(Yicai) March 28 -- Shares of China Tourism Group Duty Free advanced as the Chinese retailer of tax-free goods said that after recording a 34 percent increase in net profit it will reward its investors by distributing more than half of the gains as cash dividends.

In Shanghai, CTG Duty Free [SHA: 601888] moved up 3.6 percent to CNY86.14 (USD12) as of noon while its Hong Kong-listed shares [HKG: 1880] were trading 8.3 percent higher at HKD78.75 (USD10).

The operator of the world’s largest and second-largest duty-free shopping complexes, namely the Haikou International Duty-Free City and the Sanya International Duty-Free City, logged CNY6.7 billion (USD927.3 million) in net profit last year, up 34 percent from the year before, according to its annual earnings report published yesterday. After cooling in 2022, China's offshore duty-free market resumed recovery last year as annual sales rebounded to equal over 90 percent of that in 2021.

CTG Duty Free operates six duty-free shops in Hainan province, the largest free-trade port in the country. The southern island province welcomed over 90 million tourists last year, rising by half from 2022, according to public data. Hainan's 12 duty-free shops earned CNY58.1 billion (USD8 billion) in sales, up 19 percent. The number of shoppers tallied nearly 6.8 million, a 60 percent boost, and each spent an average of CNY6,478 (USD897)

The company is actively expanding abroad. It obtained the rights to operate a duty-free store in Cambodia's Siem Reap-Angkor International Airport, won a bid to run a boutique for Qeelin-branded jewelry at Singapore Changi Airport, and opened duty-free shops on cruise ships Adora Magic City and Costa Mediterranea.

CTG Duty Free did not give earnings guidance but Soochow Securities said that the brokerage has a bullish view on the company's future in the medium and long term due to China's tax-free policy and the gradual recovery of outbound tourism.

Editor: Emmi Laine