Group 1 - The establishment of city duty-free shops in key business districts aims to meet consumer needs for dining, shopping, and entertainment [1] - The opening of city duty-free shops in Guangzhou and Shenzhen marks a significant step in the development of the duty-free industry in China [4] - The new city duty-free shops are primarily operated by state-owned enterprises, enhancing the availability of domestic products for outbound travelers [4] Group 2 - The city duty-free shops offer a mix of tax-free and taxable goods, including local specialty products and cultural items, to attract outbound travelers [1][4] - The recent trend of establishing city duty-free shops is supported by the implementation of the "Interim Measures for the Management of City Duty-Free Shops" [5] - Current limitations on pickup points for duty-free goods may affect consumer experience, with only Guangzhou Baiyun Airport serving as a pickup location for the Guangzhou store [5][6] Group 3 - The increase in foreign tourists visiting Guangzhou and Shenzhen is driven by policies such as the 240-hour visa-free transit, enhancing international market engagement [5] - Consumers express a desire for more flexible pickup options, including multiple locations within the city and cross-city delivery services [6]

Group 1 - The first duty-free store in Guangzhou officially opened on August 26, marking a significant step in implementing national duty-free policies and establishing Guangzhou as an international consumption center [1][2] - The store is a collaboration between China Duty Free Group, Guangzhou Baiyun International Airport, and two listed companies under Lingnan Group, showcasing a strategic partnership in the retail sector [1] - Located in the CBD of Tianhe District, the store aims to attract high-end consumers and international tourists, contributing to the economic growth of the Greater Bay Area [1] Group 2 - The duty-free store introduces an innovative shopping model combining "duty-free + taxable," "imported + domestic," and "offline + online," creating a diverse product matrix that includes beauty, jewelry, fashion, and high-end beverages [2] - The store features a departure tax refund service to stimulate outbound tourist spending and promote the return of overseas consumption, enhancing the global presence of domestic brands [2] - The opening day saw the launch of an autonomous driving service and a trial run of a direct bus service between Guangzhou and Hong Kong Airport, indicating a focus on improving transportation links for international travelers [2]

Core Insights - The first city duty-free store in Shenzhen, covering nearly 3,000 square meters, officially commenced trial operations on August 23, 2025 [1] - The store is a collaboration between China Duty Free Group, Shenzhen Duty Free Group, and Shenye Group, aiming to enhance tourism consumption among outbound travelers and promote the return of overseas spending [1] Business Model - The store adopts an upgraded business model of "duty-free + taxable," "imported + domestic," and "offline + online" to attract consumers [1] - It aims to stimulate tourism consumption and guide overseas spending back to China, contributing to the promotion of domestic brands [1] Product Offering - The product range includes both duty-free and taxable items, with a focus on beauty and skincare, watches and jewelry, and high-end alcoholic beverages [1] - The store features a diverse product matrix highlighting national trends, technology electronics, international brands, and traditional Chinese brands [1]

Investment Rating - The report maintains an "Outperform" rating for the industry [7] Core Insights - The report emphasizes the potential of new consumption logic in cultural tourism, particularly during the summer peak season, and highlights the synergy between IP and scenic spots [2][3] - The report identifies strong performance in the trendy toy sector, driven by supportive consumption policies and a relaxed consumer mindset, with leading companies like Pop Mart and Blok achieving significant weekly stock price increases [3][22] - In the gold and jewelry sector, brands with high terminal store efficiency and significant expansion potential are recommended, particularly in the context of rising gold prices [4] - The beauty and personal care segment is experiencing structural opportunities due to generational consumption habits and product innovation, with a focus on high-growth potential companies [5][41] - The medical aesthetics industry is seeing a recovery in demand, with a focus on new product launches in Q3, indicating a shift in market dynamics [6][42] Summary by Sections 1. Duty-Free and Scenic Areas - The report tracks the duty-free industry, noting strategic shifts in companies like Zhuhai Duty-Free Group and China Duty-Free Group, which are focusing on core business and expanding overseas [12][13] - Scenic area trends indicate a recovery in outbound flight volumes, with a focus on summer tourism opportunities in regions like Xiyu and Changbai Mountain [14][19] 2. Trendy Toys - The trendy toy sector is benefiting from a strong consumer response, with significant online sales growth reported for the first five months of 2025 [22][23] - Leading companies in this sector, such as Pop Mart, are experiencing substantial sales increases, driven by popular IPs and new product launches [26] 3. Hotels - Hotel performance metrics show a decline in RevPAR and occupancy rates due to seasonal fluctuations, with a notable impact from the Dragon Boat Festival [29][30] - Supply growth remains stable, particularly in lower-tier markets, indicating a shift in demand dynamics [30] 4. Education - The report highlights a stable employment situation with a slight decrease in urban unemployment rates, suggesting a steady demand for vocational training and exam preparation services [62][63] - Companies like China Oriental Education and Xueda Education are recommended due to their potential to benefit from rising educational demands [41] 5. Medical Aesthetics and Beauty - The medical aesthetics sector is poised for growth with new product approvals and a focus on market share expansion among leading companies [42][43] - The beauty segment is characterized by a shift towards high-end and efficacy-driven products, with brands like Mao Ge Ping and Shangmei Holdings recommended for their growth potential [5][50]

