Established in 1984 and after nearly 40 years of development, we have become the largest travel retail operator in the world primarily focusing on sales of high-quality duty-free and duty-paid merchandise to domestic and international travelers and mid- to high-end customers, forming an all-round shopping experience. According to Frost & Sullivan, our worldwide ranking by sales revenue has steadily increased over the past 10 years, from the 19th in 2010 to the 12th in 2015, and further to the fourth in 2019 before reaching the first in 2020 and 2021, with a 24.6% market share of the global travel retail industry in 2021. We have developed China’s travel retail business with duty-free as our core strength and seek to increase our global presence. We are the only retail operator in China covering all duty-free sales channels (which include port stores, offshore stores, downtown stores, cruise stores, inflight stores and ship-supply stores). We have the most duty-free stores in China. Our prominent market position is largely due to the history and regulatory landscape of the duty-free industry in China. As of December 31, 2021, we are among nine groups of entities with duty-free operation permits in China, among five groups of entities with duty-free operation permits to operate duty-free port stores nationwide, and the only group with operation permits for all types of duty-free stores in China. As of the Latest Practicable Date, we operated 193 stores, including 184 stores in 100 cities across 28 provinces, municipalities and autonomous regions in China. We also operate nine duty-free stores overseas, including seven in Hong Kong, Macau and Cambodia and two cruise duty-free stores. According to Frost & Sullivan, from 2019 to 2021, the airports where we operated stores alone served more than 2.2 billion travelers.
Our business from continuing operation has significantly grown during the Track Record Period. For the years ended December 31, 2019, 2020 and 2021, our revenue was RMB48,012.6 million, RMB52,597.8 million and RMB67,675.5 million, respectively, and our net profit was RMB5,471.1 million, RMB7,109.4 million and RMB12,441.3 million, respectively. From 2019 to 2021, our revenue grew at a CAGR of 18.7% and our net profit grew at a CAGR of 50.8%. For the three months ended March 31, 2021 and 2022, our revenue was RMB18,133.5 million and RMB16,782.3 million, and our net profit was RMB3,427.6 million and RMB2,933.7 million, respectively.
We are a pioneer of China’s duty-free industry. Since our establishment in 1984, we have been continuously promoting the development of China’s duty-free industry. We opened China’s first offshore store in downtown Sanya in 2011 in anticipation of favorable offshore duty-free policies. Furthermore, we opened China’s first integrated travel retail complex, the Sanya International Duty-Free Complex, in Sanya in 2014, pioneering the integrated travel retail complex business model for China’s duty-free industry. The Sanya International Duty-Free Complex has become a new landmark of tourism in Hainan; it is also the largest standalone integrated travel retail complex in the world by sales area as of 2020, with a sales area of more than 70,000 sq.m. While focusing on duty-free business, it also conducts other businesses such as duty-paid retail, dining, entertainment and leisure, providing travelers with a diversified one-stop shopping and leisure experience. In 2021, revenue generated from the Sanya International Duty-Free Complex amounted to RMB34,811.2 million, ranking first among all shopping complexes in China. Additionally, in 2018, we further opened the first cruise duty-free store in China. Furthermore, while it is expected that duty-free policies in China will be further relaxed, existing duty-free policies and regulations may change from time to time beyond our control or expectation. See “Risk Factors – Risks Relating to Our Business and Industry – Changes in the existing duty-free policies and regulations (or the interpretation thereof) could have an adverse impact on our business.”
In terms of geographical coverage, we believe we have the best duty-free stores in China. We have captured the core offshore duty-free sales channels in Hainan, including Haikou Meilan International Airport and Sanya Phoenix International Airport, the core downtown areas of Haikou and Sanya, as well as the area of Boao Forum for Asia. We have concession rights to operate duty-free stores in major aviation hubs in China and the Asia-Pacific Region, including nine of the top 10 airports in China and, in particular, the top three airports (Beijing Capital International Airport, Shanghai Pudong International Airport and Guangzhou Baiyun International Airport), in terms of international passenger traffic in 2019 prior to the COVID-19 outbreak, as well as the Hong Kong International Airport, the Macau International Airport and other Asia-Pacific international hub airports.
Our global procurement capability is our core competency, which enables us to have the most comprehensive brand portfolio in China’s duty-free industry. We have established stable long-term relationships with world-renowned brands and rank among the top tier travel retail operators in the world in terms of brand resources, far ahead of other domestic duty-free operators. Our excellent procurement advantage enables us to provide our customers with a high-quality product portfolio at favorable prices.
We have established the only nationwide duty-free logistics and distribution system in China. We have also formed direct procurement channels with more than 430 merchandise suppliers and over 1,200 brands worldwide. Our merchandise primarily includes mid- to high-end perfume and cosmetics, fashion and accessories (such as watches, jewelry, clothing and accessories), tobacco and liquor, food and miscellaneous goods.
We have won various important awards and certificates during the Track Record Period, including “Top 100 Listed Companies in China”, “Top 100 Companies in China”, “Top 100 High Growth Companies in China Award” and “Top 100 Best Management and Operation in China Award” in 2021 by Warton Economic Institute, “Model Enterprise of Corporate Governance of State-owned Enterprises” in 2021 by SASAC, “Top 100 Main Board Value Award” by Securities Times, “Most Valuable Company of the Year” in 2021 by CHN Fund, “The Best Board of Directors for Investor Relations in Main-Board-Listed Chinese Companies” in 2021 by Securities Times, “Digital Economy Pioneer Award” in 2020 by Securities Daily, “30 Most Influential Listed Companies in 2020” by Caijing Magazine and “Top 500 Most Valuable Brands in China” (ranking first in the travel retail industry) in 2020 by World Brand Lab. Additionally, our store at Hong Kong International Airport was awarded as the “Best Airport Liquor Retailer in 2019” by Drinks International Magazine.
Source: CTG Duty Free (01880) Prospectus (IPO Date : 2022/08/15) |