CITIC Securities: Suggest focusing on tourism industry chain companies that will benefit in the long term from the Hainan border closure policy.

According to the research report of CITIC Securities, the State Council Information Office held a press conference on the construction of the Hainan Free Trade Port, officially announcing the full island closure from December 18, 2025. We believe that the biggest significance of the closure lies in the trade aspect, while also helping to accelerate the construction of Hainan as an international tourism consumption center. Related entities in the tourism industry chain on the island will benefit in the long term. For duty-free operators, we believe that the continuation of the offshore duty-free policy will maintain its competitive advantage, as the policy opens up more in terms of duty-free quota and restrictions for entry into the "second line". The increased attractiveness of Hainan due to the closure and the increase in people flow will contribute to the overall development of the tourism retail market in Hainan. It is clear that the core advantages of leading property layout, supply chain resources, and excellent operational capabilities are the underlying support from a business perspective. Duty-free operators who complete their commercial layout ahead of others will still maintain a dominant position in the Hainan retail market. In conclusion, we recommend focusing on companies in the tourism industry chain that will benefit in the long term under the Hainan closure policy.