Morgan Stanley has released a report forecasting that China Duty Free Group will benefit from the upcoming policies related to the Hainan Free Trade Port. The official customs closure is set for December 18, 2025, with the number of duty-free product categories expanding from 1,900 to 6,600, increasing overall coverage from 21% to 74%. This policy shift is expected to bolster China Duty Free Group, which has a strong presence in Hainan. However, Morgan Stanley notes that several policy details remain unclear, particularly regarding the licensing system and measures to prevent parallel trading and grey-market arbitrage. While Morgan Stanley maintains an “Equal-weight” rating on China Duty Free Group’s H-shares, with a target price of HK$55 ($7), the company faces challenges including reduced tax advantages and intensifying competition.