Core Viewpoint - The duty-free industry is witnessing a significant recovery with a narrowing decline in sales and a strong rebound in average transaction value, indicating a new investment window due to the implementation of the closure policy, the rollout of "buy and refund" services, and the context of increased tariffs on imports from the US [1][2]. Group 1: Hainan Duty-Free Market - Sales decline in Hainan's duty-free sector is narrowing, with sales amount showing marginal improvement in the first five months of 2025 [1]. - The average transaction value has turned positive after two years of decline, with February's average price per item reaching a recent high [1]. - The implementation of the closure policy is expected to enhance Hainan's overall attractiveness in consumption, business, and logistics, thereby strengthening the core competitiveness of leading companies as customer flow potential is gradually released [1]. Group 2: Tax Refund and Market Dynamics - The nationwide promotion of the "buy and refund" service starting April 8 is expected to increase the shopping conversion rate for foreign consumers in China [2]. - The duty-free channel has significant price advantages over taxed channels, allowing for substantial market share expansion; for example, duty-free cosmetics can be priced at 70-80% of taxed prices, while wine can be as low as 60% and tobacco at 45% [2]. - The decline in South Korean duty-free sales due to local customer purchasing power and regulatory changes is enhancing Hainan's position as a substitute market [2].

Group 1 - The construction of Hainan Free Trade Port is a significant strategic decision made by the central government to promote innovation and development in socialism with Chinese characteristics [1] - Since the implementation of the overall plan in June 2020, the Hainan Free Trade Port has established a policy system characterized by "zero tariffs, low tax rates, and simplified tax systems" [2] - As of April 2025, the total value of imports under the "zero tariff" lists reached 22.585 billion yuan, resulting in a tax reduction of 4.308 billion yuan [2] Group 2 - The first batch of 31 projects related to the Hainan Free Trade Port's closure operation has been completed and accepted, focusing on port construction and customs inspection facilities [2] - Over 60 international vessels have registered under the "China Yangpu Port" ship registration system, with a total tonnage exceeding 5.83 million tons, making it the leading port in terms of registered vessels and total capacity among free trade ports in China [2][3] - Hainan has released 19 batches of 158 institutional innovation cases, with 11 cases being promoted nationwide by the State Council [3] Group 3 - The continuous optimization of the business environment in Hainan has stimulated the vitality of economic development, with over 70% of business entities being newly established after the implementation of the overall plan [3] - The provincial government is focused on top-level design and aims to promote a series of systematic and integrated innovative cases to enhance the overall innovation environment [4]