The overall economic situation in China is improving and stabilizing with the government’s policy support. Traffic has been increasing steadily in between Shenzhen and Hong Kong. Since August, the borders at both Luowu and Futian have become crowded again. We noticed that the number of customers shopping in the duty-free shops has been improving significantly as well, which is indicative of the positive economic momentum.
Concurrently, there has been a significant development in the Chinese smartphone market. Huawei, one of the leading market players, surprised the smartphone industry with the launch of its latest 5G smartphone, the Mate60 Pro. Once released, it caused a sensation in the market due to its utilization of 5G chips entirely made in China, without relying on European or American technology. All Huawei stores were crowded, while other brand mobile phone stores in the same location had sparse traffic. In fact, the first and second places in terms of domestic sales market share in March were Huawei and Huawei's former sub-brand Honor. We expect that as Huawei further improves its domestic chip technology, its market share will jump back to its previous leadership position.
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