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Shares of Chinese companies operating duty-free stores jumped on expectation that pricing of their goods may become more competitive than mainstream retailers after sweeping tariffs.
China Tourism Group Duty Free Corp. shares rose as much as 28 percent in Hong Kong, the most since Sept. 30. On the mainland, Hainan Haiqi Transportation Group Co., which announced plans to buy the entire stake in Hainan Provincial Duty Free, and Wangfujing Group Co., surged by the 10 percent daily limit.
“Duty-free may benefit from channel shift, theoretically,” Morgan Stanley analysts including Hildy Ling wrote in a note. “This may take place if there are price hikes at other retail channels because of higher tariffs.”
President Donald Trump’s so-called reciprocal tariffs have come into effect, with duties imposed on China going as high as 104 percent. While there’s potential for a prolonged trade war between the world’s two largest economies, Morgan Stanley’s analysts said actual exposure of duty-free retailers to US imports should be low.
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By Bloomberg News
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Trouble in China’s Shopping Paradise as Hainan Duty-Free Spending Falls 29%
Shoppers visiting Hainan, known for its glitzy seafront hotels and sandy beaches, spent 30.94 billion yuan ($4.24 billion) on duty-free goods in 2024, local customs data showed on Thursday, falling 29.3 percent from a year earlier.