Guosheng Securities released a research report indicating that Hainan's offshore duty-free sales in Q3 2025 totaled RMB 5.402 billion, down 2.7% year-on-year. The number of duty-free shoppers reached 946,800, a decline of 23.4% YoY, while the average spending per customer rose 27.1% YoY to RMB 5,705.53.

Following the implementation of the upgraded duty-free policy on November 1, the first day saw duty-free sales of RMB 78.549 million, with 54,800 items purchased by 12,700 shoppers. Sales increased by 6.1% compared to the previous day (October 31), indicating initial positive effects from the policy adjustments.

Among operators, China Tourism Group Duty Free Corp. (601888.SH) reported improved revenue growth and gross margins in Q3 2025 compared to the previous quarter, suggesting potential recovery in the sector.

**Key Takeaways from Guosheng Securities:** 1. **Q3 2025 Data Shows Recovery, Q4 Expected to Remain Stable** According to Haikou Customs, Q3 duty-free sales in Hainan reached RMB 5.402 billion (-2.7% YoY), with 946,800 shoppers (-23.4% YoY). However, September saw a 3.4% YoY increase in sales to RMB 1.733 billion—the first positive growth in 18 months—while customer spending rose 22% YoY to RMB 6,189.29. Q4 is projected to remain stable.

2. **Policy Implementation Gains Momentum** On July 23, the State Council announced that Hainan Free Trade Port’s customs closure would officially begin on December 18, 2025, clarifying policies on duty-free goods and value-added processing. On October 17, three government departments adjusted duty-free policies, expanding product categories, allowing departing tourists to enjoy duty-free benefits, and increasing purchase quotas for local residents. On October 30, five ministries issued a notice to enhance duty-free shop policies to boost consumption, effective November 1.

3. **Operators Show Signs of Recovery** China Tourism Group Duty Free reported Q3 revenue of RMB 11.711 billion (-0.38% YoY) and net profit of RMB 452 million (-28.94% YoY), with sequential improvements in revenue growth and margins. Post-policy implementation, duty-free sales from November 1–7 reached RMB 506 million (+34.86% YoY), with 72,900 shoppers (+3.37% YoY), signaling potential sector recovery.

**Related Stocks:** China Tourism Group Duty Free (601888.SH), MEILAN AIRPORT (00357), Hainan Airport (600515.SH), Hainan Haiqi Transportation Group (603069.SH), Hainan Development (002163.SZ), Wangfujing Group (600859.SH).

**Risks:** Intensified competition, policy uncertainties, weaker-than-expected demand.