Group 1: Zero Tariff Policy - The proportion of "zero tariff" goods for "first-line" imports will increase from 21% to 74%, allowing tax-free circulation among beneficiaries on the island, with goods processed and valued at 30% exempt from tariffs when sold to the mainland [1] Group 2: Trade Management Measures - Open arrangements will be made for certain currently prohibited and restricted import goods in the "first-line" import direction [2] Group 3: Travel and Business Operations - Most goods, as well as all personnel, items, and transportation tools entering and exiting Hainan Island, will continue to be managed according to existing regulations, with no changes before or after the closure [3] Group 4: Duty-Free and Tax Incentives - The duty-free allowance for leaving the island remains at 100,000 yuan per person per year, and high-end talent will have personal income tax exemptions on amounts exceeding 15% until the end of 2027 [4] Group 5: Direction of Opening Up - The direction of expanding openness remains unchanged, with more convenient passage measures [5] Group 6: Port Operations - Eight existing open ports on the island will serve as "first-line" ports, allowing eligible imported goods to be released, while ten "second-line" ports will be established to facilitate innovative and convenient passage for goods entering the mainland [7] Group 7: Regulatory Model - A low-intervention, high-efficiency regulatory model will be implemented for "zero tariff" goods and relaxed trade management measures to ensure the smooth implementation of various open policies [8] Group 8: Concept of Closure - The term "closure" does not imply isolation but rather aims to enhance openness by creating a special regulatory area that integrates Hainan more closely into the global economic system [9] Group 9: Safety and Risk Management - During the implementation of the closure policy, there will be a consistent focus on preventing major risks to ensure the correct and healthy development of Hainan's free trade port construction [10] Group 10: Customs Regulation - The closure policy will establish Hainan Island as a special customs supervision area, characterized by "first-line" openness, "second-line" management, and internal freedom [11] Group 11: Management of Second-Line - The area between Hainan Free Trade Port and the mainland will be treated as a "second-line," implementing precise management for the contents opened in the "first-line" [12] Group 12: Management of First-Line - The area between Hainan Free Trade Port and other countries and regions outside China's borders will be treated as a "first-line," implementing a series of free and convenient entry and exit measures [13]

Core Insights - The event held on December 11 focused on promoting the Hainan Free Trade Port's policies and fostering collaboration between Hainan and Shenzhen, aiming to enhance international development strategies for enterprises in the Greater Bay Area [1][4]. Group 1: Policy and Economic Environment - The Hainan Free Trade Port will officially start its full island closure operation on December 18, transitioning to a new phase characterized by "one line open, one line controlled, and free within the island" [4]. - Key policies include "zero tariffs, low tax rates, and simplified tax systems," which are expected to provide significant benefits, especially for processing and manufacturing enterprises [4][6]. - The "processing value-added duty exemption" policy allows goods with over 30% value added in Hainan to enter the mainland duty-free, making it easier for high-end manufacturing to establish operations [6]. Group 2: Investment Opportunities - The event showcased the investment value and development opportunities within the Haikou economic circle, highlighting the advantages of the local resources and supportive policies [6]. - The sixth China International Consumer Products Expo, scheduled for 2026, will serve as a dynamic platform for global exposure and connection for technology consumer products [7][9]. - The expo aims to transition from a luxury goods showcase to a launchpad for technology consumer products, providing top-tier exposure opportunities through collaborations with mainstream media and influencers [9]. Group 3: Business Strategies and Ecosystem - Companies are encouraged to build a "Shenzhen R&D - Hainan manufacturing - Hong Kong capital" triangular collaborative structure to leverage the strengths of each region [12]. - The geographical advantage of Hainan as a gateway to Southeast Asia is emphasized, with companies expressing the potential for quicker logistics to ASEAN countries [12]. - The global service center is positioned to play a crucial role in facilitating overseas market expansion for technology enterprises, reducing trial and error costs [14]. Group 4: Future Outlook - The collaboration between Shenzhen and Hainan is seen as a practical exercise in deepening China's opening-up strategy, with expectations for enhanced service capabilities to support enterprises in their international endeavors [15].

