According to the Zhitong Financial APP, China International Capital Corporation released a research report stating that the 1H24 performance of tourism companies basically meets the previous expectations. During the summer, there is pressure from the high base, and the recovery of tourist attractions varies, with relatively pressure on per capita spending. Huangshan's ticket sales per capita in H1 decreased by 18% due to the impact of free ticket activities. Refinement of operations, product and marketing innovations drive customer traffic. Sanya Atlantis continues to enrich its non-room offerings, with enriched performances, weddings, and other experiential activities to attract a diverse customer base. Non-room revenue in H1 accounted for 49% of total revenue, an increase of 4 percentage points year-on-year, and adjusting the per capita spending appropriately to attract customer traffic; projects in Shanghai and Sanya are undergoing park renovations and upgrades, and attracting traffic through enriched IP joint activities and diversified channel cooperation. The Zhangjiajie project is developing the study tour market to cope with competition.

The 1H24 performance of tourism companies basically meets the previous expectations.

Summarizing the 1H24 performances of travel enterprises, Songcheng Performance, Fosun Tourism, China CYTS Tours, Huangshan Tourism Development, Emei Shan Tourism, and Utour Group meet the previous expectations; the performance of China Travel HK is lower than the expectations of China International Capital Corporation, mainly due to a loss of 0.099 billion Hong Kong dollars in fair value of investment properties confirmed in H1. The performance of China CYTS Tours, Huangshan Tourism Development, and Emei Shan Tourism in the first half of the year compared to the previous year's decline, mainly due to the increase in fixed costs such as depreciation and amortization due to last year's high base, this year's increase in rainy weather, and project upgrades and renovations; the rapid recovery of outbound tourism has driven the rebound of Utour Group's H1 performance.

During the summer, there is pressure from the high base, and the recovery of tourist attractions varies, with relatively pressure on per capita spending. 1) The summer tourism market is affected by the high base and consumer pressure from last year, China Railway Group has shown a +7% year-on-year increase in the number of railway passengers nationwide in July and August; and Aviation Travel Horizon has shown an 8% year-on-year increase in domestic airline passenger volume during the summer travel period, with an 11% year-on-year decrease in average ticket prices (excluding tax). 2) Different attractions have shown varying performances: in the attractions under Songcheng Performance, China International Capital Corporation estimates that during the summer, the number of visitors and ticket revenue for the Xi'an project more than doubled year-on-year, while the number of performances in the Foshan project remained high, but performances for projects in Hangzhou, Lijiang, and Zhangjiajie declined year-on-year; Huangshan and Changbai Mountain received approximately 7% more tourists in July and August; China International Capital Corporation estimates that Wuzhen and Gubei Water Town are under pressure from last year's high base, leading to a year-on-year decrease in customer traffic. 3) This year, there is some pressure on per capita spending: Huangshan's ticket sales per capita in H1 decreased by 18% due to the impact of free ticket activities; the average daily room price in Atlantis decreased by 15% in H1; the per capita consumption of Wuzhen and Gubei Water Town decreased by 5% and 11% respectively in H1.

Refinement of operations, product and marketing innovations drive customer traffic. Sanya Atlantis continues to enrich its non-room offerings, with enriched performances, weddings, and other experiential activities to attract a diverse customer base; non-room revenue in H1 accounted for 49% of total revenue, an increase of 4 percentage points year-on-year, and adjusting the per capita spending appropriately to attract customer traffic (H1 average room occupancy rate reached 89.6%, with 3.435 million visitors, both reaching historical highs). Songcheng actively boosts its parks by relying on product innovation and diversified marketing, such as launching innovative activities like night tours to attract a younger customer base; projects in Shanghai and Sanya are undergoing park renovations and upgrades, and attracting traffic through enriched IP joint activities and diversified channel cooperation; the Zhangjiajie project is developing the study tour market to cope with competition.

The rapid recovery of outbound tourism, with a focus on the elastic performance of Utour Group. FlightAI data shows that during the summer travel period, cross-border market capacity and passenger volume have recovered to about 76% and 77% respectively of the same period in 2019, and Flight Butler predicts that international passenger flight volume in 2H24 will recover to about 82.7% of the same period in 2019. Utour Group's wholesale income in H1 has recovered to about half of 2019, and retail GMV has exceeded 20-30% of the same period in 2019, suggesting attention to performance elasticity.

Profit forecast

Some companies have adjusted their profit forecasts.

Valuation and Recommendations

Pay attention to the industry and individual stock fundamentals trends and potential catalysts. It is recommended to focus on songcheng performance development (300144.SZ), huangshan tourism development (600054.SH), and utour group (002707.SZ).

Risk

Domestic tourism visits and revenue growth are below expectations; the recovery of scenic spot visitor flow and revenue is slower than expected.