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<Research>JPM: Increase in Duty-free Allowance for CN Visitors May Not Offset Exchange Rate Impact, Unlikely to Boost HK Luxury Goods Sales
Recommend 13 Positive 26 Negative 16 |
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China's Ministry of Finance (MOF) announced that the duty-free allowance for mainland Chinese travelers visiting Hong Kong and Macau would be raised from RMB5,000 to RMB12,000, JPMorgan issued a research report saying. The introduction of the measure was expected, and the amount is lower than the market's expectation of RMB30,000. JPMorgan expected there will be a slightly positive impact on non-luxury goods industries, but the impact on the sales of luxury goods will be little. Due to the fluctuation of exchange rate, the current price of luxury goods in Hong Kong is only about 4% lower than that in Mainland China, while the price spread of luxury goods purchased in Japan and France are 23% and 24%, according to the broker's research. Coupled with the downgrading of consumption and changes in tourist behavior, it is believed that the measures are unlikely to drive a significant recovery in the sales of luxury goods in Hong Kong. JPMorgan recommended investors to continue to pay attention to LINK REIT (00823.HK), which is expected to outperform discretionary for sales. Therefore, JPMorgan rated LINK REIT at Overweight, with a target price of $42. JPMorgan was relatively bearish on WHARF REIC (01997.HK), with rating at Underweight and a target price of $22. The latest ratings and target prices of the sector are listed in a separate table. AAStocks Financial News |
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