CHINA. China Duty Free Group (CDFG) parent company China International Travel Service Corporation (CITS) has issued a clarifying statement regarding media reports of an agreement between CDFG and Sunrise Duty Free.
The story broke in Chinese media, including Duty Free Expert (with whom The Moodie Davitt Report works closely on selected projects), on Tuesday, and was later picked up by certain western media. It claimed that CDFG had acquired a 51% stake in Sunrise.
The Moodie Davitt Report was aware of the original report and all the relevant facts, having spoken to CDFG and Sunrise. We were advised that any such story was at that point both premature and acutely sensitive and were asked to withhold publication.
That request was respected by The Moodie Davitt Report. CDFG is bound by stockmarket rules and adhered strictly to them. Sunrise Duty Free declined to comment.
We will bring you the full story once matters are concluded.
The Chinese reports led to a sharp spike in China International Travel Service Corporation’s share price, forcing the group to issue a statement by its Board of Directors late last week. It said: “The cooperation matter [between CDFG and Sunrise Duty Free -Ed] is pending for internal and external decision-making and approval procedures by related parties, and if CDFG becomes a winning bidder [in the Beijing Capital International Airport duty free tender -Ed] and cooperates with Sunrise China, which is currently subject to significant uncertainties.
“In February 2017, Beijing Capital Airport Commercial and Trading Co Ltd issued an open tender notice covering its duty free concessions at international terminals… China International Travel Service Corporation Limited’s (CITS) wholly owned subsidiary China Duty Free Group (CDFG) intends to participate in the bidding. A board meeting held by CITS will consider CDFG’s authorisation to participate in the bidding project and related matters. At that time CITS will disclose information examined by its Board of Directors according to law.
“The cooperation matter is pending for internal and external decision-making and approval procedures by related parties, and subject to whether CDFG becomes a winner in the bidding project.” – China International Travel Service Corporation Limited
“Recently, the media reported the cooperation between CDFG and Sunrise Duty Free (China) Co Ltd (hereinafter referred to as Sunrise China), the current duty free operator at Beijing Capital International Airport.
“In order to ensure fair information disclosure, protect the interests of investors, and avoid the abnormal fluctuations of the company’s stock price, CITS clarifies the relevant reports as follows: The cooperation matter is pending for internal and external decision-making and approval procedures by related parties, and subject to whether CDFG becomes a winner in the bidding project.
“In view of the above matters, there is a significant uncertainty. CITS solemnly reminds the investors that China Securities Journal and Shanghai Stock Exchange website (http://www.sse.com.cn) are CITS’s designated information disclosure media. CITS’ official announcement disclosed in the above media shall prevail. CITS reminds its investors that they should fully understand the stock market risks, and conduct prudent decision-making and rational investment.
“The board of directors and all the directors of CITS warrant that there are no false records, misleading statement or significant omission in this announcement, and shall be jointly and severally liable for its authenticity, accuracy and completeness.”
We will bring you a comprehensive and exclusive interview with CDFG President Charles Chen, in which he talks of the company’s Chinese and global ambitions, in coming weeks.
Note: The Moodie Davitt Report can also clarify certain points of inaccuracy and confusion in the market with the following information:
- CDFG has bid on both core category tenders at Hong Kong International Airport. As revealed by The Moodie Davitt Report, both bids were in a CDFG-led joint venture with Lagardère Travel Retail. Sunrise Duty Free has bid on the perfumes & cosmetics and accessories contract,
- Beijing Capital International Airport issued a dual tender notice covering its duty free retailing concessions at Terminals 2 and 3. The businesses are currently run by Sunrise Duty Free and, as mentioned by CITS, CDFG is bidding. The notice was issued on 24 February. Bids for the two tenders (offered separately) close on 6 April.
CDFG President Charles Chen with Martin Moodie at the recent China’s Century conference in Guangzhou. We’ll bring you an exclusive interview on CDFG’s ambitions in coming weeks once the Sunrise Duty Free matter is resolved.
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