...HONG KONG (S&P Global Ratings) March 16, 2023--China Tourism Group Corp. Ltd. (CTG) is cementing its dominance in China's duty-free retail market. The company's majority-owned subsidiary, China Tourism Group Duty Free Corp (CTGDF), will buy a 49% stake in competitor China National Service Corporation for Chinese Personnel Working Abroad (CNSC), paying Chinese renminbi (RMB) 1.2 billion with cash on hand. CTG (A-/Stable/--) has a more than 90% share of China's duty-free retail market. CNSC comes a distant fourth. Adding a stake in this rival is likely to be modestly positive for CTG's credit profile. But it could also increase the company's regulatory risk, given its existing market power. CNSC operates 12 inbound downtown duty-free stores. CTG's stake, through CTGDF, will indirectly extend its exposure to inbound downtown duty-free retail. In the long-term, this may position the company to further expand in downtown duty-free retail, possibly in conjunction with CNSC. CTG has a full set...
