The tax-free concept in the A-share market continues to be popular。June 29，Hainan Islands Duty Free Detailed Rules Released，Early trading on June 30th，Tax-free concept collective carnival，Caesar Travel、Wangfujing、China Free、HNA Basics and other stocks hit their daily limit。

Among them，China Free Trade Zone has reached daily limit for 2 consecutive trading days，The total market value exceeded 300 billion yuan，The stock price hits a new high since listing。Before this，Wangfujing has increased by more than 270% in two months，Gree Real Estate has achieved 8 consecutive daily limits...even departure tax rebate concept stocks were once followed the trend，Maoye Business、Hangzhou Jiebai、Hefei Department Store and others are sought after by short-term funds。

But，The consumer base of the duty-free industry is limited after all，Under the speculation in the secondary market，Investors should think more rationally，The current scale of the duty-free industry？Can the future growth rate meet expectations under the impact of the epidemic？How much can related companies benefit from tax exemption or departure tax refund business？

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Public data display，China’s duty-free industry sales reached 39.5 billion yuan in 2018，Growth rate reaches 27.3%。Currently，No authoritative organization has given specific information on the scale of China’s duty-free market in 2019，However, some brokerage analysts estimated in a research report that China’s duty-free market will be 48.5 billion yuan in 2019，Growth 22.8%。More analysts predict，2019 to 2022，The scale of China’s duty-free industry will further grow to 88.5 billion yuan based on 39.5 billion yuan in 2018，The compound growth rate is 22%。

Judging from the forecasts of optimistic analysts，China’s duty-free industry is expected to reach a scale of 100 billion，The basis is mainly based on two points: First, China’s duty-free scale accounts for a relatively low proportion in the world，Does not match the outbound travel situation；Second, strong support from national policies，Overseas consumption is expected to return。

Objectively speaking，China’s duty-free sales growth rate is indeed significantly higher than the global level。China’s duty-free industry is growing rapidly，But the global share is still low。Calculated based on 2018 data，China’s duty-free market only accounts for about 8% of the global duty-free market，In the same period, China’s outbound tourist arrivals and outbound travel consumption accounted for 10% and 18% of the world’s total。That’s why，Many analysts believe that China’s duty-free industry has huge growth potential。

But，China’s duty-free industry in the next three years wants to maintain an industry growth rate of more than 20% as in the previous two years，More challenging。

The state implements franchising of duty-free shops，Therefore，Duty-free shops are not a mainstream consumption scenario，The customer is a specific entry and 188bet online sports betting exit、Travellers from outlying islands，Limited number of groups。Secondly，There are strict limits on the amount and number of items for tax-free consumption，The consumption amount of a single customer is greatly affected by the policy，It will take some time for the policy to be relaxed and implemented，Restricting the growth space of the industry。Third，Affected by overseas epidemic，Normal international navigation has not yet resumed，The number of inbound and outbound passengers has plummeted。

Display of the tax exemption policy announced on the official website of China Duty Free Group，Port entry duty-free shops are applicable to passengers who have not yet completed customs entry procedures，Total amount including overseas duty-free shopping shall not exceed 8,000 yuan。Sanya International Duty Free City Official Online Mall Display of China Duty Free Group，Consumers must be over 16 years old，By plane、Domestic passengers who leave Hainan Island by train or ship but do not leave the country，The annual purchase limit for products with a unit price of less than 8,000 yuan is 30,000 yuan，Limited purchase of 2 items per year for products with a unit price of more than 8,000 yuan。Hainan’s tax exemption policy will be relaxed，But the approval and construction of duty-free shops will also take time after landing。

The impact of the epidemic on the duty-free industry cannot be underestimated，We can learn a thing or two from China’s exemption situation。March 20，China Duty Free said in response to investors’ questions，Due to the impact of the epidemic，The operation of the company’s domestic and overseas duty-free shops has been affected to a certain extent。June 12，China Duty Free said again，Affected by the epidemic at home and abroad，The company’s operations have been affected to a certain extent，The company actively responds，Develop an online business improvement plan based on your own business characteristics，Rapidly promote the integration of the company’s online and offline businesses，Work hard to promote the company’s tax-free business upgrade。

