: Soda Ash | Daily | Yuan/ton | 7/3 | 1252.5 | -6.36% | - | | Real Estate | Cement Price Index: National | Daily | - | 7/3 | 136.7 | -0.80% | - | | | Building Materials Composite Index | Daily | Points | 7/3 | 111.8 | 1.31% | - | | | Concrete Price Index: National Index | Daily | Points | 113 | 96.4 | -0.87% | - | [48] Policy Focus Production Industry - The Ministry of Industry and Information Technology focuses on promoting the high-quality development of the photovoltaic industry and aims to address low-price and disorderly competition [1] Service Industry - Shanghai plans to optimize the duty-free shopping environment for outbound tourists, aiming to increase the number of duty-free shops and consumption scale by 2027 [1]

Group 1: Cultural Industry and International Expansion - The Zhejiang Provincial Secretary Wang Hao emphasized the importance of promoting cultural exports, particularly in online literature, web series, and online games, referred to as the "new three samples" [1] - The market size for online literature exports is projected to exceed 5 billion RMB in 2024, with overseas users reaching over 350 million [1] - The actual sales revenue of independently developed Chinese games in overseas markets is expected to reach 18.557 billion USD in 2024, marking a year-on-year growth of 13.39% [1] Group 2: Policy Support and Initiatives - The Zhejiang provincial government has outlined measures to support the internationalization of the gaming industry, aiming to cultivate high-quality 3A game projects and create an industry cluster for game exports [2] - The Chinese government has called for the orderly opening of the internet and cultural sectors, aiming to enhance international cultural exchanges and cooperation [2] - The Ministry of Commerce has proposed developing a comprehensive industry chain for game exports, from IP creation to overseas operations [3] Group 3: Economic Growth and Cultural Output - The gaming industry is recognized as a new engine for cultural output and economic growth, with various provinces, including Guangdong, implementing policies to enhance the competitiveness of their gaming industries [3] - The cultural "new three samples" are expected to accelerate their international expansion due to collaborative efforts from multiple stakeholders [3]