Core Viewpoint - The Xiamen city duty-free store, operated by China Duty Free Group, has officially opened after a comprehensive upgrade, marking a new chapter in duty-free consumption in Xiamen and supporting the city's development as an international consumption center [1] Group 1: Store Launch and Offerings - The Xiamen city duty-free store features a variety of international brands in categories such as perfumes, cosmetics, luxury accessories, premium luggage, and imported beverages, catering to diverse consumer demands for quality living [3] - The store offers limited-time discounts on duty-free products, with prices starting from 50% off, and special benefits for members, including 10x points and a welcome gift worth 666 yuan [3] Group 2: Sales and Purchase Process - The sales target of the city duty-free store includes travelers who will depart via air or international cruise within 60 days, explicitly including Chinese nationals [6] - The purchasing process allows travelers to buy products in the city and pick them up at designated duty-free points at the port of departure [6] Group 3: National Trend and Cultural Integration - The store serves as a new window for national trend products to go global, offering convenient "buy and pick up" services without the need for departure proof [7] - The national trend section combines Eastern aesthetics with contemporary trends, featuring core categories such as national fragrance, fine wines, and lifestyle aesthetics, integrating traditional craftsmanship with modern living [7] Group 4: Tax Refund Innovations - The store is one of the first in Xiamen to implement the "buy and refund" policy, successfully completing its first transaction during the trial operation, streamlining the tax refund process for travelers [10] - This innovation enhances the shopping experience for international travelers and promotes domestic brands on the global stage [12]

Group 1 - The first downtown duty-free store in Fujian, operated by China Duty Free Group, has been upgraded to enhance shopping convenience for domestic and international tourists [2][3] - The new shopping model allows tourists to select products in the city and pick them up at the airport, with prices for international brand cosmetics being over 25% cheaper than in-store prices [2][3] - The initiative expands the duty-free policy from airport locations to urban core areas, targeting travelers departing within 60 days, thus allowing for a more relaxed shopping experience [2][3] Group 2 - The downtown store serves as a "pre-purchase experience center," while the airport store functions as an "immediate purchase service center," ensuring seamless integration of shopping experiences [3] - China Duty Free Group plans to introduce more initiatives in Xiamen, leveraging the downtown duty-free store to promote the integration of global buying and selling in core business districts [3] - The opening of the "cdf Guochao store" next to the downtown duty-free store allows both domestic and international travelers to purchase local trendy products with immediate pickup and tax refund services for eligible foreign travelers [3]

