Core ideas of this week:
This year’s overall consumption showed marginal improvement, but the epidemic disturbance is still in progress. The overall optional consumption has improved significantly compared with last year. However, disturbed by the outbreak of scattered epidemic and local natural disasters, some residents’ consumption confidence is still insufficient, especially the middle and low-income groups. In terms of travel, affected by several sporadic epidemics, the tourism industry has only recovered less than 60% of the top 60% of the epidemic, but the per capita tourism consumption in the first three quarters has recovered to 93% in 2019, close to the pre epidemic level; In terms of consumption, as of October, the total social zero in 2021 increased by 7.1% compared with the same period in 2019, including commodity retail / Catering increased by 8% / 0.6% respectively. The recovery of overall residents’ consumption has been significantly reflected, but due to the disturbance of the epidemic, the willingness of contact consumption such as catering has been suppressed. Optional consumption recovered significantly, jewelry and cosmetics performed prominently, the zero growth rate of social organizations above the quota was higher than that of the industry as a whole, and the Matthew effect of the industry was strengthened.
From the macro data, the overall unemployment rate has dropped and continued to improve since the peak in 2020, and has recovered to the pre epidemic level. However, the unemployment rate of the 16-24-year-old group with fresh students as the key group is high. This group ushers in the peak of unemployment rate in the graduation season from June to July every year. Although the peak of 16.2% in 21 years is lower than that in 20 years, it is still 2.3pct higher than 13.9 in 19 years, The number of graduates in 22 years is expected to exceed 10 million, and ensuring stable employment remains the focus at present and in the next few years. Meanwhile, the marginal growth rate of disposable income has improved, but it is still slower than that in 2019, and the growth rate of middle and low-income groups has narrowed more. This leads to the polarization of optional consumption: on the one hand, due to the small impact on the income of middle and high-income people, middle and high-end consumption is relatively strong, such as jewelry, duty-free and middle and high-end hotels; On the other hand, the track with low passenger unit price and high cost performance is more tenacious, such as fast food in catering.
Looking forward to 2022, consumption is expected to further improve marginally, but it is expected that the impact of sporadic outbreaks will continue, and the polarized consumption situation may continue in the short term. However, in the medium and long term, with the promotion of common prosperity and the expansion of the proportion of middle-income groups, the marginal demand for optional consumption will be promoted, and the medium and high-end and high-quality products in each track will have more potential. Focus on four major trends of industry development:
① Marginal improvement of consumer confidence, common prosperity, promotion of consumption upgrading, and focus on medium and high-end consumption. “Common prosperity” will push up the proportion of middle-income groups, which is expected to improve the overall consumption capacity of residents and stimulate the release of consumption demand, especially optional consumption demand. At the same time, the expansion of middle-income groups will also put forward higher requirements for consumption quality, promote consumption upgrading, and be optimistic about companies focusing on high-quality products or services in the corresponding track. For example, the duty-free industry dominated by medium and high-end consumption continues to increase in volume under the support of policies; In optional consumption, the beauty and jewelry industries continued to increase; Under the disturbance of the epidemic, the business performance of medium and high-end hotels is significantly better than that of the industry.
② Generation Z has gradually become the main consumer, with the rise of new consumption and high-quality domestic brands. The life and consumption concept of the new generation of young people is changing. They pay attention to new consumption patterns and new contents in line with the preferences of generation Z users, such as takeout, new tea, domestic beauty makeup, medical beauty and so on. In addition, the 14th five year plan proposes to take the lead in cultivating a number of high-end brands in the field of cosmetics and other consumer goods. With the improvement of national self-confidence and the emergence of Chinese high-quality products on the supply side, high-quality domestic cosmetics brands such as Winona and kwadi are rising, and are expected to gain a place in the international market in the future.
③ The international travel market is expected to enter the recovery channel, but it will take time for travel confidence to recover. Normalization of epidemic prevention and control. Under the background of increasing vaccination rate, global epidemic mitigation and improving drug effectiveness, some regions are expected to open their borders in stages to promote the recovery of international tourism. In November, the United States reopened its borders and opened travel visas to many countries. China is also expected to partially open its borders under certain conditions in 2022. However, considering China’s better epidemic prevention achievements, it will still take some time for Chinese people’s confidence in outbound tourism to recover.
④ Policies help accelerate the development of human resources services and vocational education. The human services industry has both policies and market foundation. The talent market is changing from demographic dividend to talent dividend, and medium and high-end talent service institutions have ushered in structural opportunities; The epidemic situation deepens enterprises’ understanding of flexible employment mode. Driven by the improvement of policies such as finance, taxation and industrial injury insurance, the flexible industry will enter the stage of accelerated development. The multi-dimensional policy promotion of Vocational Education in the entrance of students, education and teaching and employment export is expected to promote the quantity, quality and social recognition of students in vocational education. In the future, with the deepening of policies, University groups with higher school running levels and levels will have more advantages.
Industry recovery: the Shanghai Composite Index closed at 3564.09, up or down 0.10% on a weekly basis; The Shenzhen Component Index closed at 14777.17 points, up or down 0.17% on a weekly basis; CITIC consumer service index closed at 10710.39 points, up or down – 4.50% in the week; CITIC retail trade index closed at 4033.39, up or down 1.15% for the week. The rise and fall of each sub sector of social services are as follows: other leisure services – 1.79%, catering – 1.68%, scenic spots – 2.79%, hotels – 5.27% and comprehensive tourism – 5.97%; The rise and fall of each sub sector of Commerce and retail are as follows: Trade 4.77%, general property operation 3.96%, professional chain 3.01%, department store 1.38%, multi industry retail – 1.12%, supermarket – 1.38% and professional market – 1.52%.
Key reports focus on:
China Tourism Group Duty Free Corporation Limited(601888) : the short-term performance is disturbed by the epidemic, and the long-term space for tax-free leaders is broad, October 31, 2021
Cosmetics industry: how to build a century old enterprise for domestic Aromatherapy 2020-12-04
Hotel Industry: what is the growth space for medium and high-end hotels under the rapid expansion 2021-01-04
Higher education industry: analysis of investment opportunities of private universities from four dimensions 2020-11-17
Tracking history: embracing flexible employment, scale and technology are the core of future competition 2020-03-05
Key recommendations: China Tourism Group Duty Free Corporation Limited(601888) , Btg Hotels (Group) Co.Ltd(600258) , Shanghai Jin Jiang International Hotels Co.Ltd(600754) , Beijing Career International Co.Ltd(300662) , Syoung Group Co.Ltd(300740)
Long term recommendation: Offcn Education Technology Co.Ltd(002607) , Guangzhou Restaurant Group Company Limited(603043) , Lao Feng Xiang Co.Ltd(600612) , Chow Tai Seng Jewellery Company Limited(002867) , Shanghai Jahwa United Co.Ltd(600315) , Proya Cosmetics Co.Ltd(603605)
Risk tip: the epidemic situation rebounded in some areas, and the economic recovery was less than expected and exceeded the expected policy.
