Recently, China Duty Free released its 2023 performance forecast, with annual revenue of 6757.6 billion yuan, a year-on-year increase of 2415%, and the net profit attributable to shareholders of the listed company was 671.7 billion yuan, a year-on-year increase of 3352%。During the reporting period, the gross profit margin of the main business of China Duty Free was 3144%, a year-on-year increase of 342 percentage points.
Among them, the fourth quarter achieved revenue of 1673.9 billion yuan, a year-on-year increase of 1109%, and the net profit attributable to shareholders of the listed company was 151 billion yuan, a year-on-year increase of 27562%。
In 2023, Haikou Customs will supervise a total of 437 duty-free sales on outlying islands600 million yuan, a year-on-year increase of 254%, and the number of duty-free shoppers was 67560,000 person-times, a year-on-year increase of 599%；Duty-free shopping was 51.3 million, a year-on-year increase of 38%。
Among them, according to the data disclosed by Haikou Customs, the duty-free sales of offshore islands in the fourth quarter were 88500 million yuan, a year-on-year increase of 144%, the number of shoppers exceeded 1.5 million, a year-on-year increase of more than 70%.
Correspondingly, the change in the revenue of China Duty Free in the fourth quarter was basically consistent with the change in the overall revenue scale of offshore duty-free.
At the same time, since 2023, the travel boom has significantly increased the number of duty-free shoppers. According to Haikou Customs, during the New Year's Day holiday, the amount of duty-free shopping on the outlying islands was 47.5 billion yuan, an increase of 12 compared with 20226%, and the number of duty-free shoppers reached 6570,000 person-times, a year-on-year increase of 528%。It is expected that during the peak tourist season in Hainan during the Spring Festival, duty-free sales are expected to recover further.
In the second half of 2023, the second phase of Sanya International Duty Free City and the Global Beauty Plaza in Area C will be opened one after another, and the layout and venue planning of the heavy luxury will be further upgraded, and the consumer experience is expected to continue to improve.
Outlying islands and online sales continued to be the main force in the fourth quarter, while airport store operations need to be further recovered.
At the end of 2023, China Duty Free announced the signing of supplementary agreements with Shanghai Airport and Capital Airport respectively, which is the second adjustment after the supplementary rent adjustments with Shanghai Airport and Capital Airport in January 2021 and October 2021 respectively.
The core idea of this adjustment is to change the "traffic linkage + capping" mode in the previous adjustment back to the "guaranteed + commission model" of the original agreement, and at the same time significantly reduce the guarantee and commission (compared with the original agreement). The minimum guarantee has been reduced from billions of dollars to hundreds of millions of yuan in the original contract; According to the commission, the gross profit margin of the tax-exempt merchant has decreased from about 40% of the original contract to the range of 18-36%.
As an important channel for duty-free sales, the rent adjustment will also help encourage duty-free merchants to further enhance the motivation to sell duty-free goods at the port, which is another fulfillment of the bargaining power of duty-free merchants. The signing of the supplementary agreement is intended to strive for the support of duty-free merchants and increase the scale of duty-free sales at the airport, which is another logical fulfillment of the diversification of duty-free sales channels and the improvement of duty-free bargaining power since 2019.
Today, CDFG has become a leader in the duty-free industry in China and even in the world, and has once again achieved double-digit growth in revenue and net profit in the duty-free market. Although it has not yet returned to the peak of 2021 - the revenue is as high as 6767.6 billion yuan, net profit attributable to the parent company as high as 965.4 billion yuan, but the recovery trend is good, and many institutions are quite optimistic about the prospects of the duty-free industry in 2024 after the announcement of the performance forecast.
Duty-free on outlying islands continues to be restored, and duty-free at airports is picking up at an accelerated pace
Benefiting from the continuous rebound in demand for cultural and tourism consumption, Hainan tourism is booming. In the first 11 months of 2023, Hainan province received 5,681 overnight tourists080,000 person-times, which has recovered to 94 in the same period of 1942%。
From the perspective of key airports, Haikou Meilan Airport has a year-on-year increase of 116 in passenger throughput in the first 11 months of 202374%, which has recovered to 99 in the same period in 201967%；Sanya Phoenix Airport's passenger throughput in the first one month of 2023 increased by 134 year-on-year90%, recovering to 108 in the same period of 201999%。
The recovery of Hainan's tourism industry continues to restore the offshore duty-free market. However, under the influence of multiple factors such as weak mid-to-high-end consumption power, narrowing of discount margins, and Hainan ** crackdown, the recovery of duty-free sales on outlying islands is slightly weak.
Judging from the duty-free sales on the outlying islands from January to November 2023, the sales volume will be 4066.6 billion yuan, a year-on-year increase of 261%, and the average order value is 653055 yuan, recovering to 90 in the same period in 202187%。
The analysis of airport duty-free can start with the recovery of the total number of flights. From the perspective of key airports, as of the end of November, the throughput of overseas routes of Guangzhou Baiyun Airport, Shanghai Airport and Beijing Capital Airport has recovered to the same period in 2019. 37%, and the total number of executed flights showed a continuous recovery trend.
According to data from the Civil Aviation Administration of China, a total of 13,004 passenger flight plan applications of 116 airlines have been approved, involving 65 overseas countries, and the flight schedule is about 70 percent of the 2019 winter and spring season7%。With the recovery of flight capacity, the airport's international passenger flow is expected to gradually recover, driving the airport's duty-free sales to pick up.
The tourism sector boosted confidence
Since the beginning of this year, the domestic cultural tourism market has been hot as a whole, from winter ice and snow tours, "Erbin" fire out of the circle to Hainan cold tourism, Thailand's new visa-free policy, all places are giving full play to local characteristics, pushing the tourism track to one of the hottest tracks this year.
Along with this, the tourism track has been active in recent days, Changbai Mountain has risen sharply for many days, and China Duty Free has also ushered in continuous gains. The performance of tourism EFT is stronger than **, covering several major travel and tourism consumption industries such as airlines, hotels and catering, and scenic entertainment, which has boosted market confidence.
In the short term, the domestic tourism market has experienced the rational prosperity of the Mid-Autumn Festival and National Day holidays in 2023 and the development and prosperity of the New Year's Day holiday in 2024, and it is expected that the Spring Festival holiday in 2024 will usher in a new wave of tourism and travel.
In the long run, cultural and tourism units around the country are learning from and absorbing the experience of Zibo, Harbin and other places, relying on the local cultural, industrial, geomorphological and other characteristic advantages, with the help of the opportunity of holding theatrical performances, concerts, art festivals, through effective promotion channels such as e-commerce live broadcast, ready to go, the tourism boom from a phased phenomenon to a continuous "gold and silver mountain" development.
The performance market has shown a boom in both supply and demand since last year, the hotel industry is gradually completing the mid-to-high-end transformation under the expansion and promotion of the three leading groups, the catering and retail industry has a good recovery momentum, and the duty-free industry continues to develop and ...... in the context of the continuous recovery of offshore duty-free and the increase of duty-free in the city
The continued popularity of the tourism sector has also given the market more confidence.
Conclusion
Duty-free operators are the core of the duty-free industry chain and the center of industrial operation, and their essence is a sales channel, mainly relying on the best advantages to attract consumers.
The continued growth of the global travel retail market has led to the continuous expansion of the duty-free market. As one of the fastest-growing markets in the world, Asia's travel retail market has great growth potential.
With the huge number of domestic tourists and the trend of tourism consumption, it has become an obvious and important direction to further push the performance of China Duty Free to a higher level with the help of this wave.
Disclaimer] The content of the article is for research and study purposes only and does not constitute any investment advice.