Core view
Tracking the rise and fall of the sector: this week, the Shanghai Composite Index fell 0.11%, the Shenzhen Component Index fell 2.93% and the gem index fell 3.75% China Tourism Group Duty Free Corporation Limited(601888) fell 4.13% this week.
Industry data tracking: the passenger flow of Sanya epidemic airport was blocked, and the “goddess day” tax-free discount increased. From February 28 to March 5, five cases of covid-19 infection were diagnosed in Sanya. From 2 p.m. on March 3, CDF Sanya International duty-free City suspended business. On March 4, the official live broadcast online sales of CDF Sanya International duty-free City, with 173000 viewers and 7-75% discount on hot incense products in the live broadcast room.
On March 1, the number of inbound and outbound flights at Sanya Phoenix International Airport decreased to 255, with 35500 inbound and outbound passengers. There was a slight recovery on March 2, and the daily average passenger flow of Sanya airport this week decreased by about 30% compared with last week. From February 28 to March 2, the “goddess Festival” limited time rush purchase promotion was launched in the online mall of daily members, and most incense products were converted from 8% off two pieces to 7.5% off one piece.
Industry hot spots: China free group will organize more than 200 duty-free stores around the world to appear in 2022 consumer Expo. China tax exemption group will jointly host the “second global tax exemption and tourism retail conference” and the “sustainable consumption Summit Forum”. At the same time, it will organize more than 200 stores and professional procurement groups around the world to attend the meeting, negotiate and exchange with global brands and actively carry out procurement activities.
Investment suggestion: in the context of consumption return, China Tourism Group Duty Free Corporation Limited(601888) [ China Tourism Group Duty Free Corporation Limited(601888) . Sh] is the leader in the tax-free industry. With strong upstream procurement channels and obvious advantages in the scale of downstream stores, it is expected that the pattern of one super and many strong stores will be stable in the long term. The influence weight of China tax exemption on local outlying island duty-free industry and supply chain links is increasing. In the long run, the scale effect will increase, which will lead to the improvement of bargaining power and preferential policies in the supply chain. We estimate that the net profit attributable to the parent company in 2021, 2022 and 2023 will be RMB 9.592 billion, RMB 12.542 billion and RMB 16.903 billion respectively, corresponding to pe4.5 billion respectively 1/34.5/25.6X。
Risk warning: repeated epidemic situation; Promotion discount rate fluctuation; Changes in immigration policies.
