Report summary
Industry views and investment suggestions
This week, the A-share index continued to differentiate, with the Shanghai index rising 3.02% and the gem falling 5.59%. After the Spring Festival, stimulated by multiple positive factors and affected by the expected recovery of the industry as a whole, the social service industry continued to rise and outperformed the market as a whole. Outbound tourism, hotels, duty-free and scenic spot stocks generally achieved high growth.
From the perspective of China, the epidemic control has improved after the Spring Festival, and the first tier cities have basically returned to zero. The existing epidemic is mainly concentrated in low tier cities, with little impact on tourism. With the reduction of medium and high-risk areas, the current relatively strict epidemic prevention policy will be gradually relaxed, and the cross provincial flow of people will be more sufficient, which is conducive to the recovery of China’s tourism industry. It is expected that there will be obvious policy relaxation after the Winter Olympics and the two sessions.
From overseas, although the Omicron strain is highly infectious, it has low severe and mortality. At the moment of International Vaccine popularization, some countries gradually relax the entry policy. Australia announced that it would open its borders to people fully vaccinated with covid-19 vaccine from February 21, and many European countries would significantly relax or even completely cancel China’s epidemic prevention restrictions from early February to promote the strategy of coexistence with the virus. China’s entry policy also began to show signs of loosening. On February 9, China and the UK agreed to conduct a two-week flight test in mid February. The flight between Heathrow and Pudong airport was grounded at the end of 2020. So far, more policies and measures for reopening may be introduced in the later stage.
On February 11, the China food and Drug Administration approved Pfizer’s oral drug for covid-19 with emergency conditions, which contributed to China’s epidemic prevention and control. The drug can be used to treat adults with mild to moderate New Coronavirus pneumonia (COVID-19) with severe risk factors. It can reduce the risk of severe or death by 89%. Mild patients can take oral medication at home and provide new treatment options for patients with COVID-19 virus infection, and continue to benefit the overall recovery of the tourism industry.
Investment suggestion: continue to be optimistic about the development space of China’s tax-free industry and continue to recommend China Tourism Group Duty Free Corporation Limited(601888) . In addition, the industry leaders of fine molecules Beijing Career International Co.Ltd(300662) , Btg Hotels (Group) Co.Ltd(600258) , Songcheng Performance Development Co.Ltd(300144) are recommended.
Plate Market
In the current period (from February 7 to February 11), the leisure service industry index rose by 4.88%, and the CSI 300 index rose by 0.82% in the same period. The leisure service industry index outperformed the CSI 300 index by 4.06pct, ranking 14th among the 28 Shenwan industries..
Risk tips: systemic risk, epidemic risk, policy promotion, lower than expected business conditions and other risks.
