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 close its borders. Closing borders means that the first line will be opened, the second line will be controlled, and there will be freedom within the island.

"The first line opened" refers to smoother connectivity between Hainan Free Trade Port and the world; "the second line controlled" indicates moderate regulation of connections between Hainan Free Trade Port and the mainland.

The closure of Hainan involves related sectors in Hainan:

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 Q1 2024: operating revenue of 0.58 billion yuan, year-on-year +4.5%, approximately 2.1 million visitors, year-on-year +7.5%, average daily room price of 2,500 yuan, year-on-year -2.8%, mainly due to the increase in the proportion of conference, incentive travel, large corporate meetings, and event exhibition business structure, with an average occupancy rate of 95.0%, up 0.8 percentage points compared to the same period in 2023.