Citi Says ‘Good Time' to Accumulate Chinese Property Stocks
Citigroup Inc. strategists called on investors to build positions in Chinese property stocks, as policy support and better management practices are expected to improve the sector's profitability.
'We reckon it is a good time to accumulate China property sector over a two-year horizon, with ongoing return-on-equity improvement on asset turn and pricing,' analysts Griffin Chan and Cindy Li wrote in a Wednesday note.
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Axios
an hour ago
- Axios
Trump tariffs could dampen July Fourth fireworks for 2026
As Americans prepare to light up the skies this Fourth of July, the fireworks industry is sounding the alarm: without tariff relief, the nation's 250th birthday celebration in 2026 could be in jeopardy. Why it matters: A looming tariff burden on Chinese imports is sparking fears of higher costs, supply shortages and even canceled shows. "If the tariff increases again back up to triple digits — let's say 145% — it will cripple this industry," Julie Heckman, executive director of the American Pyrotechnics Association, told Axios. The big picture: 99% of consumer fireworks and 90% of professional display fireworks used in the U.S. come from China, Heckman said. A 25% to 145% tariff imposed under a trade provision known as Section 301 is adding strain to the supply chain and pricing. China typically halts fireworks production during hot summer months due to safety risks, narrowing the window for U.S. importers to place and receive orders. Zoom in: Bruce Zoldan, CEO of Ohio-based Phantom Fireworks, told Axios that his 100 stores have seen a big surge in recent days. Over the weekend, Phantom also opened 1,600 seasonal stands and tents. "People are starting to buy now," he said, noting sales are almost 30% higher per day than last year. "If you wait until July 1st, 2nd, or 3rd, half the merchandise is sold out and the lines are long." Phantom — the nation's largest consumer-based retail fireworks company, supplying thousands of stores nationwide like Home Depot — received 85% of its inventory prior to tariffs, Zoldan said. "There could be a few minor changes, but for the most part, our prices are stable with the last year," he said. "Now, going into next year that's another story." State of play: Industry leaders say they need an exemption like the one President Trump granted in 2019 to move forward with planning for 2026 and beyond. "Thirty percent is not sustainable — not going into what we think will be the biggest celebration, consumption of fireworks ever on record," Heckman told Axios. "This isn't political for us," Heckman said. "We support the president 100%, and themajority of firework entities and their customers — the folks coming in to celebrate Independence Day — they are his base." The other side: The White House pushed back on the fireworks industry's plea for tariff relief. "Real prosperity and patriotism isn't celebrating the independence of our country with cheap foreign-made firecrackers and trinkets," White House spokesman Kush Desai said in a statement to Axios. "It's having a country with booming Main Streets, a thriving working class, and robust manufacturing." Yes, but: Heckman said moving fireworks production stateside is impossible, especially for 2026. "Even if we brought some manufacturing back to the U.S., it wouldn't be optimal," Heckman said, noting it's highly dangerous, labor-intensive and regulated. "We could never produce the volume the U.S. relies on for celebrating Independence Day." What's next: Heckman said her organization has been advocating on Capitol Hill and has a meeting in late July with the U.S. Trade Representative's office. "Right now, we're at a standstill," Zoldan said of the fireworks industry. "We're getting close to the point where we have to place our orders for next year, and they have to start manufacturing right after Labor Day." Zoldan said any delay past Labor Day for submitting orders means a certain percentage won't be manufactured in time to get to America.
