Core Insights - The new duty-free shopping policy for travelers in Hainan has led to over 200 billion yuan in sales and 30 million shoppers since its implementation on July 1, 2020 [1] - The policy has introduced various convenient delivery methods, attracting numerous tourists and stimulating rapid growth in related industries [1] - Duty-free enterprises are actively engaging in the "first store, first launch, first show" economy, bringing in many internationally renowned brands [1] Regulatory and Service Enhancements - Hainan's duty-free market has shown significant vitality due to the continuous release of policy effects [1] - The customs authority has implemented a "concentrated + automated" order review model and drone delivery for duty-free products to enhance regulatory efficiency [1]

Core Viewpoint - UBS reports that China Duty Free Group (601888)(01880) has seen a narrowing decline in revenue for the second quarter year-on-year, but the extent is below market expectations, leading to a downgrade in earnings per share forecasts for 2025 to 2027 by 14% to 12% [1] Group 1: Financial Performance - The company's gross margin and net profit margin have deteriorated due to the impact of sales costs and expenses [1] - UBS maintains a "Buy" rating while raising the target price from HKD 58.4 to HKD 71.2 [1] Group 2: Sales Outlook - It is anticipated that sales at the Hainan duty-free stores will decline by 1% in the second half of the year due to a lower base, with a potential recovery in the fourth quarter [1] - If average customer spending stabilizes, sales in Hainan are expected to grow by 5% and 10% year-on-year in 2026 and 2027, respectively [1]

Core Viewpoint - UBS reports that China Duty Free Group (01880) has seen a narrowing decline in Q2 revenue year-on-year, but the decline is below market expectations, and gross margin and net profit margin have worsened due to sales costs and expenses [1] Financial Performance - UBS has lowered the earnings per share estimates for China Duty Free Group for 2025 to 2027 by 14% to 12% [1] - The target price for the company has been raised from HKD 58.4 to HKD 71.2 while maintaining a "Buy" rating [1] Sales Outlook - Due to a lower base, sales at China Duty Free's Hainan duty-free stores are expected to decline by 1% in the second half of the year, with a potential recovery in Q4 [1] - If average customer spending stabilizes, sales in Hainan are projected to grow by 5% and 10% year-on-year in 2026 and 2027, respectively [1]

Core Viewpoint - UBS reported that China Duty Free Group's revenue decline in the second quarter has narrowed year-on-year, but the extent was below market expectations, leading to a downgrade in earnings per share forecasts for 2025 to 2027 by 14% to 12% [1] Group 1: Financial Performance - The company's gross margin and net profit margin have deteriorated due to the impact of sales costs and selling expenses [1] - UBS maintains a "Buy" rating on the company, raising the target price from HKD 58.4 to HKD 71.2 [1] Group 2: Sales Forecast - It is anticipated that sales at China Duty Free's Hainan duty-free stores will decline by 1% in the second half of the year due to a lower base, with a potential recovery in the fourth quarter [1] - If average customer spending stabilizes, the company's Hainan sales are expected to grow by 5% and 10% year-on-year in 2026 and 2027, respectively [1]

随着政策效应持续释放，海南离岛免税市场活力显著增强，尤其在旅游旺季，企业备货与物流压力 大幅增加。为帮助企业应对挑战，保障热销免税品及时上架销售，海口海关积极推进智慧海关建设 和"智关强国"行动，创新实施离岛免税"集中+自动"审单模式改革，通过信息化集约化办理全岛12家免 税店的免税品备案、入出库准单审核等业务，实现免税品"即到即报即审即放"，审单效率提升60%，免 税品物流周转效率提升一倍，有效打通企业运营堵点。 根据海南离岛旅客免税购物政策新政规定，自2020年7月1日起，离岛旅客每年每人免税购物额度由 3万元提升至10万元，并取消单件商品免税限额，免税商品种类增加电子消费产品等7类消费者青睐的商 品。 新政实施后，海南离岛免税还相继推出邮寄送达、岛内居民返岛提取以及"即购即提"和"担保即 提"等多种便捷提货方式，不断优化旅客的购物体验，进一步释放免税消费潜力。同时，各免税企业持 续提升服务能级，积极布局"首店、首发、首秀"经济，引入众多国际知名品牌，推动离岛免税政策与海 南文化、体育、旅游、展览等领域深度融合，为产业高质量发展注入新活力。 三亚国际免税城总经理张彬介绍，为了抓住新政带来的新机遇，企业积极 ...