Core Viewpoint - Chao Hong Ji plans to issue H-shares and list on the Hong Kong Stock Exchange to enhance its global strategy, international brand image, and competitiveness while connecting with overseas capital markets [1] Strategic Motives - The H-share listing is a key move in Chao Hong Ji's "Eastern Culture + Capital Going Global" strategy, aiming to expand into Southeast Asia and replicate its successful business model [2] - The official rationale for the H-share issuance is to advance globalization and enhance brand image, but it also aims to address the valuation bottleneck in the A-share market, where the dynamic P/E ratio is significantly higher than the industry average [2] - The timing of the H-share listing aligns with the recovery of the Hong Kong IPO market, allowing the company to benefit from policy incentives and avoid tightening regulations in the A-share market [2] Financial Challenges - In 2024, Chao Hong Ji's revenue increased by 10.48% to 6.518 billion yuan, but net profit dropped by 41.91% to 194 million yuan, indicating a "scale without economy" issue [3] - The decline in profit is attributed to rising gold prices and increased costs from channel expansion, with the average gold price up 18% and sales expenses rising by 32% due to the opening of 129 new stores [3] - The company faces liquidity challenges, with inventory turnover days increasing to 202 and operating cash flow declining by 29.22% to 435 million yuan, highlighting supply chain and franchisee financial pressures [3] - The funds raised from the H-share issuance will be used for working capital, debt repayment, and overseas expansion, indicating a need for debt structure optimization [3] Capital Arbitrage Risks - The H-share issuance presents risks related to valuation discrepancies and governance issues, as the A+H valuation system may lead to conflicts between cash flow focus in Hong Kong and speculative valuations in A-shares [4] - The controlling shareholder's opaque shareholding structure raises concerns about potential dilution of minority shareholders' rights through various financial instruments [4] - The sustainability of the business model is questioned, with overseas revenue currently below 5% and challenges in price competitiveness in Southeast Asian markets [4] Market Insights - Chao Hong Ji's H-share listing reflects broader challenges in the gold and jewelry industry, balancing between hedging against gold price fluctuations and capturing consumer premium [6] - A successful listing could prompt similar actions from A-share peers, but it may also expose common industry weaknesses such as reliance on franchise expansion and price competition [6] - Investors should be cautious of the disconnect between cultural narratives and financial fundamentals, with the need to validate the profitability of the Southeast Asian expansion and the scalability of traditional craftsmanship [6]

Summary of China Duty Free Group's Conference Call Company Overview - **Company**: China Duty Free Group (中国中免) - **Industry**: Duty-Free Retail Key Points Financial Performance - In 2024, China Duty Free achieved a revenue of **564.74 billion RMB** and a net profit of **42.67 billion RMB** [3] - The gross profit margin improved to **32.02%**, an increase of **0.21 percentage points** year-on-year [3] - The cash dividend payout ratio was raised to **50.91%**, with total cash dividends amounting to **21.72 billion RMB** [2][3] Market Position and Strategy - The company's market share in the Hainan offshore duty-free market increased to **84%**, up by **2 percentage points** [4] - The Sanya International Duty-Free City was recognized as a **national 4A scenic area**, enhancing the integration of duty-free shopping and cultural tourism [4] Global Expansion - Currently operates **17 overseas duty-free stores** and **3 cruise duty-free stores** [5] - Successfully won bids for **10 airport and port projects**, including Guangzhou Baiyun and Kunming Changshui [5] Product and Brand Development - Introduced over **200 international brands**, including more than **20 exclusive brands** [6] - The total number of SKUs across all channels exceeded **360,000**, catering to diverse consumer needs [6] Digital Transformation and Membership Growth - Membership reached **43 million**, a **19%** increase year-on-year [7] - The company is enhancing its membership system to improve marketing and service levels [7] Inventory and Risk Management - End-of-year inventory decreased by **18%** compared to the previous year [2][3] - Implemented strategies to manage inventory effectively, with a projected **17.6%** reduction in inventory by the end of 2024 [13][14] - Achieved over **100 million RMB** in foreign exchange gains through effective risk management [15] ESG Initiatives - Achieved an **A rating** in ESG performance and was included in the **Central State-Owned Enterprises ESG Pioneer 100 Index** [8] - Engaged in various community service and environmental protection activities [8] Future Development Strategy - Focus on new consumption trends, enhancing customer experience, and expanding international operations [9] - Plans to accelerate the development of urban duty-free businesses and deepen the "national trend going abroad" strategy [9] Urban Duty-Free Store Developments - Several urban duty-free stores have completed transformation and are operational [10] - Successfully won the operating rights for urban duty-free stores in **six cities** [10] Board of Directors and Governance - New board members bring extensive experience in management, capital operations, and legal risk control [12] - The board aims to enhance governance and capture new market opportunities [12] Capital Expenditure and Project Updates - Capital expenditure is being managed conservatively, with no large-scale plans currently [20] - Significant progress in key projects, including the Sanya International Duty-Free City [21] Marketing and Consumer Engagement - Emphasis on user experience and high-quality service, with plans to innovate service offerings [23][24] - Engaging in thematic marketing through live streaming and new media channels [24] Impact of Policy Changes - The implementation of departure tax refund policies is expected to enhance shopping convenience for international travelers [22] - Observations indicate a preference among foreign tourists for Chinese electronic products and cultural items [22] This summary encapsulates the key insights and developments from the conference call, highlighting the company's strategic direction, financial performance, and market positioning within the duty-free retail industry.

