CDFG's Secondary Listing in Hong Kong is Noteworthy

The Chinese government's continuous improvement of the outlying island policy has promoted the rapid growth of the scale of the outlying island duty-free market. In addition, the state also encourages local governments to provide more support to in-city duty-free stores, enabling more in-city duty-free stores to be opened, and the development of in-city duty-free stores is expected to be the biggest driver for the growth of the domestic duty-free market.

The barriers to entry in China's duty-free industry are high, and new entrants to the duty-free business must be approved by the State Council or its authorized government departments. In addition, brand owners entering the duty-free channel will prefer to choose duty-free operators with rich resources and mature experience for cooperation. Therefore, it is difficult for new entrants to compete with existing operators.

CDFG has the largest number of duty-free retail outlets in China and is the only domestic travel retailer with full duty-free channel qualifications. Its sales channels cover port stores, outlying island stores, city stores and cruise stores. The company is also actively developing its online business to seek more growth opportunities.

With rich operational experience and competitive operational efficiency, the Company's net profit margins were 9.9%, 13.5% and 18.4% in 2019, 2020 and 2021, which is higher than the level of global head travel retail operators in the same period. In terms of procurement, CDFG adopts a direct sourcing model, which not only reduces the company's procurement costs, but also helps the company build a solid brand image. In addition, CDFG also has a strong supply chain management system and is the only nationwide duty-free logistics and distribution system in China.