First quarter of this year，China Duty Free Revenue 7.6 billion yuan，Down 44% year-on-year；Net profit-1.200 million yuan，From profit to loss。China Duty Free said in its first quarter report，Affected by the new coronavirus epidemic，The number of customers in the company’s duty-free stores dropped significantly year-on-year，Some duty-free shops have closed or adjusted their business hours，This will have a greater impact on the company’s normal operations。

The licensing pattern may change

The duty-free industry is an important branch of the tourism industry，Since outbound travel has been severely affected by the COVID-19 epidemic this year，Local governments continue to introduce tax-free policies to stimulate consumption。

China’s duty-free market is a typical oligopoly structure，The leading duty-free operators in the country are: China Duty Free (Group) Co., Ltd. (China Duty Free Group)、Rishang Duty Free (Group) Co., Ltd.、Shenzhen State-owned Duty Free Commodities (Group) Co., Ltd. (Shenzhen Duty Free Group)、Zhuhai Duty Free Enterprise Group Co., Ltd. (Zhuhai Duty Free Group)、Hainan Duty Free Co., Ltd. (Hainan Duty Free Company) and China Overseas Service Corporation (China Service) and China Travel Service Hong Kong，Higher license barriers。

As of now，The 8 tax-free licenses issued belong to 5 companies 188bet app in total。Among them，China Free、日上、Chinese overseas Chinese are exempted、Haifu Duty Free is both a “China Travel Department” duty-free brand，The Chinese server was deeply bound by Caesar Travel、Zhufu also fell into the arms of Gree Real Estate not long ago。

With the acquisition of 51% of the shares of Sunshine by China Duty Free Corporation，And 51% equity of Shanghai Duty Free，China Duty Free’s largest competitor in the departure duty free and offshore island duty free markets was annexed，CDF has obvious advantages in operating licenses and store numbers in China，Forming a “dominated company” in the tax-free field。

China Duty Free has already won the bid for the tobacco and alcohol section of Hong Kong Airport, China、Capital Airport、Baiyun Airport、Macau Airport、Shanghai Airport Duty Free and other domestic airport port duty free shops，means China’s duty-free industry is integrating on the supply side，means China’s duty-free industry is integrating on the supply side，After the acquisition of Haifui，China Duty Free will not only firmly occupy the two major outlying island duty free markets of Sanya and Haikou，It also increased its market share in the entire China duty-free market from 87% to 93% (estimated based on 2018 data)。In order to highlight the main business of tax exemption，China International Travel Service officially changed its name to China Duty Free on June 29th。It can be said，The duty-free industry pattern is limited competition under monopoly。

Since this year，The state attaches great importance to the construction of tax-free channels，From adding tax exemption license，The layout of setting up offshore island tax-free pilots and expanding the tax-free sales industry，Promulgate various policies and measures to encourage and support the development of the duty-free sales industry，The scale of my country’s duty-free market has therefore expanded rapidly，The pattern of domestic duty-free industry has also undergone new changes。

Looking at the current situation in various places，Beijing is accelerating the implementation of the national duty-free shop innovation policy，Optimize ports、Layout of duty-free shops in the city；Shanghai supports duty-free goods operating companies to add duty-free shops in the city；Guangzhou is also actively seeking policy breakthroughs to establish duty-free shops in the city。

Duty-free consumption comes to the forefront

Recently，Henan’s first city duty-free shop - Zhongfu Duty Free Zhengzhou store officially opened。June 10，Announcement issued by Wangfujing Group Co., Ltd.，Announced that the company has obtained the qualification to operate duty-free goods，Announcement of the official birth of the eighth domestic tax-free license。

A brokerage analyst previously pointed out，In the long run，Wangfujing’s duty-free license is expected to participate in Beijing Airport’s duty-free，In other words, the market shares of Wangfujing and China Duty Free will change by then。

June 30，Hainan tax-free policy officially launched，All business entities with duty-free product distribution qualifications can equally participate in duty-free operations on Hainan outlying islands。Attracted by this tempting big cake，Recently, many companies are planning to enter the duty-free industry。

2019，Caesar Travel began to try to enter the duty-free market，Tongsheng Duty Free, a tax-free 188bet online sports betting business management platform, was established in Haikou，And previously reached cooperation with China Overseas Personnel Service Co., Ltd. (hereinafter referred to as "China Overseas Service")、Invested in the entry duty-free shop at Tianjin International Cruise Home Port to enter the duty-free field，And acquired 20% equity of Jiangsu Duty Free Company。2020，Caesar Travel has moved its registered address to Sanya, Hainan，And introduced strategic investment from Sanya Development Holdings Co., Ltd., a wholly state-owned enterprise of the Sanya Municipal Government。

