＜Research＞Daiwa: Hainan Duty-free Sales Not Expected to Turnaround; Beijing Airport Preferred

　　The share prices of the duty-free sector surged in recent days due to increasing discussions on consumption tax reform, as the central government emphasized its tax system reform plan last week, Daiwa released a research report saying.

　　Weak consumption remains an obvious problem, Daiwa said. In 5M24, Hainan duty-free sales fell 30% YoY, while per capita spending dropped 22% to RMB5,630. Per capita spending has been on a downtrend since the end of 2022, reflecting weaker spending power.

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　　Despite the widening price gap, it is believed that the policy reform will not reverse the weak Hainan duty-free sales. However, the recovery potential of airport duty-free sales is expected to be higher due to the lower average consumption level.

　　Daiwa believed that consumption tax reform will boost investment sentiment in the duty-free sector, supporting CTG DUTY-FREE (01880.HK) -2.450 (-4.554%) Short selling $52.30M; Ratio 10.407% (601888.SH) -2.900 (-4.266%) in the short term, but remained cautious on consumption weakness. Therefore, Daiwa preferred BEIJING AIRPORT (00694.HK) +0.100 (+3.704%) Short selling $4.45M; Ratio 16.176% , with rating at Buy.

　　(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-07-03 16:25.) (A Shares quote is delayed for at least 15 mins.)

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