Core Viewpoint - The report from Jefferies indicates that China Duty Free Group (01880) is expected to exceed market profit expectations for Q4 2025 by 23% and the firm's estimates by 5%, while revenue is projected to be 3% above market expectations but 5% below the firm's estimates [1] Group 1 - China Duty Free Group's sales trend has shown signs of recovery since the full island closure in Hainan on December 18 [1] - The target price for China Duty Free Group is set at HKD 61.7, with a rating of "Hold" [1] - The company is scheduled to announce its complete financial report for 2025 on March 30 [1] Group 2 - Market focus is expected to be on the sales forecast post-Hainan's closure, the transition to fully owning the port duty-free business from a 51% stake in Sunrise China/Beijing, and the opening of the mid-2026 Taikoo Place [1]

Group 1 - The A-share market showed mixed performance in February, with the Shanghai Composite Index rising by 1.09% to 4162 points, the Shenzhen Component Index increasing by 2.04% to 14495 points, while the ChiNext Index fell by 1.08% to 3310 points [1] - The top five performing sectors over the past 20 trading days included: small metals up 24.71%, oil and gas extraction and services up 21.44%, zinc metals up 17.23%, fiber optic concepts up 14.83%, and BC batteries up 14.8% [1] - The bottom five performing sectors during the same period were: newly listed sci-tech stocks down 5.87%, duty-free shops down 4.73%, DRG/DIP down 4.62%, electronics down 4.41%, and food processing and manufacturing down 4.3% [1] Group 2 - The top five individual stocks in February were: Electric Science Blue Sky up 640.97%, Aide Technology up 153.46%, Haiseng Medical up 149.92%, Beixin Life up 135.05%, and YN Holdings up 115.16% [1] - The bottom five individual stocks during the same period were: Kaipu Cloud down 47.71%, *ST Guohua down 45.32%, *ST Jinglun down 30.48%, ST Cuihua (rights protection) down 30.37%, and *ST Huike (rights protection) down 30.36% [1]

Core Insights - Hainan Free Trade Port officially commenced full island closure operations on December 18, 2025, leading to a surge in tourism, consumption, and overall economic activity during the first Spring Festival post-closure [2][8] Tourism and Visitor Statistics - From February 2 to February 10, 2026, Hainan welcomed a total of 2.79 million travelers, marking an 8.62% increase year-on-year [2] - During the 2026 Spring Festival holiday, Hainan received 12.32 million visitors, generating a total tourism expenditure of 18.37 billion yuan, reflecting year-on-year growth of 28.9% and 30.7% respectively [7] Consumer Behavior and Spending - The implementation of the new duty-free shopping policy has led to significant discounts, with prices for new Apple products reduced by approximately 989 yuan compared to official prices [5] - Since the adjustment of the duty-free policy on November 1, 2025, the total amount of duty-free shopping monitored by Haikou Customs reached 11.585 billion yuan, a year-on-year increase of 14.71% [5] Policy Changes and Economic Impact - The "zero tariff" policy for Hainan residents allows for the annual duty-free purchase of 10,000 yuan worth of specified imported goods, enhancing consumer benefits [6] - The opening of the first duty-free store for daily consumer goods in Sanya on February 11, 2026, indicates a growing trend towards increased consumer options and convenience [6] Market Dynamics - The number of newly registered foreign trade enterprises in Hainan reached 5,132 since the start of the closure operations, indicating a positive response from investors [3] - The duty-free shopping policy has expanded to include 47 categories of goods, with the addition of pet supplies and portable musical instruments, further stimulating consumer interest [4]

