CTG DUTY-FREE(SH:601888)2025-12-01 16:03Summary of Conference Call on Duty-Free Industry and China Duty-Free Group Industry Overview - The duty-free industry in China is experiencing a new growth phase, similar to the situations in 2020 and 2017, despite short-term economic challenges in China [1][2] - The overall trend remains positive, with stock market development and recovery in entrepreneur confidence being encouraging signals [1][2] Key Insights - K-Shaped Recovery: Consumer behavior is showing a K-shaped recovery, where high-income and low-end consumer groups are less affected. Government measures such as increased holidays and subsidies are promoting consumption [1][2] - Sales Performance: Since Q3 2025, duty-free sales in Hainan have gradually improved from a low base, significantly boosted by the launch of the iPhone 17 [1][3] - Tourism Demand Shift: Southeast Asian tourism demand is shifting to Hainan due to events like the Thailand fraud incident and tensions in Sino-Japanese relations, which is expected to enhance tourism and duty-free demand in Hainan [3] - Luxury Goods Demand: There is an increase in demand for luxury goods, particularly among high-income groups, with a notable rise in the sales proportion of premium products since July [3] Company-Specific Insights - China Duty-Free Group (CDFG): CDFG is maintaining a strong position in the high-end consumer market, with top-tier properties in Sanya and Haikou. The LV store in Haitang Bay is noted as the best-selling LV store in China, showcasing CDFG's strong brand attraction and leasing capabilities [1][4] - Market Position: CDFG's market share and sales are on the rise, while other duty-free operators in Hainan, such as Shen免, Hai旅, and 中出服, are losing competitive edge in the cosmetics sector [2][5] Future Outlook - Optimistic Projections: The outlook for Hainan and airport duty-free stores is optimistic, with expectations of a full recovery across the duty-free industry chain if consumer policies are effectively implemented [6] - Competitive Landscape: CDFG is expected to maintain its leading position in the market, especially in airport bidding processes, due to its historical advantages [6] - Investment Opportunities: It is considered a good time for investors to focus on the duty-free sector, particularly on leading companies like CDFG and Wangfujing, as the luxury segment is beginning to recover [8] Additional Considerations - Policy Support: New policies allowing unlimited use of a 100,000 yuan duty-free quota for island residents are anticipated to boost consumption during the New Year and Spring Festival [3] - Investment Strategy: While Wangfujing may offer short-term opportunities, CDFG is viewed as having a more stable market position and higher probability of success in the long run [7][8]