Wangfujing Group share price surges after duty free licence award

CHINA. Department store retailer Wangfujing Group’s share price has increased by the Shanghai Stock Exchange’s +10% daily cap for three consecutive days since the company was awarded a duty free licence on 9 June.

At the beginning of trading that day, shares in the company were trading at CNY25.41, but they closed up +7.7% at CNY27.38.

In the three days since then, the share price has immediately surged to the +10% daily cap when markets open before remaining flat for the remainder of the day. The stock closed at CNY30.12 on 10 June, CNY33.13 on 11 June and CNY36.44 today (12 June).

On the rise: A duty free licence spells positive news for Wangfujing Group investors; Source: Google

Wangfujing Group, which sells apparel and cosmetics across more than 47 department stores in 28 cities across all corners of China, said in a statement it would “proactively push forward relevant work” after being awarded the licence.

The Moodie Davitt Report is seeking clarification on the terms of Wangfujing Group’s operating licence and any related timeline.

Wangfujing Group still operates the store it first opened in Beijing in 1955

One Chinese analyst said that while Wangfujing’s licence does highlight a deregulation of the duty free market, it is unlikely to alter the dominance of China International Travel Service (CITS), through subsidiary China Duty Free Group (CDFG).

“We believe that there is still no essential disturbance to the core competitiveness of CITS, and the market has expected this event,” the analyst noted.

While the SSE Composite Index is struggling to shake off the COVID-19 shackles, Wangfujing Group’s shares have more than trebled since the start of April; Source: Google

Shares in Wangfujing Group have now more than trebled since 1 April when the share price stood at CNY12. This comes at a time when the wider Chinese market has only been slowly recovering from the COVID-19 crisis. The SSE Composite Index has risen by +6.8% since 1 April.

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