February 2020，Uxin Travel also announced the signing of a strategic cooperation agreement with China Duty Free Group, a subsidiary of China Duty Free Group，Indicated that they will jointly develop domestic and overseas travel retail markets。

April 2020，Ctrip Group and Sanya Tourism Group signed a strategic cooperation agreement，Fosun Tourism Group also said it will set up a regional headquarters in Sanya，Preparation to establish Shanghai Fosun Tourism Group Sanya Company，They are increasing their investment in Hainan。Analysts pointed out，We do not rule out the possibility of the above-mentioned enterprises participating in Hainan Islands Duty Free in an orderly manner。

Can see，With the increase of tax-free enterprises，On the one hand, the moat effect of tax-free licenses is gradually weakening；On the other hand，Competition among tax-free companies will become more intense，The future competition in the duty-free market will not only come from domestic，It comes from all over the world。

Since June，With the introduction of Hainan’s tax-free policy，Hainan Province is also actively contacting international duty-free retail giants。Planned to introduce to Hainan。The first day after the overall plan for the construction of Hainan Free Trade Port was announced，Hainan Provincial Party Committee Secretary Liu Cigui had a video connection with the world's largest airport duty-free merchant Dufresne Group，Promote practical cooperation in related fields。As understood，Dufry Group has operations in 65 countries around the world，Sales in 2019 reached 88.CHF 500 million，The world’s No. 1 duty-free group。

As more and more companies enter the tax-free field，The outside world once questioned whether the value of the duty-free license would be diluted。A brokerage analyst told reporters，“Previously, Korea’s duty-free licenses also increased，But the leader is still the leader，It’s not just about the value of the license plate，The key point still depends on the actual operating conditions of the duty-free shop，Can these companies work together to make the tax-free pie bigger?，Instead of ‘blowing’。”

Hot money gathers to follow the trend and speculate

Wangfujing, one of the leading tax-free concept stocks，There was a licensing dispute，Fell into suspicion of insider trading。Even if the company urgently clarifies，Still unable to completely dispel market concerns。Another leading tax-free concept stock is Gree Real Estate，The asset purchase price in the previous restructuring plan was 4.3 yuan/share，The stock price in the secondary market reached the highest level of 13.84 yuan/share，The company’s latest total market value is 23.9 billion yuan。After Wangfujing obtained the tax-free license，Bailian shares, a listed retail company owned by Shanghai state-owned assets, also rose sharply。

When Wangfujing was under suspicion of insider trading，188bet app Liu Zhangming, chief retail analyst of Tianfeng Securities, said in an interview with a reporter from Securities Times·e Company，How much tax-free business can promote the company’s future performance growth，Need time to observe。“Our team looks at the duty-free industry，Also read business，It took 5 years for the market value of China National Travel Service (i.e., China Duty Free) to grow，Wangfujing takes time，It’s still unclear what is the reason for this unusual increase，After the epidemic, all consumer stocks have risen very well。" Liu Zhangming said，“After obtaining the license, opening a store still requires approval，After approval, I don’t know how big the store can be，It will take at least one or two years to complete，The current hype is a bit too crazy。”

Wangfujing was on June 2nd、On June 10th and June 12th three times on the Dragon and Tiger list，Exclusive seats for Shanghai-Hong Kong Stock Connect are actively trading，Big buys and sells。Well-known hot money seats are also quite active in Wangfujing，CICC Beijing Jianguomenwai Street Sales Department bought 2272 on June 2.320,000 yuan，Guotai Junan Shanghai Jiangsu Road Sales Department bought 6858 from June 8th to June 10th.440,000 yuan，CITIC Securities Shanghai Branch、Industrial Securities Shaanxi Branch、CICC Fortune Nanjing Taiping South Road Sales Department、Huatai Securities Shenzhen Yitian Road Rongchao Business Center Sales Department and multiple institutional seats participated。

