Investment Rating - The report maintains an "Accumulate" rating for Wangfujing [1] Core Views - Q3 revenue decline has narrowed, and the company is expected to benefit from the tax-free policy by 2025 [8] - The company has actively laid out its tax-free business, which is anticipated to gain from the release of policy dividends [8] - The financial performance for Q3 shows a revenue of 2.35 billion yuan, down 4.7% year-on-year, and a net profit attributable to shareholders of 40 million yuan, down 68.2% year-on-year [8] Financial Forecasts - Total revenue projections for Wangfujing are as follows: - 2023A: 12,224 million yuan - 2024A: 11,372 million yuan - 2025E: 10,973 million yuan - 2026E: 11,557 million yuan - 2027E: 12,180 million yuan [1] - Net profit attributable to shareholders is forecasted as: - 2023A: 709.38 million yuan - 2024A: 268.58 million yuan - 2025E: 180.20 million yuan - 2026E: 428.22 million yuan - 2027E: 602.98 million yuan [1] - The report indicates a significant decrease in net profit margins, with a forecasted net profit margin of 1.8% for Q3, down 3.6 percentage points year-on-year [8] Market Data - The closing price of Wangfujing is 14.10 yuan, with a market capitalization of approximately 15.85 billion yuan [6] - The price-to-book ratio is reported at 0.81, indicating the stock is trading below its book value [6] Strategic Developments - The company has received approval for its tax-free operations and has launched several tax-free projects, including the Wangfujing International Tax-Free Port [8] - Recent policy changes have led to a 28.52% year-on-year increase in tax-free sales, indicating a positive trend in consumer spending [8]

Core Viewpoint - The development of the "first launch economy" is a key measure to boost consumption and expand domestic demand in China, as outlined in the "Special Action Plan to Boost Consumption" issued by the Central Committee of the Communist Party of China and the State Council in March 2023 [1][2]. Group 1: Policy Initiatives - The Ministry of Commerce is actively promoting the first launch economy through nationwide events, including the "National Boutique First Launch Season," aimed at stimulating new consumption momentum and releasing consumption potential [2]. - Various cities, such as Beijing and Tianjin, have introduced specific measures to support the first launch economy, focusing on creating a favorable environment for new consumption forms [3]. - Shanghai has implemented pilot measures for the inspection of imported consumer goods related to first launches, significantly improving customs efficiency [3]. Group 2: Economic Impact - The first launch economy has led to the emergence of new business formats and consumer experiences, contributing to economic growth. For instance, Beijing saw nearly 400 new first stores and around 200 first events from January to May 2023 [4]. - In Chengdu, the Spring Festival holiday attracted 3.39 million visitors, generating a tourism revenue of 5.63 billion yuan, reflecting the positive impact of the first launch economy on local tourism [4]. Group 3: Corporate Innovations - Retailers like Wangfujing are enhancing their first launch and first store strategies, integrating local cultural elements to create unique shopping experiences [7]. - Brands such as Pop Mart are expanding their first launch initiatives through themed pop-up events in multiple cities, indicating a trend towards experiential retail [7]. - The restaurant industry is also innovating, with Haidilao introducing a unique dining experience that combines barbecue with additional services, showcasing the trend of cross-industry collaboration [7]. Group 4: Future Outlook - The first launch economy is expected to continue evolving, driven by ongoing policy optimization and corporate innovation, leading to higher quality development in the consumption market [8].