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浙商证券24Q4社服行业业绩前瞻:总量平稳、结构筑底、创新加速

Zheshang 24Q4 social service Industry performance forecast: stable overall, structural bottoming, innovation accelerating.

Zhitong Finance ·  Jan 16 08:03

The offline big cycle is approaching, with macroeconomics, pricing, and Consumer policies providing support. Innovation drives this round of transformation in the service Industry, and the upgrade of experience drives sales efficiency and profits beyond expectations.

According to Zheshang, the Research Reports indicate that a large offline cycle is approaching, with macroeconomic factors, price levels, and consumer policies providing support. Innovation is driving this round of changes in the social and service industry, with upgrades in experience driving unexpected improvements in efficiency and profitability; leisure trends remain strong, with traffic concentrating on platforms, stabilizing the OTA landscape, and maintaining continuous growth and profitability. Attention should be paid to the increase in passenger flow from project expansion and traffic improvements in scenic areas by 2025; the hotel sector has entered a cyclical bottom, and there is a positive outlook on strategic adjustments and the enhancement of efficiency through inventory and renovation. Multiple players are accelerating their entry into local life, but it remains difficult to shake MEITUAN-W's core advantages in the short term, with local online demand gradually being released, and instant retail competition being intensified. The comprehensive e-commerce national supplement in Q4 2024 is expected to catalyze a mild recovery, focusing on the quality of supply-side merchandise and the construction of merchant ecosystems.

Zheshang Securities' main points of view are as follows:

Travel chain: Entering the travel off-season in Q4, the total travel volume for the year has fully recovered.

According to the Ministry of Culture and Tourism, from Q1 to Q3 2024, the number of national tourist visits reached 4.237 billion, a year-on-year increase of 15.3%, with total expenditure of 0.435 billion, a year-on-year increase of 17.9%. Compared to 2019, except for a lower recovery in the first quarter, the visitor numbers for Q2 and Q3 have already recovered to 100.5% and 99.2% of 2019 levels, respectively, and tourism revenue has recovered to 114.4% and 103.9% of 2019 levels. The recovery rates for visitor numbers and revenue during the 2024 National Day holidays are expected to be 110.2% and 97.9%, respectively, and we anticipate that travel volume and income in Q4 2024 will also return to the same period in 2019.

The diversification and infiltration of domestic populations are contributing to growth, with outbound tourism exceeding expectations. The upgrading demand for travel among young people has shortened travel distances, and the growth rate of tourism in lower-tier markets is impressive, with counties outperforming third and fourth-tier cities and second and first-tier cities; the variety of attractions is increasing, and the popularity of ice and snow tourism continues to rise. Cross-border travel is rapidly recovering, with 0.16 billion inbound and outbound trips in Q3 2024, a year-on-year increase of 30.1%, of which 0.079 billion are from mainland residents, a year-on-year increase of 27.6%. Overall cross-border trips have recovered to 95% of 2019 levels, and with the recovery of transportation capacity, growth in inbound and outbound travel is expected to remain in double digits in Q4.

Core scenic areas outlook: In Q4, visitor traffic differentiation is expected, with high popularity in ice and snow tourism while traditional scenic areas enter the off-season.

The ice and snow tourism season has entered its peak, with the Harbin Ice and Snow World opening attracting young crowds from the south, benefiting ice and snow tourism scenic spots. The related search popularity for ice and snow tourism on the TONGCHENGTRAVEL platform has increased by over three times month-on-month, and visitor flow to Changbai Mountain Tourism in Q4 has increased by 26.5% year-on-year.

Offline Retail: The offline big cycle has arrived, and same-store sales in Q4 are expected to recover. Offline customer flow lags behind online, with revenue pressure in the first three quarters.

From January to November 2024, the cumulative year-on-year growth of social retail is +3.5%, slower than the growth rate in 2023. At the same time, online retail sales of physical goods have accumulated a year-on-year growth of +6.8%, and the gap between online and offline sales is widening. In terms of retail formats, cumulative growth has declined, with department stores expected to experience continuous negative growth in 2024. Leading companies are affected by industry β, with leading retail companies' revenue and profits in decline in Q3 2024.

The most pessimistic moments may be in the past, with same-store sales expected to improve marginally. Compared to 2023, CPI declines in 2024 have narrowed. CPI affects the retail price end, thus impacting same-store sales. Policies in various regions are intensifying the issuance of consumption vouchers, releasing a multiplier effect, which is likely to boost average transaction prices. Once the CPI enters an upward channel, same-store sales will also improve marginally.