Core Insights - The return flight tickets from Hainan Sanya reached nearly 10,000 yuan during the Spring Festival peak, while post-holiday tickets dropped to as low as 200 yuan [2][3] - The Spring Festival travel period saw record-breaking passenger throughput at Hainan's three major airports, with over 20 million passengers in 15 days [2] - Sanya's duty-free sales exceeded 2 billion yuan on several days, with a total sales amount of 35.49 billion yuan for the month, marking a 29% year-on-year increase [2][3] Group 1: Travel Demand and Supply - Over 10 million people traveled to Hainan during the Spring Festival, with daily passenger throughput exceeding 20,000 [2] - The domestic air passenger volume to Hainan during the 2026 Spring Festival reached over 1.76 million, a 7% increase compared to the previous year [3] - Airlines added over 2,000 flights to Hainan, increasing seat capacity by 600,000, but still could not meet the high demand for return flights [3][4] Group 2: Hotel and Duty-Free Sales Performance - Hotels in Sanya experienced a significant increase in revenue, with Sanya Atlantis reporting over 1.24 billion yuan in revenue during the Spring Festival, a 20% increase year-on-year [3] - Average occupancy rates reached 98%, and daily room prices increased by 17%, achieving the best performance in history for the Spring Festival [3] - Duty-free sales in Sanya saw a remarkable growth, with sales on February 22 reaching 2.29 billion yuan, a 161.5% year-on-year increase [2][3]

Core Insights - The tourism market in Sanya is experiencing a significant boost during the 9-day Spring Festival holiday in 2026, coinciding with the Hainan Free Trade Port's closure policy, leading to increased visitor numbers and spending [1] Group 1: Visitor Statistics - From February 15 to 23, Sanya received 3.3129 million domestic and international tourists, representing a year-on-year increase of 14.64% [1] - The total expenditure by tourists during this period reached 8.957 billion yuan, marking an 18.72% increase compared to the same period last year [1] - Sanya's train station recorded 687,700 entries and exits, a year-on-year growth of 27.29% [3] Group 2: Transportation and Infrastructure - Sanya Phoenix International Airport completed 4,080 flight takeoffs and landings, transporting over 845,000 passengers [3] - To accommodate the peak return flow of travelers, the airport increased flight frequencies on popular routes and deployed more wide-body aircraft [3] - The newly operational T3 terminal has enhanced the airport's capacity to manage high passenger volumes during peak periods [3] Group 3: Marine Tourism - The marine tourism market in Sanya remains robust, with 5,950 ferry trips recorded, transporting 819,200 passengers, reflecting increases of 20.57% and 42.19% respectively [3] - Yacht activities also saw growth, with 10,991 yacht trips and 73,300 passengers, indicating significant year-on-year increases [3] Group 4: Duty-Free Sales - The Hainan duty-free policy has shown strong performance during the holiday, with total sales from four duty-free stores in Sanya reaching 1.96 billion yuan, a 23.7% increase year-on-year [3] - Daily sales at Sanya's duty-free stores exceeded 200 million yuan for seven consecutive days during the holiday [3] Group 5: Hotel and Attractions Performance - Sanya Atlantis reported a total revenue of 124 million yuan during the holiday, a 20% increase compared to the previous year [4] - The Wuzhizhou Island Tourist Area experienced a daily average of 18,000 visitors, a 3% increase year-on-year, and introduced new attractions and extended operating hours [4] Group 6: Visitor Services - Eight major attractions in Sanya launched panoramic live streaming, allowing visitors to check real-time crowd levels and queue times [5] - Free parking was provided at 110 internal parking lots during the holiday to alleviate parking difficulties, along with the establishment of an additional free parking area at Beijing Daxing International Airport [5]

Core Viewpoint - The duty-free retail sector has experienced a significant decline, with China Duty Free Group hitting its daily limit down, alongside other companies such as Hainan Airlines Group, Caesar Travel, Hainan Development, and Zhuhai Duty Free Group following suit [1][2]. Company Summary - China Duty Free Group's spokesperson stated that the company has no undisclosed information that should have been revealed, suggesting that the stock price fluctuations may be related to changes in U.S. tariff policies [1][2].

