Duty-free concept stocks continue to be hot

　　On July 2nd, A shares were in a hot weather, and the Shanghai Composite Index rose 2.13%. Among them, the duty-free shop index rose first, up 4.85%. Since June, the index has risen by about 29%.

　　On the same day, the tax-free concept stocks Gree Real Estate, Caesars Tourism and Wangfujing all had daily limits. Shanghai Airport, Baiyun Airport, Shenzhen Airport and Zhongxin Tourism all rose.

　　Since June, Wangfujing's share price has more than doubled, rising by about 130%; China Central Free has risen by about 64%.

　　Driven by favorable factors such as the implementation of relevant policies of the Hainan Free Trade Port, tax-free concept stocks continued to rise.

　　Listed companies grab tax-free business

　　Behind the hot market, tax-exempt licenses are not easy to get.

　　With the implementation of relevant new policies, more and more enterprises have joined the competition in the tax-free market. It is understood that at present China Zhongwai (formerly China International Travel Service), Hainan Duty Free Co., Ltd. (hereinafter referred to as Haiwai), Zhuhai Duty Free Enterprise Group Co., Ltd. (hereinafter referred to as Zhuhai), and China Overseas Personnel Service Co., Ltd. (hereinafter referred to as China) 8 companies including Wangfujing and Wangfujing are qualified to sell duty-free products. However, other companies have also entered the tax-free market by cooperating with these eight companies.

　　A reporter from China Economic Weekly learned from Caesars Travel on July 2 that Hainan Tongsheng Sega Duty Free Group Co., Ltd. (hereinafter referred to as Tongsheng Duty Free), a subsidiary of Caesars Tourism, introduced Shanghai Licheng Asset Management Co., Ltd. (hereinafter referred to as Shanghai Li Cheng) Increased capital by 100 million yuan and deployed Hainan’s tax-free business. After the completion of this capital increase, Shanghai Licheng will hold a 20% stake in Tongsheng Duty Free. This is also the Caesars Travel Industry once again received a capital increase from Shanghai.

　　Shanghai Licheng has been investing in the cultural tourism industry for a long time, and has successively invested in Songcheng Performing Arts, Sanxiang Impression, Jinzhang Culture, Yongle Culture, Jinjiang Hotel and other enterprises in different stages and sub-fields, with an asset management scale of about 8.5 billion yuan.

　　Tongsheng Duty Free is a tax-free business management platform under Caesars Tourism, and jointly launched the "Tianjin International Cruise Home Port Entry Duty Free Shop" with Zhongde Service. It invested in the acquisition of 20% equity of Jiangsu Zhongfu Duty Free Co., Ltd. Duty-free shops operate companies.

　　Not only Caesars Tourism, Wangfujing and many other listed companies have made important breakthroughs or layouts in the tax-free business. The most striking is the tax-free industry upstart Wangfujing. Wangfujing issued an announcement on June 10, disclosing that it has obtained the qualification for operating duty-free products. The company's stock price has doubled in the past month.

　　Prior to this, on May 7, China Zhongfang announced that it was planning to acquire the 51% Haifang shares held by its controlling shareholder China Tourism Group for 2.065 billion yuan. Prior to this, both China and Shanghai Free have been granted tax-free distribution for Hainan Islands.

　　Interestingly, the China Central Freedom was renamed from China National Travel Service. On June 29, China National Travel announced that it officially changed the name of the stock to China Exemption and clearly focused on the direction of the development of tax-free business.

　　After the merger of China Free and Shanghai Free, all four Hainan Islands Duty Free shops currently in stock, including Meilan Airport Duty Free Shop, Sun Moon Plaza Duty Free Shop, Boao Duty Free Shop, and Sanya Haitang Bay Duty Free Shop. Brokerage research data shows that the total revenue of the four stores in 2019 exceeded 13.5 billion yuan.

　　On May 11, Gree Real Estate announced that it plans to acquire a 100% stake in Zhudian. What attracts attention to this action is that after the acquisition is completed, Gree Real Estate will formally obtain a tax-exempt license and inject it into related businesses. Gree Real Estate's stock price once surged due to this good news. It even pulled 8 daily limit boards and was even questioned by the Shanghai Stock Exchange.

　　Islands tax exemption policy is further relaxed

　　Behind the frequent actions of listed companies is the continuous improvement of related policies.

　　On June 29, the Ministry of Finance, the General Administration of Customs, and the State Administration of Taxation jointly issued the "Announcement on Tax-Free Shopping Policies for Hainan Islands Travelers" (hereinafter referred to as "Announcement"), which will be implemented from July 1, 2020. The "Announcement" clarifies that the value-added tax-free shopping quota per person per year for outlying island passengers is 100,000 yuan, and unlimited times; the variety of duty-free products has been expanded from 38 items to 45 items; except for cosmetics, mobile phones and alcohol products There is no limit to the number of purchases outside, and the number of cosmetic purchases has also been increased from 12 to 30, and the number of perfumes is not limited. Encouraging moderate competition, business entities qualified for the distribution of duty-free goods can participate in the duty-free operation of Hainan Islands as required.

　　Industry insiders said that the island tax exemption policy has ushered in many adjustments in recent years, which also reflects my country's willingness to guide the return of consumption by making the tax exemption industry bigger and stronger.

　　The New Times Securities Research Report shows that with the relaxation of the island tax exemption policy and the increased motivation for tax-free consumption by the Chinese, the scale of Hainan island island tax exemption is expected to increase significantly, and it is expected to reach 60 billion yuan in 2022. In 2019, Hainan's province's tax-free sales were 13.6 billion yuan, a year-on-year increase of 35%. The province's tax-free shopping trips were 3.84 million, a year-on-year increase of 33%; the customer unit price was 3542 yuan per person, a year-on-year increase of 2%.

　　Soochow Securities analysis believes that the traditional offshore island tax exemption mainly uses middle-end fragrance products as the main sales force, and after the exemption of the single-product tax exemption limit, high-end boutique department stores with high unit prices and high profit margins such as bags and watches will greatly benefit and quickly open. Sales space, thus accelerating the upgrading of the structure of tax-free products on outlying islands, upgrading to high-end, high-margin products, and improving the overall profitability level. At the same time, the newly added 7 types of duty-free commodities such as electronic consumer products and alcohol will further stimulate consumer demand, which will help to improve the product matrix, expand the target audience, and further open up market space.

　　Soochow Securities stated that with the significant first-mover advantage gained through long-term deep cultivation in Hainan's tax-free market, the high-quality tax-free positions of China Free and Hai Free have been successfully secured, and the leading position of tax-free will be further consolidated. Both powers are expected to enjoy the tax-free incremental dividends for outlying islands.

　　"China Economic Weekly" reporter Li Huimin | Beijing report