Transformation of offline new formats, upgrading of Commodity and experiences. Offline retail is shifting from traffic to stock, and innovation is a necessary condition for this round of the offline cycle. Pangdonglai's support for Yonghui Superstores and Bubugao has comprehensively improved the quality-to-price ratio of Commodities and service quality, doubling customer flow, and the adjustment of store sales continues to exceed expectations; Jiajiayue Group and others have also launched comprehensive reforms, moving from KA to direct procurement, and increasing baking categories; Chongqing Department Store focuses on a dual reform approach of quality supermarkets and fresh discount.

Dining and hotels: Demand side is disrupted, expecting policies to be intensified.

In the second half of 2024, dining demand is weakening, with year-on-year growth in social retail dining income weakening. The hotel supply expansion cycle has not yet ended. According to Hotel Home, by November 2024, the nationwide hotel room count has reached 112% of 2019 levels. Under supply expansion pressure, although leisure demand remains buoyant in 2024, hotel GMV has not shown significant decline, but RevPAR remains in a phase of monthly decline.

Local life: Multiple players are accelerating their entry, and it is difficult to shake MEITUAN-W's core advantages in the short term, with competition in instant retail intensifying.

The demand for service consumption is continually growing, and there is ample penetration space in the local life industry. In the first three quarters of 2024, the per capita service consumption expenditure of residents nationwide was 9,694 yuan, a year-on-year increase of 7.6%, which is 2 percentage points faster than the growth rate of per capita consumer expenditure. From January to November 2024, the cumulative growth rate of commodity retail stood at 3.2%, while the restaurant income of enterprises above designated size registered a cumulative growth rate of 5.7%, indicating that service consumption is growing faster than commodity consumption.

Many players are increasing investments to tap into growth in the retail space, while MEITUAN maintains its competitive edge. In September 2024, Xiaohongshu expanded its food group buying service from 5 cities to 49. During the November 11 Shopping Festival-Related in 2024 (from November 7 to November 11), the GMV of Kuaishou's local life grew by 600%, with the average daily payment users increasing by over 50% year-on-year. Starting from December 2024, Douyin's local life will begin testing integration with Gaode Map to mutually drive traffic. Looking ahead at the long-term competitive landscape, MEITUAN will continue to solidify its basic customer base of small and medium-sized businesses, while Douyin focuses on large clients, and both parties are expected to share the expansion of the local industry.

Instant retail adds growth to local online retail, and the profitability potential of the front warehouse model is promising. The platform-type MEITUAN flash purchase advantage continues to strengthen, with front warehouses surpassing the store model to become the mainstream for expansion and store opening. The industry's trend is shifting from being 'complete' to being 'excellent', with major brand businesses entering to enrich and enhance commodity supply. The self-operated profit model is gradually becoming viable, and by the end of 2024, Hema announced it had achieved double-digit growth on the basis of nine consecutive months of overall profitability.

Comprehensive e-commerce: In Q4 2024, national subsidies catalyze a mild recovery, focusing on the supply side quality line.

From September to October 2024, the growth rate of the total retail sales of consumer goods rebounded month-on-month, primarily driven by national subsidies for automobiles, the old-for-new replacement of home appliances, and the issuance of consumer vouchers. In September and October 2024, the year-on-year growth rates of the total retail sales of consumer goods were 3.2% and 4.8%, respectively, with month-on-month increases of 1.1 percentage points and 1.6 percentage points respectively.

Under the catalysis of national subsidies, a mild recovery was observed during the November 11 Shopping Festival-Related, with home appliances being the category contributing the highest share to GMV. JD.com and Alibaba fully benefited, while PDD Holdings and Douyin saw limited benefits. According to Star Map data, the total sales volume during the November 11 Shopping Festival-Related in 2024 reached 1,441.8 billion yuan, with comprehensive e-commerce/live e-commerce sales totaling 1,109.3 billion yuan/332.5 billion yuan, representing year-on-year increases of 20.1%/54.6%. In terms of categories, sales of household appliances contributed the most, reaching 16.3%, with a growth of 26.5%.

It is recommended to pay attention to the symbols.

Offline retail: Yonghui Superstores (601933.SH), Chongqing Department Store (600729.SH), Jiajiayue Group (603708.SH), Suning.com (002024.SZ), Chengdu Hongqi Chain (002697.SZ); Local life: MEITUAN-W (03690); E-commerce: Alibaba-W (09988); Dining and hotels: Tongqinglou Catering Corporation (605108.SH), BTG Hotels (600258.SH), Shanghai Jin Jiang International Hotels (600754.SH), H World Group (01179); OTA platforms: TRIP.COM-S (09961), TONGCHENGTRAVEL (00780); Scenic spots: Xiyu Tourism (300859.SZ), Changbai Mountain Tourism (603099.SH); Performance: Songcheng Performance Development (300144.SZ).

Risk Warning

Consumer recovery is not meeting expectations; Industry competition is intensifying; Exchange Rates and interest rate risks; Policy and regulatory risks.

The translation is provided by third-party software.


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