China’s Largest Duty-Free Retailer Plans Hong Kong Listing
Shanghai-listed China Tourism Group Duty Free Co. Ltd. (CTGDF), parent of the country’s largest duty-free retailer China Duty Free Group, is preparing for a Hong Kong flotation after the company reported a surge in profits last year.
CTGDF is discussing a listing plan with intermediaries, pending approvals from the company’s board, shareholders and regulators, the company said Wednesday in a filing with the exchange.
CTGDF reported 2020 revenue of 52.6 billion yuan ($8 billion), up 8.2% from the previous year despite international travel halts during the pandemic. The company’s 2020 net profit surged 32.6% to 6.1 billion yuan.
What’s the context: CTGDF said about 60% of its 2020 revenue came from duty-free sales in the tropical island province of Hainan. China launched new policies to encourage duty-free shopping in Hainan that took effect July 1 as part of efforts to bolster domestic consumption and develop the province into a new commercial hub.
The policy revisions unleashed Chinese shoppers’ appetite for imported consumer goods, which was suppressed by the pandemic lockdown and suspension of international travel.
However, due to international disruptions caused by the pandemic, CTGDF’s airport duty-free shops reported dramatic sales declines in 2020, the company said.