China Free (01880) fell by more than 3%. As of press release, it was down 3.07% to HK$72.6, with a turnover of HK$111 million.
The Zhitong Finance App learned that the China Free Tax Service (01880) fell by more than 3%. As of press release, it was down 3.07% to HK$72.6, with a turnover of HK$111 million.
Galaxy Securities pointed out that the company's 1Q24 revenue decline was mainly due to pressure on the Hainan duty-free market and was offset by the resumption of duty-free sales at the airport. According to Haikou Customs data, duty-free sales on Hainan's outlying islands fell 21% year on year in January-February. Among them, the customer unit price fell 19% year on year, higher than the drop in attendance (-3% year over year). The bank believes that this mainly reflects the impact of the strengthening of purchasing supervision in the second half of 2023, as the level of customer orders purchased on behalf of individual customers was significantly higher than that of individual customers. If we look at the month-on-month changes in customer unit prices, the bank expects that from June '24, the negative factors at the customer unit price level brought about by proxy purchasing regulations will gradually be eliminated.
According to a research report released by Yamato, China's first-quarter revenue fell 9.5% year on year, and profits remained roughly flat, mainly due to the fall in the effective tax rate, and revenue pressure was affected by the high base for the same period last year. The bank estimates that its gross sales margin will continue to improve this year, mainly because the company tried to avoid price competition, and inventory clean-up was largely completed last year, and internal management efficiency continued to improve. The recovery in tourism will drive the growth of airport sales, but the decline in per capita consumption may drag down overall performance. The bank downgraded its rating from “buy” to “outperform the market”, and the target price was lowered from HK$135 to HK$80.