Core ideas of this week:
The annual target of tax exemption for outlying islands has been completed and is expected to continue in 2022. In 2021, Hainan achieved a total tax-free sales of 60.173 billion yuan, a year-on-year increase of 84%, and achieved the previously set target of 60 billion yuan. Among them, the tax-free sales volume was 50.49 billion yuan, and the number of tax-free purchases was 53.4925 million, with a year-on-year increase of + 83% and + 71% respectively. The tax-free sales of outlying islands in Q4 reached 14.94 billion yuan in 21 years, a year-on-year increase of + 31.28%. Under the condition of serious epidemic in many scattered places in China, the tax-free sales of outlying islands still achieved a relatively rapid growth, and the policy dividend continued to be released. During the three-day New Year’s Day holiday in 2022, the total amount of duty-free shopping on outlying islands was 600 million yuan, with a year-on-year increase of + 9.7%, and the growth rate slowed down slightly, but the per capita consumption was 9740 yuan, with a year-on-year increase of + 12%, which continued to rise compared with 2021. Hainan Province has proposed to occupy 10% of China’s tax-free consumption quota in 2022, that is, the target of 100 billion yuan. We believe that under the background that the short-term global epidemic can not be completely controlled, the tax exemption on outlying islands is still an important window to attract the return of consumption; In the long run, with improved infrastructure and superimposed policy support, the capacity of operators continues to improve, and the attraction of tax exemption on outlying islands is expected to continue to increase.
Many overseas countries have taken many measures to promote the recovery of the duty-free industry, which puts forward higher requirements for the operation capacity of Chinese duty-free merchants. The Korean government proposes to cancel the upper limit of $5000 (5.97 million won) for outbound nationals to shop in Korean duty-free stores from March 1, 2022, encourage Korean residents to buy duty-free goods and bring them abroad, and hope to attract overseas luxury consumption back. The move aims to help the tax-free industry greatly affected by the epidemic recover, stimulate Chinese consumption and attract the return of consumption. In addition, in the three-day promotional activities for the 38th anniversary of December, Dubai duty-free stores realized sales of nearly 24 million US dollars, a year-on-year increase of 24.5%; The sales of Dubai duty-free stores in 2021 reached US $976 million, an increase of 40% year-on-year. At the same time, it also set a sales target of US $1.4 billion in 2022. Although we believe that it will take 2-3 years for the overseas duty-free industry to recover before the epidemic, the measures taken by many countries to vigorously promote the recovery of the duty-free industry also put forward higher requirements for China’s duty-free operators. Only by enriching the brand matrix, improving the supply chain system and improving the operation efficiency can we enhance our competitiveness in the international duty-free market.
China’s duty-free operators continue to promote business results and consolidate their competitive advantages. On the first day of the new year’s Day holiday in 22, Haikong global boutique duty-free city officially launched the wechat applet for members to buy, which is a blessing for duty-free sales on outlying islands. On December 31, 2001, China free Macau shanglisboa store opened, which is the first flagship store of China free Macau, covering an area of about 7500 m2 and gathering about 170 international well-known brands. China Tourism Group Duty Free Corporation Limited(601888) in recent years, the company has continuously expanded its international business around the Asia Pacific region. The opening of shanglisboa store in Macao is a new step for the company to expand Dawan district. In the future, it is expected to continue to make efforts in overseas expansion and further enhance its competitiveness in the international duty-free market.
Industry recovery: the Shanghai Composite Index closed at 3579.54, up or down – 1.65% in the week; The Shenzhen composite index closed at 14343.65, up or down – 3.46% in the week; Shenwan social service index closed at 10945.94, up or down – 0.86% in the week; Shenwan retail trade index closed at 3010.94, up or down – 2.40% in the week. Shenwan beauty care index closed at 7253.74, up or down – 5.41% in the week. Judging from the weekly growth and decline of Shenwan secondary sub section, the top three were tourism and scenic spots (3.65%), jewelry (2.08%), trade II (1.58%), and the last three were professional chain II (- 7.25%), cosmetics (- 3.95%) and professional services (- 3.40%).
Key reports focus on:
China Tourism Group Duty Free Corporation Limited(601888) : the short-term performance is disturbed by the epidemic, and the long-term space for tax-free leaders is broad, October 31, 2021
Cosmetics industry: how to build a century old enterprise for domestic Aromatherapy 2020-12-04
Hotel Industry: what is the growth space for medium and high-end hotels under the rapid expansion 2021-01-04
Higher education industry: analysis of investment opportunities of private universities from four dimensions 2020-11-17
Follow the history: embrace flexible employment, scale and technology are the core of future competition
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Key recommendations: China Tourism Group Duty Free Corporation Limited(601888) , Btg Hotels (Group) Co.Ltd(600258) , Shanghai Jin Jiang International Hotels Co.Ltd(600754) , Shanghai Yuyuan Tourist Mart (Group) Co.Ltd(600655) , Beijing Career International Co.Ltd(300662)
Long term recommendation: Offcn Education Technology Co.Ltd(002607) , Guangzhou Restaurant Group Company Limited(603043) , Lao Feng Xiang Co.Ltd(600612) , Chow Tai Seng Jewellery Company Limited(002867) , Proya Cosmetics Co.Ltd(603605) , Shanghai Jahwa United Co.Ltd(600315)
Risk tip: the epidemic situation rebounded in some areas, and the economic recovery was less than expected and exceeded the expected policy.
