CITS Alert:Nov 2016duty free sales up 15.5%yoy

Nov 2016duty free sales increased 15.5% yoy

    At mid-January of 2016, the Ministry of Commerce (MOFCOM) releasedNovember’s Hainan duty free sales (Sanya + Haikou). November 2016dutyfree sales growth was 15.5% yoy.

    Based on MOFCOM data, 11M16duty free sales grew 7.2% yoy toRMB5.26bn, and number of customers increased 2.7% yoy to 1.52m. Thisimplies a 4.4% yoy expansion in ticket price to RMB3,462.

    As CITS resumes the rebate to local travel agencies in May and June 2016, webelieve sales growth will rebound in 4Q16. As we can see in the chart below,sales in October and November showed a strong rebound from flattish 3Q andnegative yoy 2Q.