HK Stock Market Move | China Tourism Group Duty Free Corporation (01880) rose by more than 6% with the boost in consumption from a special study on Hainan. The sales decline of duty-free goods on the outlying islands narrowed in the first two months.

China Tourism Group Duty Free Corporation (01880) rose more than 6%, with a 6.08% increase to HK$46.25 as of the time of writing, with a trading volume of HK$167 million. On the news front, on April 7th, the Hainan Provincial Government held a special meeting to discuss actions to boost and expand consumption. The meeting pointed out that on the demand side, it is necessary to increase residents' income through multiple channels to enhance residents' consumption capacity and confidence by continuously improving their living standards. It is also important to tap into the potential of consumer groups such as "Generation Z" and the elderly, and to attract international tourists to drive consumption in Hainan faster and more stably. Guosen's recent research report suggested that, looking ahead, on the one hand, with the positive policy stimulus, it is advisable to track overall consumption levels, especially the recovery pace in Hainan. In the first two months of this year, the tax-free sales at Haikou Customs in Hainan decreased by 13% year-on-year, narrowing from a 22% decline in the previous quarter, and the sustainability of the subsequent marginal improvement trend still needs to be observed. On the other hand, the coexistence of risks and opportunities in the operation of closing off Hainan by the end of 2025, it is recommended to continue tracking the progress of closing off Hainan. However, China Duty Free has the first-mover advantage in the core area commercial layout and has consolidated its leading position through continuous investment in the past two years. In addition, since the announcement of the new policy for domestic duty-free shops last year, the company has won bids for the operation rights of duty-free shops in 6 cities, with the expectation that its 7 existing duty-free shops and the 12 affiliated shops will gradually convert and open for business. Considering that China Duty Free and affiliated shops have already secured a leading position in key cities for international passenger flows, the domestic duty-free space corresponding to these cities is even broader, and China Duty Free is expected to directly share the benefits of the new domestic duty-free policy.