Resumption of plate 01: affected by the epidemic situation, the dawn of resuming the Soviet Union in the shock is approaching
Year to date growth: according to the industry classification of CITIC, the social service sector has fallen 23% year to date in 2021, and the growth is the last among the 30 sub industries.
From the perspective of trend: after June 2021, due to the repeated impact of the epidemic, the plate entered a deep correction, and the increase lagged behind the market; Since December, the plate has rebounded and the bottom support is obvious.
Specifically, for each sub industry: the hotel / human resources service industry has increased by 11.0% / 11.7% year to date respectively, which are the two sub sectors with better performance.
Segment revenue / performance: 21q1-3 consumer service segment achieved a total revenue of 121.694 billion yuan / yoy + 28.57%, a decrease of 10.55% over the same period in 2019; The net profit attributable to the parent company amounted to RMB 8.853 billion / yoy + 117.73%, a decrease of 31.00% over the same period in 2019
Sub sections: People’s clothing / natural scenic spot / duty-free / leisure scenic spot / Catering revenue growth leads, and leisure scenic spot / duty-free / Catering / natural scenic spot / hotel net profit growth leads.
02 overall trend: the dawn of recovery is gradual, and new changes are bred in twists and turns. Section: the tax-free boom continues, the recovery of hotels / scenic spots / catering is gradual, and tea drinks/
Trend 1: the policy repression under the repeated epidemic situation constitutes a direct impact on many sub industries of the social service sector. The recovery expectation in the year first collapses and then repairs in the shock. The biggest feature of this year’s sector is that the epidemic situation repeatedly collapses the recovery expectation formed since the second half of last year, resulting in plate shock: mainly due to China’s implementation of the epidemic prevention policy of “joint prevention and control and dynamic clearing”, In the face of repeated epidemics, it has formed a phased inhibition on offline travel and a direct suppression on the demand side / performance side of multiple sub industries such as hotels / scenic spots / duty-free / catering.
With the maturity of the epidemic prevention and control mechanism, the epidemic can be controlled within one month, forming a new expected end, and the recovery expectation is expected to accumulate again on this basis: Taking the hotel sector as an example, there are signs of passivation in the repeated impact of the epidemic on the industry occupancy rate / stock price, and the pivot in the valuation of the sector continues to repair in shock; If the new Omicron strain cannot impact the previous epidemic prevention framework (i.e. the transmission chain can be tracked / controlled in the short term), it is optimistic about the recovery and is expected to continue the repair trend.
Trend 1: the progress of overseas recovery / specific drugs is an important catalyst, and the adjustment of domestic epidemic prevention policy framework may be the decisive factor for the recovery of plate demand
With the continuous improvement of covid-19 vaccination rate in major countries, developed countries, especially the United States / Britain / Singapore, take the lead in relaxing epidemic control; The practical effect of relaxing epidemic prevention measures abroad will provide reference for China’s follow-up anti epidemic policy adjustment. For example, the overseas follow-up covid-19 mortality continues to weaken, and the production and life of residents accelerate the recovery, which is expected to catalyze China’s recovery expectations.
Covid-19 specific drug can effectively reduce the mortality under the epidemic situation. Although the promotion process / popularity is not clear, it strengthens people’s expectation that the follow-up drugs are effective and can be popularized; At present, the research and development of covid-19 specific drugs in China has also been continuously promoted, and a variety of candidate drugs have entered the clinical and experimental stage.
03 new business formats such as coffee / pub are active, and the “track” of human service / vocational education is increasing
Tourism consumption in Hainan: the per capita consumption of tourists is increasing, Hainan’s policy is improving, and the market development prospect is good
Focus on the layout of the airport: phase II of Haikou Meilan Airport has been put into use, and “two main, two auxiliary and one freight” is under construction to ensure the traffic volume of tourists in the future
According to China civil aviation magazine, phase II of Haikou Meilan Airport was officially put into operation on December 2, which is expected to meet the passenger flow of 35 million person times. T2 terminal has a duty-free commercial area of nearly 10000 square meters. Looking forward to the future, according to the comprehensive transportation plan of Haikou Province during the 14th Five Year Plan period and the rectification of the implementation of the central ecological and environmental protection supervisor in Hainan Province, Hainan’s driving points in airport transportation include accelerating the construction of Danzhou airport, the reconstruction and expansion of Boao airport, the construction of Dongfang airport, the phase III expansion of Meilan Airport, the project approval of Sanya new airport and the application for sea use. Hainan is focusing on building the layout of “two main, two auxiliary and one freight”. According to the Hainan Department of tourism, culture, radio, television and sports, it is expected that the transportation support capacity of the province will be increased to 62 million people / year.