Group 1 - The Hainan Free Trade Port will officially start its full island closure operation on December 18, enhancing its appeal for winter tourism and shopping with a "zero tariff" policy on goods [1] - Popular hotel types in cities like Sanya and Haikou have already sold out for the first weekend after the closure, with family rooms and sea view suites being the most sought after [1] - Hotel search interest for Sanya during the New Year holiday has increased by over 200% year-on-year as of December 10 [1] Group 2 - The Yanoda Rainforest Scenic Area has seen a significant increase in ticket bookings, with a year-on-year growth of over 25% for the New Year holiday [2] - The scenic area is launching promotional packages and cross-year themed activities, while also introducing multilingual guided services to cater to inbound tourism [2] - New tourism routes tailored to the needs of international visitors have been fully launched in the market [2]

Core Viewpoint - The establishment of the Hainan Free Trade Port's customs closure operation marks a new phase in its strategic positioning as a comprehensive reform and opening-up pilot zone [1] Regulatory Framework - Hainan aims to create a new high ground for institutional openness through a regulatory framework of "open on the first line, controlled on the second line, and free within the island" [1] - The policy is designed to align with international high-standard economic and trade rules [1] Economic Impact - The customs closure policy reduces import costs for enterprises and enhances trade facilitation levels [1] - Tax incentives and financial openness measures have attracted significant domestic and foreign investment [1] Specific Policies - The implementation of "zero tariffs," tax exemptions for processing and value-added, and the establishment of multifunctional free trade accounts provide unprecedented development opportunities for enterprises [1] Compliance Requirements - The policy benefits come with increased compliance requirements, necessitating enterprises to establish more comprehensive compliance systems [1] Overall Outlook - The customs closure policy of the Hainan Free Trade Port is expected to profoundly change the regional economic landscape, bringing new opportunities for businesses and investors [1]

Core Insights - The establishment of the Hainan Free Trade Port marks a new phase in its strategic positioning as a comprehensive reform and opening-up pilot zone, aiming to create a new high ground for institutional openness and align with international high-standard economic and trade rules [1][2] Taxation Policies - Hainan Free Trade Port has implemented "zero tariff" and processing value-added tax exemption policies, significantly reducing the import costs of raw materials and customs clearance for enterprises [2] - The preferential measures for corporate income tax and individual income tax further enhance profit retention for businesses and attract talent [2] Financial Opening - The establishment of multi-functional free trade accounts facilitates cross-border capital flow for enterprises, lowering the cost of capital operations [2] Industry Support Policies - Hainan Free Trade Port provides key support to core industries such as tourism, modern services, and high-tech industries through special support policies and tax incentives, promoting technological breakthroughs and industrialization [2] - Innovative developments in bonded processing, transshipment trade, and cross-border e-commerce have created an efficient and convenient domestic open environment [2] Market Impact - The closure policy of Hainan Free Trade Port offers unprecedented development opportunities for enterprises, reducing costs and enhancing international competitiveness [2] - The policy dividends have attracted significant domestic and foreign investment, driving rapid regional economic growth [2] - However, the implementation of these policies comes with increased compliance requirements, necessitating enterprises to establish more robust compliance systems to ensure operations align with policy requirements [2] Future Outlook - Hainan Free Trade Port is expected to continue deepening reform and opening up, optimizing the business environment, and providing more opportunities for enterprises and investors [2] - With the in-depth implementation of the closure policy, Hainan is poised to become a key gateway for China's new era of opening up to the outside world [2]

Core Viewpoint - The establishment of the Hainan Free Trade Port's customs closure operation marks a new phase in its strategic positioning as a comprehensive reform and opening-up pilot zone [1] Regulatory Framework - Hainan aims to create a new high ground for institutional openness through a regulatory framework of "open on the first line, controlled on the second line, and free within the island" [1] - The policy is designed to align with international high-standard economic and trade rules [1] Economic Impact - The customs closure policy reduces import costs for enterprises and enhances trade facilitation levels [1] - Tax incentives and financial openness measures have attracted significant domestic and foreign investment [1] Specific Policies - The implementation of "zero tariffs," tax exemptions for processing and value-added, and the establishment of multifunctional free trade accounts provide unprecedented development opportunities for enterprises [1] Compliance Requirements - The policy benefits come with increased compliance requirements, necessitating enterprises to establish more comprehensive compliance systems [1] Overall Outlook - The customs closure policy of the Hainan Free Trade Port is expected to profoundly change the regional economic landscape, bringing new opportunities for businesses and investors [1]

