The Ministry of Foreign Affairs and the People's Government of Hainan Province will hold a global promotion event for Hainan Free Trade Port in the Blue Hall on the afternoon of December 4th. The theme of this event is "Local practice of Chinese modernization: New era, new mission, and new opportunities for Hainan Free Trade Port". This promotion event will comprehensively showcase the unique advantages, early achievements, development prospects of Hainan Free Trade Port, and the cooperation opportunities it provides to the world, demonstrating China's firm determination to promote reform through openness and build a new system of higher-level open economy.

The Customs Tariff Commission of the State Council has announced the "Measures for the Levy of Import Duties, Value-Added Tax, and Consumption Tax on Imported Goods".

The regulations have been adjusted and improved based on recent practices, for example, the limit value for items that can be imported through mailing channels has been uniformly increased from the current 800 yuan and 1000 yuan to 2000 yuan, the quantity of cigars that can be brought in duty-free has been reduced, and there have been minor adjustments in the classification of certain commodities, with detailed and improved procedural regulations regarding classification valuation, declaration, and taxation.

Hainan has fully started preparations for the island-wide closure and ensure the hardware conditions for closure by 2024, and complete all preparations by 2025.

It was learned from the Securities Times APP that the "14th Five-Year Plan (2021-2025) for the construction of ports in Hainan Free Trade Port" clearly calculates the total investment amount for port construction planning during the "14th Five-Year Plan" period to be approximately 11.5 billion yuan. At the same time, according to the relevant plan, the "secondary ports" of various port areas in Hainan need to have the hardware conditions for closure by the end of 2023, complete all preparations by the end of 2024, and smoothly start the "island-wide closure" before 2025.

In 2025, Hainan will be completely closed. Closure means opening the first line, controlling the second line, and allowing freedom within the island.

"Opening the first line" means smoother connectivity between the Hainan Free Trade Port and the rest of the world; "controlling the second line" means moderate control over the connection between the Hainan Free Trade Port and the mainland.

The closure of Hainan involves the following Hainan sectors:

Meilan Airport (00357): The main airport in Hainan that is the only major airport releasing production capacity, and the main recipient of the incremental passenger flow in Hainan and the dividend from the construction of the free trade port. The company is positioned as the international core hub of Hainan Free Trade Port, returning to state-owned management after restructuring, with the controlling shareholder background being Hainan State-owned assets. Sanya Phoenix Airport has already reached its capacity in 2019/2023 (Sanya Phoenix can accommodate 20-25 million passenger throughput, with no clear expansion plan yet), and the incremental passenger flow is mainly taken over by Haikou Meilan (designed capacity of 35 million passenger throughput). Meilan Airport in Haikou has a leading duty-free operating area of 0.04 million square meters (0.018 million square meters already utilized), luxury brands have been successively introduced, narrowing the gap with downtown stores. The company's duty-free deduction rate is approximately 15%, significantly lower than the industry average. In the post-epidemic era, the duty-free deduction rates of major industry airports are in the range of 20-36%. The duty-free operating agreements for Meilan's T1/T2 terminals will expire at the end of 2024/2026 respectively, with the deduction rates expected to be renegotiated.

China Tourism Group Duty Free Corporation (01880): The company's sales performance is closely related to the volume of inbound and outbound tourists visiting Hainan and the conversion rate of tourist purchases. With the implementation of the downtown duty-free shop policy, China Tourism Group Duty Free Corporation is expected to be the first to benefit. On August 27, the downtown duty-free shop policy was implemented, allowing Chinese nationals to shop in downtown shops and pick up goods at the ports within 60 days before departure without a shopping quota. A total of 19 duty-free shops have been transformed into new downtown duty-free shops for outbound tourists, while approvals have been granted to establish 1 downtown duty-free shop in 8 cities including Guangzhou, Chengdu, Shenzhen, Tianjin, Wuhan, Xi'an, Changsha, and Fuzhou. The first batch of transformed downtown shops are all under China Tourism Group Duty Free Corporation, which is expected to be the first to benefit from the market expansion driven by downtown shops.

Fosun Tourism (01992): Sanya Atlantis 24Q1: Revenue of 0.58 billion yuan, yoy +4.5%, approximately 2.1 million visitors, yoy +7.5%, average daily room rate of 2,500 yuan, yoy -2.8%. The increase in the proportion of conference, incentive travel, large-scale corporate meetings, and event exhibition business structure, with an average room occupancy rate of 95.0%, an increase of 0.8 percentage points compared to the same period in 2023.