Since this year, there has been a marked recovery in domestic tourism consumption after the epidemic. According to the “Where to Go Travel Data Report 2023” released by Where to Go, the number of domestic air ticket reservations in 2023 reached a record high, which has greatly surpassed the level of 2019; the number of hotel reservations in popular cities has increased 1.1 times compared to 2019, and the travel enthusiasm of travelers of all ages has been released, driving consumption growth in all cities.
Recently, as the New Year's Day and Spring Festival holidays approach, people have begun planning holiday trips or family visits, which has boosted the domestic and foreign tourism markets.
According to the latest “2024 New Year's Day Travel Insights” released by Ctrip, as of December 15, the total number of domestic travel orders for the 2024 New Year's Day holiday has increased more than 3 times compared to last year, hotel orders have increased more than 5 times over the previous year, air tickets have increased 205%, and holiday orders such as customized group tours have increased 240%.
According to the Shanxi Securities Research Report, benefiting from the increase in consumer travel demand, the overall travel industry chain is gradually recovering. Hotels, tax exemptions, travel, scenic spots, etc. have benefited from compensatory demand support, and the number of travelers has recovered well. Judging from a horizontal comparison, service consumption is relatively ahead of physical consumption. Also, under the premise that passenger flow picks up in catering, the recovery of performance is quite flexible.
With the double holiday season approaching, what are the specific investment opportunities in the stock market?
Travel and sightseeing
The overall tourism industry showed a moderate growth trend during the National Day and Mid-Autumn Festival this year compared to 2019. As more and more consumers are willing to pay for quality services and experiences, local lifestyle and travel platforms are receiving attention.
Judging from CITIC Securities's 2023Q3 tracking data, the trend of marginal optimization of the company's store-to-store business pattern is clear. In terms of new business, it is expected that it will dynamically evaluate competitive strategies, and it is recommended to keep track of subsequent strategic trends. As one of the scarce targets in the consumer internet sector with both restoration expectations and growth attributes, the long-term value is clear.
According to the company's 3Q23 financial report, the company's outbound hotel and air bookings have returned to 80% of pre-epidemic levels, while the industry's outbound flight volume has recovered by only 50%; the company's overseas hotel bookings have increased by more than 100% year-on-year, more than 100% over the same period in '19.
Anxin International previously released a research report saying that Tongcheng Travel's third quarter performance exceeded expectations, with total revenue reaching a record high of 3.3 billion yuan, up 61%/15% year over year, 3% higher than market expectations. The company's users in the sinking market are more mature, and future performance is expected to benefit from the increased penetration of online travel in the sinking market.
CITIC Construction Investment said that China Insurance is gradually entering a new round of property and brand implementation in Sanya, focusing on subsequent openings or promoting drainage and improving Sanya's overall tourism business environment and infrastructure environment. The Haikou Xinhai Passenger Transport Terminal was officially put into operation on November 29. 2024 is expected to focus on the policy side, the ability to adjust the entire industry chain and product structure, supply chain capabilities, overseas and other regional business development opportunities during the period of continuous transformation.
dining
On National Day not long ago, there was a long line of admired diners in the must-eat restaurant corridors around the world... According to Meituan and popular reviews, the scale of dine-in consumption in restaurants nationwide increased by 254% during the holiday season compared to 2019.
Anxin International pointed out that the Hong Kong stock market's offline catering targets are of high quality, have strong brand power within the segmented circuit, and also have strong financial strength. They have generally adopted expansion strategies during the three years of the pandemic, taking advantage of the low market to occupy a better position, and labor and rent costs have declined. Therefore, the bank believes that the recovery of these listed companies will be higher than the industry average. The current valuation level is low, and it has already entered the layout range.
Haitong International is optimistic about Haidilao's management optimization capabilities and growth space after the pace of store expansion is restored. The second half of the year focused on steady state turnoff restoration (which is expected to increase revenue & leverage profits), continued progress in hard bone plans, and store expansion plans (which are expected to boost valuations).
Also, Haidilao recently acquired the Hong Kong Japan Hotel Project, but since the transaction is a company-related party transaction, plus the acquisition project has nothing to do with its mainland hot pot business, and will involve additional investment capital, it will put pressure on profit margins and profit growth in the short term.