Core Insights - The article highlights the emerging opportunities for Chinese brands in the automotive aftermarket to expand internationally, particularly in Southeast Asia, the Middle East, and Europe, driven by increasing demand and technological innovation [2] - It discusses the trend of Chinese companies adopting a "group out" strategy to mitigate risks associated with globalization, emphasizing collaboration and resource sharing among enterprises [5] - The article also explores the innovative approaches of Chinese cultural IPs in global markets, showcasing successful cases like "Nezha" and the importance of creating a collaborative ecosystem around IP [6] - It outlines the strategic responses of Chinese enterprises to global challenges, focusing on compliance, risk management, and the need for a shift in mindset towards becoming rule-makers in international trade [7] Industry Environment - The Chinese automotive aftermarket is entering a golden period for brand internationalization, with exports projected to rise from 2.01 million units in 2021 to 5.86 million units by 2024, particularly in the new energy vehicle sector [2] - A new "Smart Terminal Overseas Service Innovation Alliance" has been established to enhance digital service capabilities for smart terminal exports, with expectations of reaching $250 billion in export value by 2024 [3] - The "group out" strategy is gaining traction among Chinese companies, focusing on service-oriented overseas expansion and collaborative resource sharing to build competitive advantages [5] Cultural and IP Expansion - The success of Chinese IPs like "Nezha" demonstrates the potential for cultural exports, with the film grossing over 15 billion yuan during the 2025 Spring Festival, highlighting the importance of IP-driven ecosystem development [6] - The article emphasizes the shift from product-focused strategies to creating immersive experiences and cross-industry collaborations to enhance brand recognition and cultural resonance [6] Globalization Strategies - Chinese companies are advised to adopt three key strategies in response to global challenges: "stop the bleeding" by ceasing high-risk activities, "blood production" by exploring new revenue sources, and "blood exchange" by fostering international perspectives [7] - The article stresses the importance of legal compliance and supply chain restructuring to enhance global competitiveness [7] Regional Focus - Chinese construction firms are making significant strides in the Middle East, with investments totaling several billion dollars, positioning the region as a key market for Chinese infrastructure projects [8][9] Company Dynamics - Yili's international business is projected to show results in the next five years, with a revenue target of 115.78 billion yuan in 2024 and a focus on steady growth in Southeast Asia [12] - Tencent Cloud is accelerating its international expansion in Japan, with plans to build a third data center and launch a food reservation mini-program to cater to Chinese tourists [14] - Moutai's overseas revenue is expected to reach $970 million by 2024, with a 37.53% increase in Q1 2025, as the company focuses on cultural output and quality enhancement [15] - The rapid growth of Pop Mart's overseas revenue by 480% in Q1 2025 illustrates the effectiveness of its "IP + trendy toys + experience economy" model in global markets [21]

一直以来，中免集团始终坚守对产品和服务品质的严格把控。从采购端到零售端，中免集团精细化 运营管理，确保每一件商品都能成为品牌良好形象的有力载体。中免集团矢志不渝做品牌商开拓中国市 场最值得信赖的合作伙伴，成为国潮出海最可信赖的通道，助力更多优秀的中国品牌迈向国际舞台。 未来，中免集团将继续积极助力国潮品牌的国际化进程，通过海外渠道拓展、文化融合创新等方 式，推动国潮品牌走向世界，携手全球伙伴共同书写旅游零售行业高质量发展的新篇章。 会上进行了国潮出海及战略品牌签约活动，中免集团与华熙生物科技股份有限公司、巨子生物集 团、上海自然堂集团有限公司、依文控股有限公司、仙游三鼎文化艺术有限公司、莆田藏云堂艺术品有 限公司、青春之家（福建）体育用品有限公司以及厦门天行客数字科技有限公司等8家极具代表性的国 潮品牌签署了战略合作协议。 此次战略合作签约是中免集团持续深化与国潮品牌合作的重要里程碑。中免集团作为全球领先的旅 游零售商，将充分发挥自身在全球渠道网络、供应链管理和消费者洞察方面的优势，为国潮品牌提供从 产品推广到渠道拓展的全面支持。这些国潮品牌也将在深度合作的基础上加速海外市场布局，推动中国 文化与全球消费的深 ...