Group 1 - The duty-free shop sector experienced a short-term decline, with China Duty Free Group hitting the daily limit down [1] - Other companies such as Hainan Airlines Group, Caesar Travel, Hainan Development, and Zhuhai Duty Free Group also saw declines [1]

Core Viewpoint - The Ministry of Finance, in collaboration with several other government departments, has officially approved the establishment of three duty-free shops in Jilin Province, enhancing the province's duty-free shopping network and promoting cross-border consumption [1] Group 1: Duty-Free Shop Establishment - Three duty-free shops will be set up at Changchun Longjia International Airport, Yanji Chaoyangchuan International Airport, and Hunchun Land Port [1] - The locations of the duty-free shops align with the province's open layout, with Changchun serving as the air gateway, Yanji targeting the Northeast Asia region, and Hunchun being a key land port for trade with Russia [1] Group 2: Economic Impact - The approval of these duty-free shops aims to create a comprehensive duty-free shopping network covering major entry and exit points in Jilin Province [1] - The initiative is expected to enrich the duty-free industry in Jilin and promote mutual benefits with existing outbound duty-free shops, achieving full coverage of duty-free consumption scenarios at entry and exit ports [1] Group 3: Operational Plans - Relevant departments in Jilin Province will guide the airport group and Hunchun Port to expedite the bidding process for operational entities, aiming for the duty-free shops to commence operations in the shortest possible time [1]

Core Insights - The average daily sales of key retail and catering enterprises in the country increased by 8.6% compared to the same period in 2025 during the first four days of the holiday [1] Group 1: Consumer Demand - Strong consumer demand is evident, with the foot traffic and sales in 78 monitored pedestrian streets increasing by 4.5% and 4.8% respectively compared to the same period last year [1] - The "old-for-new" policy has positively impacted sales, benefiting 28.88 million people and generating sales of 198.02 billion yuan as of February 19, 2026 [1] - The automotive sector saw 612,000 vehicles traded in under the "old-for-new" policy, leading to new car sales worth 100.53 billion yuan [1] Group 2: Technology and Smart Products - There is a notable increase in the sales of smart products, with sales of smart wearable devices rising by 19.7% during the first three days of the holiday [1] - Specific categories such as smart glasses and smart blood glucose meters experienced significant growth, with smart glasses sales increasing by 2.5 times and smart blood glucose meters by 48.6% [1] Group 3: Tourism and Service Consumption - Domestic travel consumption on key platforms grew by 4.5% during the first three days of the holiday [1] - The volume of car rental orders increased by 26%, with cross-regional orders rising dramatically by 196% [1] Group 4: Duty-Free Sales - Duty-free sales in Hainan showed rapid growth, reaching 970 million yuan during the first four days of the holiday, marking a 15.8% increase [1]

Traffic Control Measures - Temporary traffic control measures will be implemented in Sanya's Haitang District from February 16 to March 4, 2026, to alleviate traffic pressure due to increased visitor flow during the Spring Festival [1] - Specific road sections affected include Longhai Road and Haitang North Road, where vehicles will be required to take alternative routes [1][3] Restrictions on Heavy Vehicles - During the control period, large and medium-sized freight vehicles are prohibited from entering several key roads including Haitang North Road, Yelin Road, and Longhai Road [3] Temporary Parking Arrangements - Two temporary parking lots will be established at Sanya International Duty-Free City during the Spring Festival: one on Fujiao Road with shuttle services and another at the intersection of Haitang North Road and Yelin Road for parking only [4] Ride-Hailing Regulations - Ride-hailing services will not be allowed to pick up or drop off passengers on Haitang North Road and Longhai Road during the traffic control period, with penalties for violations enforced by traffic police [5] Event-Specific Traffic Control - A separate traffic control will be in effect for the "Michelin Spring Festival Carnival" on Guohai Road from February 16 to February 23, 2026, allowing only pedestrian access [5][6]