HK Stock Market Move | China Tourism Group Duty Free Corporation (01880) surged over 6% in the morning trading session, with hopes that the consumption tax reform will accelerate. Institutions believe that overall, the tax reform will benefit duty-free theoretical price differentials.

China Tourism Group Duty Free Corporation (01880) rose over 6% in early trading, rising 5.07% to 50.8 Hong Kong dollars, with a trading volume of 145 million Hong Kong dollars at the time of publication. On the news front, Shen Danyang, head of the drafting team of the government work report and director of the State Council Research Office, said on the 5th that this year will accelerate the relocation of some item consumption tax collection links and delegate them to local governments. This reform has been proposed for many years, and this year the decision has been made to speed up the reform. This reform has a wide-ranging impact and obvious benefits, as it will help reduce the financial pressure on production enterprises, not increase the burden on taxpayers, and also help guide local governments to improve the consumption environment and stimulate local consumption. It is reported that the consumption tax reform has attracted market attention since July last year. China Securities Co., Ltd. Securities said that the direction of consumption tax reform is generally favorable for duty-free theoretical price differentials, but the actual price attractiveness still needs to consider multi-channel issues. Haitong pointed out that consumption tax reform is expected to benefit the duty-free industry, especially leading duty-free companies. If the price difference between taxed and duty-free goods widens, the price advantage of duty-free channels is expected to attract more consumers, thereby driving the performance growth of listed companies in the duty-free industry. In addition, local governments are expected to introduce consumption stimulus policies more actively after the consumption tax reform to promote local consumption.