According to Caixin on January 8 (Editor: Feng Yi), recently the Hong Kong stock market has remained in a state of adjustment, and the consumer stocks that were previously buoyed by policy Bullish have also faced many setbacks.

Today in the Hong Kong stock market, the duty-free leader China Tourism Group Duty Free Corporation (01880.HK) saw its shares drop by over 4% at one point during the trading day, reaching a new low since October 17, 2024, which is Bearish for the Consumer Sector.

Additionally, it is noteworthy that since peaking with the Hong Kong stock market last October, China Tourism Group Duty Free Corporation's shares have cumulatively fallen nearly 40% from their high, highlighting the market's disappointment in the duty-free industry.

Morgan Stanley has released a research report stating that it will adjust the Target Price for China Tourism Group Duty Free Corporation's shares from 60 Hong Kong dollars to 55 Hong Kong dollars.

According to statistics from Haikou Customs, in 2024, Haikou Customs supervised a total of 30.94 billion yuan in duty-free shopping in Hainan, compared to 43.76 billion yuan in 2023, representing a year-on-year decrease of about 13 billion yuan.

Furthermore, although Morgan Stanley stated that the revival of China Tourism Group Duty Free Corporation's port business is on track, it has also lowered revenue forecasts for 2025 and 2026 by 2%, while Net income expectations have been similarly revised down to reflect the impact of increased sales mix and more promotional activities.

An Analyst in the duty-free sector also indicated that the decline in Hainan's duty-free sales in Q4 2024 has narrowed. Among them, the sales of China Tourism Group Duty Free Corporation in December outperformed other companies, benefiting significantly from the degree of discounts and strong marketing efforts, and the sales realization rate saw double-digit growth in the first half of the month, but a noticeable drop occurred in the second half.

Overall, regardless of market feedback or institutional expectations, the outlook for duty-free consumption remains quite Bearish at present. Additionally, during the recovery of consumer spending, non-essential items such as travel and duty-free shopping are lagging behind, which has also impacted the performance of duty-free concept stocks.

Guosen's social service team recently stated in a report that the duty-free Sector still needs to consider the disruption from the gradual recovery of Consumer spending in the short term. If Consumer spending stabilizes and recovers in the medium term, considering that city shops offer outbound travelers more flexible shopping times and a rich selection compared to airports, they are expected to become an important channel for consumer spending return.

However, with the Spring Festival approaching and recent policies continuously emphasizing the boost of travel and service consumption, the enthusiasm in the travel market is expected to significantly increase, which may provide certain rebound momentum for the duty-free and other Consumer sectors.