Gree Real Estate has been on the Dragon and Tiger list 5 times since the end of May。Guosheng Securities Ningbo Sangtian Road Sales Department bought 26.84 million yuan on May 29，Huaxin Securities Nanchang Hongguzhong Avenue Sales Department、Huaxin Securities Shanghai Maotai Road Sales Department bought a total of 75 million yuan from May 28 to June 1。Gree Real Estate’s June 4th Dragon and Tiger List has many well-known hot money seats，June 2~4，Guotai Junan Shanghai Jiangsu Road Sales Department Buy 3.3.1 billion yuan，Shenwan Hongyuan Shanghai Minhang District Dongchuan Road Sales Department Buy 2.6.5 billion yuan，Huatai Securities Shanghai Putuo District Jiangning Road Sales Department Buy 2.2.2 billion yuan。

Short-term performance impact is limited

After the epidemic，The biggest good news for the duty-free industry is that the duty-free shopping limit on Hainan’s outlying islands has been increased from 30,000 yuan per person per year to 100,000 yuan，And further expand the types of duty-free goods based on the current 38 categories of goods。

This reporter discovered when he visited two duty-free shops in Haikou and Sanya in early June，Passenger flow has recovered significantly。In the largest duty-free store in Riyue Plaza in Haikou，Consumers come in an endless stream，Many people come from Northeast China and other places to travel and shop，And bluntly said that the prices of duty-free products are more discounted and more favorable than those in Hong Kong duty-free shops。Sanya International Duty Free City is even more crowded，Not only that，Hotels around the duty-free city are all full on weekends，The flow of people is not inferior to that of the tourist season。

Multiple positive blessings，Recently, tax-free related concept stocks have been on the rise。The industry agrees，Recently, the secondary market has been chasing the tax-free sector，In addition to the good expectations for the future of the duty-free industry，It also further reflects 188bet Online Sports Betting and Casino the scarcity of tax-free licenses。

It’s worth noting，Among the companies involved in the tax-free field，Except China Free Shipping，The business scope of other listed companies holding tax-free licenses is not limited to tax-free。

For example，Gree Real Estate has reached the 8-day limit due to its acquisition of Zhudu District，But the company’s main business is still real estate，And the market share of Zhuhai Duty Free is only a fraction of China Duty Free。Gree Real Estate Representation，After the reorganization of Zhumeng is completed，The duty-free business and the company’s existing consumer sector business can complement each other，Good for business and brand promotion，Linkage to create a complementary large consumer business featuring duty-free business。

Many analysts pointed out that Gree Real Estate’s acquisition “was not intended to be tax-free”。Zhou Mingqi, founder of Jingjian Think Tank, previously stated to the media，On the one hand，Advantages of purchasing channels through Zhuwu，Gree Real Estate can further open up its large consumer sector，Strengthen taxable goods business，This will also allow it to acquire land for commercial real estate projects in the future、Have greater advantages in business，Add more chips；On the other hand，Having the “geographical advantage” of Hengqin International Leisure and Tourism Island，With the help of Zhumeng Gree Real Estate, you will more fully enjoy the policies and tourism consumption dividends brought by the Guangdong-Hong Kong-Macao Greater Bay Area，There is still considerable room for imagination。

After Wangfujing obtained the tax-free license，The most optimistic estimate given by securities companies is that tax-free operating income will account for 50% by 2024。In the short term，The company has not yet started substantial tax-free business，Therefore, the tax-free business has less impact on the company’s performance。

“From the perspective of form, my country’s tax exemption mainly includes entry, exit and departure tax exemption，Two aspects of tax exemption on outlying islands，The first category is mainly for people entering and leaving the country，The first category is for people leaving the island。This determines that the number of people who can access tax exemptions is limited。The industry prospects are good，But the market size may be exaggerated，You need to be cautious when investing。" Hu Xinyin, senior business manager of Shenwan Hongyuan, told reporters。

Zhou Maohua, an analyst at the Financial Market Department of China Everbright Bank, told a reporter from Securities Times·e Company，The duty-free sector has surged because the current market logic is still in consumption and technology，Loose mobility environment，The economic recovery, consumption rebound and the catalysis of policies have prompted capital to be optimistic，But the current stock price trend and performance development forecast are divergent，Investors should be wary of speculation risks。

*Source of this article:Securities Daily, authors: Yu Dejiang, Zhang Qianyao , original title：《There are variables in the license plate pattern. The cake of the duty-free industry must be made bigger rather than "exaggerating"》.