Group 1 - The Hainan duty-free shopping policy has led to over 2000 billion RMB in sales and 30 million shoppers since its implementation on July 1, 2020 [1] - The annual duty-free shopping limit per person has increased from 30,000 RMB to 100,000 RMB, and the number of duty-free product categories has expanded from 38 to 45 [1] - New product categories include bird's nest, alcoholic beverages, and electronic consumer products, enhancing the shopping experience for travelers [1] Group 2 - Duty-free enterprises in Hainan are actively introducing new brands and accelerating the restocking of popular products, benefiting from new shopping models like "immediate purchase and pick-up" [1] - The integration of duty-free policies with cultural, sports, tourism, and exhibition sectors is being promoted through initiatives like "first store, first launch, first show" [1] - The customs authority has implemented smart regulatory measures, including a "concentrated + automatic" review model and drone delivery for duty-free products to enhance regulatory efficiency [2]

Core Insights - The new policy implemented on July 1, 2020, increased the annual duty-free shopping limit for each traveler to 100,000 yuan and removed the single item duty-free limit, expanding the range of duty-free products to include seven categories such as electronic consumer products [1] Group 1 - Since the implementation of the new policy, as of September 11, the total monitored duty-free shopping amount has exceeded 200 billion yuan, with 30 million travelers participating in duty-free shopping [1] - The number of duty-free shopping items reached 247 million [1] - Various convenient pickup methods have been introduced, including mail delivery, island residents' retrieval, "immediate purchase and pickup," and "guaranteed pickup," enhancing the shopping experience for travelers and further unleashing the potential for duty-free consumption [1]

Group 1 - The establishment of a new company, China Duty Free (Fuzhou) Co., Ltd., with a registered capital of 20 million yuan [1] - The company's business scope includes the sale of duty-free goods, alcoholic beverages, food sales, online food sales, and retail of tobacco products [1] - The company is jointly held by China Duty Free Group Co., Ltd., a wholly-owned subsidiary of China Duty Free (601888) [1]

Core Viewpoint - The Hainan Free Trade Port is set to officially start its full island closure operation on December 18, 2025, as approved by the Central Committee of the Communist Party of China [1] Group 1: Tax Policy and Consumer Benefits - National authorities are conducting research on tax policies for certain imported goods for local residents to enhance their sense of gain [1] - Accompanying management measures will be developed and implemented once conditions are favorable [1] Group 2: Duty-Free Shopping Policy - The "duty-free shopping" policy for departing island travelers has significantly stimulated consumer enthusiasm since its implementation in 2011 [1] - The shopping limit has been raised to 100,000 yuan per person per year, leading to duty-free sales accounting for over 8% of the global duty-free market [1] - This policy has effectively promoted the construction of Hainan as an international tourism consumption center [1] Group 3: Policy Optimization - National departments are currently working on a new round of optimization and adjustment of the duty-free policy to enhance its attractiveness [1] - The aim is to promote the return of overseas consumption through improved policy measures [1]

Core Viewpoint - The audit function at China Duty Free Group (中免) is not merely about identifying errors but serves as a governance radar and value protector, aiming to enhance management and mitigate risks [1][3]. Governance Foundation - The audit department is directly accountable to the Party Committee and the Board of Directors, establishing an independent and authoritative audit system under the leadership of the Chairman and Party Secretary [3]. - In 2024, the audit and risk management committee and the supervisory board held 11 meetings, reviewing 31 proposals to prevent unilateral decision-making and continuously optimize governance structure [3]. Risk Control - The company is implementing a dual mechanism of "mandatory audits" and "in-process audits" to ensure that power is confined within institutional frameworks [4]. - The audit department emphasizes proactive risk management, transitioning from post-event error checking to preemptive warnings, likening risk control to installing smoke detectors [7]. Management Empowerment - The audit is viewed as a "management doctor," diagnosing issues and recommending solutions, focusing on management pain points such as ineffective assets and funding issues [10]. - Audit reports are increasingly used as critical references for operational assessments and personnel decisions, significantly enhancing the rigor of corrective actions [10]. Public Trust - The audit function plays a crucial role in ensuring the authenticity and compliance of information disclosures, which are vital for investor confidence [13]. - In 2024, the company successfully completed various disclosure documents, reinforcing its commitment to high-quality information disclosure and market credibility [13]. Audit Philosophy - The audit department aims to evolve from merely identifying problems to actively driving solutions, focusing on both safeguarding operational boundaries and enabling value growth [14]. - Future plans include transitioning from localized audits to comprehensive audits, integrating strategic collaboration to support high-quality growth [14].