Forbes
an hour ago
- Forbes
Avolta Grows Retail Footprint As Per-Head Spending Lags Traffic Growth
Xavier Rossinyol: 'We are convinced that a high level of geographical diversification is key ... More for the resilience of the group.' A presentation from the world's biggest travel retailer, Avolta, has highlighted a negative trend in the global travel retail market: growth in spend per passenger (SPP) is not keeping up with the number of travelers taking to the skies—with duty-free store owners and their airport landlords still not doing enough to reverse the trend. Avolta—whose revenue hit 13.5 billion Swiss francs ($15.3 billion), up by 6.4% last year—held a Capital Markets Day on Thursday in Barcelona for the first time in three years. The company, whose brands include Autogrill, HMSHost, and Hudson, shared that while like-for-like growth between 2023 and 2025 was 4-5%, SPP only rose by 2-3%. Particularly hard hit have been product categories such as alcohol and watches/jewelry, both currently in negative territory. From 2022, a Covid-19 bounce-back year when SPP jumped by 17%, it fell to 5% in 2023, and 3.2% last year. The first quarter of 2025 was stable, but not great, at 3%. This compares to airline association IATA data showing passenger growth rates over those same three years as 64%, 37%, and 10% respectively, where 2024 was 3.8% above pre-pandemic levels for the first time. Airports are where Avolta derives more than 80% of its revenue. Key nationalities impacting global SPP Part of the negative impact of lower SPP growth has come from fewer high-spending Russian and Chinese passengers traveling globally due to sanctions and post-Covid caution, respectively. Duty-free retailers reliant on these nationalities have seen their SPPs decreasing, Importantly, about one-third (34.4% currently) of Avolta's like-for-like growth comes from SPP, and two-thirds from passenger growth. It therefore makes more sense to expand into new travel locations which is exactly what has been happening in recent years: for example, in the United States at New York's John F. Kennedy Airport and elsewhere. At the presentation, Xavier Rossinyol, CEO of Avolta, said: 'We are at the mid-point of the strategic plan, Destination 2027, that we presented to the equity markets in September 2022. We are convinced that a high level of geographical diversification is key to the resilience of the group. We are growing with new concessions and new countries in every one of our four regions.' Between 2022 and 2024, Avolta also secured contract renewals at a high rate of 95%. Airport landlords' concerns are not necessarily the same as retailers but Avolta's scale and data sharing approach is yielding results in the way it has managed to retain business with relative ease. Airport operators are also hyper-focused on their customer experience ratings, and retail is one of the most visible and tangible aspects of this for a passenger. Avolta makes headway in Denmark The latest win for Avolta has been in Denmark, where it has just been awarded a five-year food and beverage (F&B) contract in Copenhagen Airport's Terminal 3 expansion covering five new units. The retailer has been at the airport—which processed 30 million passengers last year, still marginally below 2019—for nearly 20 years and currently operates five units including Copenhagen Coffee Lab, Neighbourhood Pizza, and Burger King. Avolta has added new retail space at Copenhagen Airport's T3 extension. Switzerland-based Avolta is an industry bellwether. By revenue, the company was almost double the size of its nearest rival last year and it is also one of just two (the other being Lagardère Travel Retail (LTR), which is now in a leadership transition phase), that operates across the main travel spheres: airport, trains, cruises/ports, downtown, and highways. The company left out borders, also a key channel, in its assessment. The next nearest travel retailer is China's CTG Duty Free Group which has seen declining revenue in recent years. In 2024, sales fell to 56.5 billion Chinese Yuan, or about $7.9 billion in 2024 (based on last year's average FX rate). France's LTR ranks third at $6.1 billion, but grew faster than its Swiss rival last year. Avolta has managed to strengthen its balance sheet and cut costs to build better foundations for its future. Yves Gerster, CFO of Avolta, noted: 'Avolta has a compelling equity story that combines resilience, growth, and long-term value creation.' However, as before Covid, the company is likely over-reliant on growth in global passenger traffic—another pandemic would be devastating for it and a still fragmented global industry. The Role of Data and Loyalty in Driving SPP The Gen Y and Gen Z cohorts are now in the majority, and growing. Spend per passenger, despite being another big growth driver, seems less of a priority versus new locations—something every big travel retailer is also looking at—despite the brag from Avolta that SPP 'is increasing thanks to the company's sharpened commercial focus.' But when it is growing at only half the rate of traffic growth this is not a win, even if competitors may not be doing as well. Naturally, the drive to add more market share is enticing, and Rossinyol is lured by a huge untapped traveler market and the buoyant future forecasts for passengers. For example, airports association ACI says numbers will exceed 12 billion in 2030, up from 9.5 billion last year. To his credit, Rossinyol is now heavily pushing the data side of the business and has revamped the loyalty scheme Club Avolta for this purpose and to drive SPP. As the largest duty-free retailer 'we have the possibility to access more data than anybody in the industry.' He added: 'Are we doing everything we should be doing? No,' he admitted. 'We are still at an early stage… but we are much better placed today than three years ago.' With Gen Y and Gen Z accounting for more than 60% of travelers, comparing prices is very much the norm because a good price still remains a top priority for them, and other travelers, at airports according to Avolta's data. So SPP will continue to fall if duty-free operators don't address this and/or can't meaningfully engage with them on other levels such as local sourcing, product heritage and authenticity, as well as value. At the meeting, Avolta reaffirmed its medium-term outlook of organic growth at between 5% and 7%, with core Ebitda margin improvements of 20-40bps. More stories and information about Avolta can be found by following this link.
CNBC
an hour ago
- CNBC
M&A deals hit 20-year low in first half of 2025: Mergermarket
M&A deals hit a 20-year low in the first half of this year with 16,663 deals announced, according to Mergermarket. Despite that, deal volume actually rose - up 25% to $2 trillion, buoyed by a flurry of mega deals across U.S. tech, Chinese banking and Japan's auto sector. Lucinda Guthrie, Head of Mergermarket, joins Silvia Amaro to discuss the group's H1 M&A report.
