Alibaba-Backed Easyhome’s Shares Hit Limit up on Duty-Free Cooperation
Tang Shihua
DATE:  Jan 26 2021
/ SOURCE:  Yicai
Alibaba-Backed Easyhome’s Shares Hit Limit up on Duty-Free Cooperation Alibaba-Backed Easyhome’s Shares Hit Limit up on Duty-Free Cooperation

(Yicai Global) Jan. 26 -- Easyhome New Retail Group shares rose by the daily price limit today as the home product chain retailer in which internet giant Alibaba Group Holding has a stake announced yesterday its unit will set up a duty-free household products joint venture in China's largest free-trade zone.

Beijing-based Easyhome's shares [SHE:000785] soared 10 percent to stop trading at CNY7.94 (USD1.20) by the lunch break today.

The Chinese government has adopted a free-trade port policy in China’s southernmost province of Hainan, a major tourist island often likened to Hawaii, implementing an offshore duty-free policy province-wide since July 1 that sent shares of most listed firms with local tax-free shop licenses through the roof last year.

Hainan Tourism Investment Heihu Science and Technology will invest CNY15.3 million (USD2.4 million) for a 51 percent stake in the JV, and Easyhome Commercial Management will take the rest for CNY14.7 million, per the statement.

The JV will set up one duty-free shop in Hainan's capital of Haikou. Easyhome Commercial Management will license it to use Easyhome's trademarks, the statement added.

Unlimited Potential

Easyhome's Sanya Easyhome Shopping Center unit and Hainan Tourism Investment Duty-Free Goods have also agreed to lease about 47,000 square meters to the JV as premises for the largest duty-free shop in Hainan Tourism Duty Free Shopping Complex in the famed tourism city of Sanya’s downtown. Hainan Tourism Investment Duty-Free Goods is under the control of the provincial government.

This is Easyhome's first such project. The market holds great potential and the new venture will enhance the company's main household product and services businesses, per the statement.

Major Chinese chain retailer Easyhome, formerly Wuhan Zhongshang Commercial Group, mainly plies the commercial retailing business in the form of modern department stores, shopping malls, supermarkets and pharmaceutical retailing. It also engages in leasing. It mainly operates in central Hubei province, according to Reuters.

The company operates 416 chain stores and 706 franchised ones in 272 Chinese cities. Internet giant Alibaba and its affiliates make up Easyhome's second-largest shareholder with a combined 14.73 percent stake.

Editor: Ben Armour, Xiao Yi

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Keywords:   Joint Venture,Duty Free Shop,Hainan,Free Trade Zone,Chain Store Operator,Easyhome