Event comments
According to Haikou customs, in the first quarter of 2022, the customs supervised 14.72 billion yuan of duty-free shopping on Hainan outlying islands, a year-on-year increase of 8.4%; The number of shopping pieces reached 20.27 million, a year-on-year increase of 14.2%; The per capita shopping amount was 8372 yuan, a year-on-year increase of 10.2%. Among them, the sales of cosmetics, jewelry and watches ranked among the top three. According to the official microblog of CDF Sanya international duty free city, phase I and phase II of CDF Sanya international duty free city resumed normal business from 14:00 p.m. on April 11.
The impact of the epidemic is severe, and the travel passenger flow and the operation of duty-free stores are affected. Since the first quarter of this year, affected by the scattered recurrence of the epidemic in some parts of the country and the severe situation of the epidemic in Shanghai and Jilin Province, travel restrictions have once again had a negative impact on the consumption scenes of tax-free, hotel, tourism and other industries. According to the travel data during the Qingming Festival holiday, the total number of passengers sent by railways, highways, waterways and civil aviation is expected to be 53.781 million, a year-on-year decrease of 62.7%; During the three-day Qingming Festival holiday, 75.419 million Chinese tourists visited the country, a year-on-year decrease of 26.2%, and recovered to 68.0% in the same period in 2019 according to comparable standards; China’s tourism revenue reached 18.78 billion yuan, a year-on-year decrease of 30.9%, recovering to 39.2% in the same period in 2019. The impact of the epidemic has also disturbed the normal operation of duty-free enterprise stores. On April 2, according to the official microblog of CDF Sanya international duty free city, phase I and phase II of CDF Sanya international duty free city were temporarily closed from 13:00 on April 2 according to the requirements of epidemic prevention and control. From 14:00 p.m. on April 11, phase I and phase II of CDF Sanya international duty free city resumed normal business. At 14:00 on March 3, CDF Sanya International duty-free city also suspended its business due to the epidemic situation in Hainan. April 2 was the second temporary closure due to the deployment of epidemic prevention and control since the beginning of this year. According to the passenger flow data of Hainan, as of April 10 at the beginning of this year, the cumulative number of inbound and outbound flights of Meilan Airport decreased by 7.33% year-on-year; The cumulative number of passengers transported by Meilan Airport decreased by 10.98% year-on-year; The cumulative number of inbound and outbound flights at Phoenix Airport decreased by 15.04% year-on-year. The epidemic situation has a significant impact on passenger flow in Hainan.
Under the impact of the epidemic, the tax exemption on outlying islands has increased significantly, reflecting the strong vitality of the tax exemption on outlying islands. It is expected that the epidemic situation will improve and the industry prosperity will accelerate recovery. Although the impact of the epidemic affected the normal operation of travel passenger flow and duty-free stores, the tax-free data of outlying islands in the first quarter still showed a bright growth in terms of shopping amount, number of shopping pieces and customer unit price. From the perspective of duty-free enterprises themselves, while strictly grasping the epidemic prevention and control, the 10 outlying island duty-free stores in Hainan have actively launched a series of consumption promotion activities to enhance the popularity of the outlying island duty-free market. Tax free enterprises and relevant departments in Hainan have joined hands to set up tax-free zones on outlying islands on the home page of the “Haiyi office” platform to improve the convenience of tax-free shopping. According to the data of this year’s Spring Festival, during this year’s Spring Festival (from January 31 to February 6), the sales of duty-free shops in Hainan outlying islands exceeded 2.1 billion yuan in seven days, with a year-on-year increase of more than 150%. At present, all duty-free enterprises have made efforts to expand their product categories and actively promote the upgrading of product structure. At the same time, the national tax exemption policy on outlying islands has been continuously relaxed. The rapid development trend of China’s outlying island duty-free industry is stable. From the data of the first quarter of this year, the visitor unit price has increased steadily, and there is still broad room for improvement and sufficient impetus in the future.
Investment advice
Under the severe situation of the epidemic, the first quarter data of tax exemption on Hainan outlying islands reflect the strong growth capacity of the tax exemption industry. The impact of the current epidemic on passenger flow and duty-free stores is still ongoing. However, we believe that the short-term impact will not change the long-term prosperity of the industry. Under the condition of national policy support + tax-free enterprises making efforts to improve service quality, rich product categories and price belt, with the gradual improvement of the epidemic situation, the industry as a whole is expected to accelerate recovery. Promising related targets: China Tourism Group Duty Free Corporation Limited(601888) .
Risk tips
Tip 1: repeated epidemic impact; Macroeconomic fluctuations; Policy fluctuation risk.
