On March 27, China Duty Free Group (SH.601888), announced its full-year performance for 2023. During the reporting period, the company continued to focus on its duty-free core business, achieving revenue of RMB 67.54 billion, a year-on-year increase of 24.1%; and a net profit attributable to the parent company of RMB 6.71 billion, a year-on-year increase of 33.5%.
Regionally, “Hainan” remains the operational core of China Duty Free, with revenues in the Hainan region increasing by 14.3% year-on-year to RMB 39.65 billion, contributing 58.7% of the company’s revenue; followed by “Shanghai,” with a year-on-year revenue increase of 26.0% to RMB 17.82 billion, contributing 26.4% of the company’s revenue.
As of the close of March 28, the company’s stock price had risen by 3.61% to RMB 86.18 per share, with a total market value of approximately RMB 178.3 billion.
In 2023, tourism in Hainan fully recovered. According to statistics from the Hainan Provincial Department of Tourism, Culture, Radio, Television and Sports, in 2023, Hainan Province received a total of 90.062 million visitors, a year-on-year increase of 49.9%; and achieved a total tourism revenue of RMB 181.309 billion, a year-on-year increase of 71.9%.
The recovery of tourism in Hainan also drove a rebound in consumption. According to data from the “2024 Report on the Work of the Hainan Provincial Government,” in 2023, the sales volume of 12 offshore duty-free shops was RMB 58.09 billion, a year-on-year increase of 19.3%. Data from Haikou Customs shows that in 2023, Haikou Customs supervised a total offshore duty-free shopping amount of RMB 43.76 billion in Hainan, a year-on-year increase of 25.4%; the number of shoppers was 6.756 million, a year-on-year increase of 59.9%; the number of items purchased was 51.3 million, a year-on-year increase of 3.8%, with an average spending amount of RMB 6478 per person.
It is evident that offshore duty-free shopping remains the “golden signboard” of tourism consumption in Hainan. Currently, there are 6 offshore duty-free operators and 12 stores in Hainan. After experiencing a market downturn in 2022, the offshore duty-free market continued to recover in 2023, with annual sales of offshore duty-free shops recovering to more than 90% of the 2021 level.
China Duty Free has established around 200 duty-free shops in more than 30 provinces, cities, autonomous regions, special administrative regions, and countries such as Cambodia, covering nine types including airports, onboard, border, ship supply, passenger terminals, train stations, diplomatic personnel, cruises, and downtown. The company covers more than 100 cities and has become the world’s most comprehensive duty-free operator with the most retail outlets in a single country. The company owns 6 offshore duty-free shops in Hainan Province, including the world’s largest and second-largest duty-free complexes—Haikou International Duty-Free City and Sanya International Duty-Free City.
During the reporting period, China Duty Free solidified its “Deeply Cultivate Hainan” strategy, with several projects making their debut:
- Launched the “S Store” (Super Service) project, benchmarking against first-line brand operation and service standards, with 14 pilot “S Store” outlets achieving a year-on-year sales increase of 65%;
- The second phase of the Sanya Phoenix Airport Duty-Free Shop opened, serving as a standalone duty-free shopping complex in the airport isolation area, covering a wide range of categories including watches, jewelry, fragrances, and electronics;
- The global beauty plaza in Zone C of Sanya International Duty-Free City began operations, operating exclusively in the fragrance category, bringing together flagship stores of core brands such as Chanel, Dior, Estee Lauder, and Lancome on two floors, and focusing on creating Hainan’s first collection-style SPA center, providing a new consumption scene for Hainan offshore duty-free;
- The second phase of Sanya International Duty-Free City’s Yunjie Island (formerly Hexin Island) was upgraded, welcoming top luxury brands like Louis Vuitton and Dior, as well as more than 30 international high-end brands such as Buccellati, Celine, Loro Piana, and Qeelin.
The construction of comprehensive complexes by China Duty Free in Hainan is also accelerating:
- The commercial part of Phase 1, Plot 2 of Sanya International Duty-Free City has been opened for operation, with the hotel part progressing on the above-ground structure. During the reporting period, a total of RMB 567 million was invested in the project, with a cumulative investment of RMB 1.582 billion since the start of the project.
- Phase 3 of Sanya International Duty-Free City completed architectural design and earthwork construction. This project is a strong collaboration between the company and Swire Properties to create a new tourism retail landmark.
- The Haikou International Duty-Free City project saw the main structure of Plot 1 capped, Plot 2 (Yueling Bay project) centrally delivered, Plot 3 (Yuelang Court project) completed and accepted, with other plots progressing as planned. During the reporting period, a total of RMB 1.203 billion was invested in the project, with a cumulative investment of RMB 7.187 billion since the start of the project.
About China Duty Free
China Duty Free Group Co., Ltd. (formerly China National Travel Service Group Corporation) is a holding listed company of China Tourism Group Co., Ltd., focusing on the travel retail business (duty-free) and is a large joint-stock company established in 2008 by CTS Group together with China Duty Free Group and OCT Group. The company was listed on the Shanghai Stock Exchange A-shares in 2009. Operating in the tourism industry, the company primarily engages in duty-free business and the development of tourism commercial complexes. Its wholly-owned subsidiary, CDFG, is the largest duty-free operator in China, dealing in the wholesale and retail of duty-free goods such as tobacco, alcohol, and fragrances; while its subsidiary, CTS Investment Company, is responsible for the investment and development of tourist destination commercial complexes.
| Source: Official Financial Report
| Image Credit: Official Weibo, Official Website
| Editor: LeZhi