Yum China is the leader in the Chinese restaurant industry, clearly ahead of competitors in the fast food and pizza race. China Merchants Securities expects the Group's restaurant profit margin to increase year-on-year in the fourth quarter.
The company recently announced that it will acquire 3.24% of Tai'er Restaurant's shares for 199 million yuan. After completion of the transaction, Tai'er Restaurant's shareholding will increase from 88% to 91.24%. It was also announced that shares will be repurchased on the open market for a maximum total amount of HK$150 million. UBS believes that the increase in Jiumaojiu's holdings in Tai'er Restaurant this time will allow the group to share more restaurant profits and incentivize Tai'er's employees by allowing the monetization of Tai'er's shares.
Aviation stocks
The agency believes that China's aviation demand is resilient, that the airline's additional aircraft orders will not change the capacity reduction plan, that additional international flights will drive the recovery of supply and demand, that the profit center can be expected to rise, and that the 2024 Spring Festival travel season performance is expected to catalyze optimistic market expectations. In addition, domestic aviation is under relatively greater pressure due to high oil prices, etc., and the recovery of daily air travel may slow down.
In early December, Guotai Junan released a research report saying that the company's future profit center can be expected to rise, and that the construction of the Beijing Daxing hub will gradually optimize the air network structure and expand long-term development space. Expectations have fallen back to a low level due to market concerns about demand. The 2024 Spring Festival travel season is expected to exceed expectations, which is expected to catalyze market optimism.
Citi raised China Eastern Airlines' profit forecasts for 2023-24 by 77% and 59%, respectively, to maintain its target price of HK$3.3. It also believes that the company will benefit from the high market share of China-Japan-Korea routes. It is expected that international routes will recover faster in 2024, and the earnings of China-Japan routes will also stabilize.
Hotels & Resorts
The Galaxy Securities Research Report points out that under the catalyst of the Spring Festival holiday on New Year's Day, the performance of hotel operations may be boosted in stages. Looking at the medium to long term, the pattern of the hotel industry is improving marginally, the logic of product structure upgrades and chain rate increases has not changed, and leading hotel groups have significant advantages. Currently, the heavily adjusted hotel group's valuation is already cost-effective.
Guoxin Securities believes that as a leader in the hotel industry, the company has an excellent product and brand matrix, leading operating efficiency, and lean growth and structural upgrades to consolidate midline growth.
According to a research report released by Guangfa Securities, maintaining the “buy” rating of Fosun's tourism culture and being optimistic about the company's brand and global tourist destination layout advantages and travel and vacation ecology, the net profit of the mother is estimated to be 4.7, 7.1, and 870 million yuan respectively in 23-25, with a reasonable value of HK$14.07.
Film and television stocks
Morgan Stanley raised the mainland movie box office forecast for this year by 18% to 58 billion yuan, which means an increase of 93% over the previous year, and expects an increase of 11% to 64 billion yuan next year, completely recovering to pre-pandemic levels.
According to a research report released by Damo, maintaining Alibaba Pictures' “holdings increase” rating, the target price was raised from HK$0.61 to HK$0.68, making the valuation attractive. The Group's movie content and ticketing services are growing steadily, ticket subsidies are being rationalized, and there is healthy competition. It is also expected that Alibaba Pictures will continue to gain market share in the upstream content sector, including promotion/distribution and production/investment, while TV series will benefit from cooperation with Youku. The bank expects that the barley business acquired earlier by the Group will bring the Group a gross profit of 700 million to 800 million yuan in fiscal year 2025, which is equivalent to an increase of about 30 to 40 percentage points.
Citi published a report reaffirming Cat's Eye Entertainment's “buy” rating. The company will participate in 13 to 17 films as a major publisher in the second half of the year. “Save the Suspect” was screened on November 11, while four movies, including “The Annual Meeting Can't Stop,” “The Golden Finger,” and “Every Twinkle, Shiny Crystal,” are scheduled to be screened on December 30, which may be beneficial catalysts.
edit/ruby