Core Insights - The training session in Tunchang County focused on the implementation of the Hainan Free Trade Port closure policies and aimed to enhance the capabilities of local leaders and business representatives in executing these policies effectively [1] Group 1: Training Objectives - The training aimed to provide a systematic interpretation of the core policies of the Hainan Free Trade Port, including tax exemption policies for processing and value-added activities [1] - The session included interactive discussions, allowing representatives from relevant departments and local enterprises to engage actively [1] Group 2: Expected Outcomes - Participants were encouraged to integrate the training knowledge with their work, emphasizing the importance of regular risk assessments and conflict resolution [1] - The training was organized by the Tunchang County Committee, the County Development and Reform Commission, and the investment promotion task force, highlighting a collaborative approach to policy education [1] - The goal is for participants to become proficient in understanding policies, business operations, and practical applications, particularly in relation to Tunchang [1]

Investment Rating - The industry investment rating is "Accumulate" [5] Core Viewpoints - The duty-free industry is experiencing a positive turnaround in fundamentals, with high-frequency data for Hainan's offshore duty-free sales showing improvement in Q3 2025, and a stable outlook for Q4 2025 [1][3] - Recent policy implementations have clarified the direction for the Hainan Free Trade Port, with significant announcements made regarding the closure date and adjustments to duty-free policies [2][3] - The operational performance of duty-free businesses is expected to improve, with notable increases in shopping amounts and visitor numbers following the implementation of new policies [3] Summary by Sections Industry Performance - In Q3 2025, Hainan's offshore duty-free sales totaled 5.402 billion yuan, a year-on-year decrease of 2.7%, with shopping visits at 946,800, down 23.4% year-on-year. The average transaction value increased by 27.1% to 5,705.53 yuan [1] - September 2025 saw duty-free sales of 1.733 billion yuan, a year-on-year increase of 3.4%, with shopping visits at 280,000, down 7.3%, and an average transaction value of 6,189.29 yuan, up 22.0% [1] Policy Developments - On July 23, 2025, the State Council announced the closure date for the Hainan Free Trade Port as December 18, 2025, providing detailed policies that reflect a clear direction for the port [2] - On October 17, 2025, three departments released adjustments to the offshore duty-free policy, expanding the categories of duty-free goods and allowing more purchasing opportunities for travelers [2] Business Expectations - China Duty Free Group reported Q3 2025 revenue of 11.711 billion yuan, a year-on-year decrease of 0.38%, with net profit down 28.94% to 452 million yuan. However, there were improvements in revenue growth and gross margin on a quarter-on-quarter basis [3] - Following the implementation of the new duty-free policy on November 1, 2025, shopping amounts reached 78.549 million yuan, with significant increases in both the number of purchases and visitors compared to the previous day [3]

Core Viewpoint - China Duty Free Group (01880) experienced a decline of over 4%, with a current price of HKD 62.2 and a trading volume of HKD 203 million [1] Financial Performance - For the first half of 2025, the company reported revenue of RMB 28.151 billion, a year-on-year decrease of 9.96% [1] - Gross profit was RMB 8.99 billion, down 12.23% year-on-year [1] - Profit attributable to equity shareholders was approximately RMB 2.622 billion, reflecting a year-on-year decline of 20.68% [1] Market Position and Outlook - Dongwu Securities noted that the revenue decline in the second quarter has narrowed, but profitability remains under significant pressure [1] - The company maintains a solid market position as a leader in tourism retail, benefiting from the Hainan Free Trade Port's closure policy set for December 18, 2025, and the gradual establishment of duty-free shops [1] - Despite the current pressure on duty-free consumption demand, the long-term sales growth potential is expected to improve [1]

Core Insights - The Hainan Free Trade Port will officially start its full island closure operation on December 18, 2025, marking a new phase of openness and presenting significant development opportunities for local companies while raising the bar for brand value construction [1][3] Brand Value Status - Hainan has 9 listed companies in the national brand value TOP 3000 list, indicating a substantial room for improvement in brand building among local firms [1] - Hainan Rubber leads with a brand value of 9.56 billion, significantly surpassing the combined brand values of the second to fourth ranked companies, highlighting the need for more leading brand enterprises in the region [2] - The agricultural sector has the highest combined brand value exceeding 14 billion, while most other sectors have not surpassed 1 billion, indicating an imbalance in brand value distribution [2] Opportunities from Closure Policy - The total brand value of Hainan's listed companies is approximately 25.5 billion, ranking 30th among provincial administrative regions, which correlates closely with the region's GDP ranking [3] - The closure policy will implement a unique system of liberalization, expanding the range of zero-tariff goods from 1,900 to about 6,600, covering 74% of all goods [3] - Local companies are positioned to leverage policy advantages, but their success will depend on their ability to enhance competitiveness, address talent shortages, and innovate while facing increased competition [3]