Before August this year, the passenger flow of overnight passengers was relatively stable, and the number of one-day tourists fluctuated greatly. According to the data of Hainan Provincial Bureau of statistics, as of August 2021, the monthly number of overnight passengers in China hovered between 4.7-5.5 million. Due to the reduction of epidemic control in August and September, it was back on track in October; The number of one-day tourists reached its peak in February this year, decreased in June, July and August, and reached its peak again in October.
The total growth rate of passenger income is greater than that of passenger flow, and the unit price of tourists per month increases.
We believe that the increase in per capita tourism consumption in Hainan is due to the strengthening of the overall average unit price of duty-free products and consumer consumption, which is expected to be maintained in the future.
04 investment strategy: grasp the recovery rhythm / long-term trend and lay out high-quality leaders
Four main investment lines in 2022: 1) grasp the main line of consumption internal circulation and lay out tax-free leaders; 2) Grasp the post epidemic recovery window and layout the targets with high performance flexibility; 3) Grasp the localization trend of social service consumer brands and layout high-quality brands; 4) Focus on the “track” of spiritual work / vocational education with continuous expansion under the support of policies
1. Grasp the main line of internal consumption cycle and lay out tax-free leaders: internal consumption cycle is not only the objective situation under the interruption of transnational travel under the covid-19 epidemic, but also the long-term policy guidance of the country; Focus on recommending China Tourism Group Duty Free Corporation Limited(601888) , a tax-free leader with multiple advantages such as scale / supply chain / Channel / first mover / operation and a stable market position. We are optimistic about the performance increment brought by the subsequent airport rent reversal, the deepening layout of online and offline channels, and the implementation of City store policies.
2. Grasp the recovery window after the epidemic and lay out the target of high performance flexibility: the periodic suppression of travel by policies under the current epidemic situation in China is the direct factor of pressure on the demand side and performance side of hotel / Tourism / Catering / offline consumption formats. In the follow-up, with the spread of vaccines / the launch of specific drugs and the possible relaxation of the control of China’s anti epidemic system, the demand of the above industries is expected to achieve a highly elastic recovery. We mainly recommend Shanghai Jin Jiang International Hotels Co.Ltd(600754) + Btg Hotels (Group) Co.Ltd(600258) as the leading target of hotels at the bottom of the cycle / with stable long-term growth logic, we suggest paying attention to Zhejiang Ssaw Boutique Hotels Co.Ltd(301073) of Huazhu group, and we recommend Songcheng Performance Development Co.Ltd(300144) as the target of leisure scenic spots, It is recommended to pay attention to Jiangsu Tianmu Lake Tourism Co.Ltd(603136) + China Cyts Tours Holding Co.Ltd(600138) ; It is also suggested to pay attention to Haidilao + jiumaojiu, the catering leader that is expected to be repaired / new brand & new business type after the epidemic.
3. Grasp the localization trend of social service consumption brands and lay out high-quality brands: with the improvement of residents’ income level and the strengthening of national consciousness, generation Z begins to move towards economic independence, and the local culture will re demonstrate its voice in lifestyle / social service consumption. It is optimistic that a number of local brands will emerge through product / format / marketing innovation in the “track” of new tea / coffee / pub. It is suggested to pay attention to Naixue’s tea, a new tea drinking leader with high brand potential, and Helen’s, a leader of chain taverns in the period of rapid expansion.
4. Pay attention to the “track” of flexible labor / vocational education that continues to expand under the support of policies: with the slowdown of China’s economic growth and the increase of employment pressure, flexible employment and vocational education are important means to alleviate the employment contradiction. The current policy environment is continuously optimized and the subsequent boom is expected to continue. We recommend the leading target of flexible employment Beijing Career International Co.Ltd(300662) and suggest paying attention to the leading target of vocational education Offcn Education Technology Co.Ltd(002607) .
05 risk tips
1. The impact degree / scope of covid-19 epidemic exceeds the expected risk: the recurrence of epidemic in some areas leads to the risk of tightening travel policy, fusing long-distance travel and suspension of offline production and consumption;
2. Risk that the macroeconomic growth rate is lower than expected: if the macroeconomic growth rate is lower than expected, it will affect the market travel demand, slow down the recovery rhythm of the hotel industry, affect the consumer income expectation and affect the recovery of offline consumption.
3. The progress of covid-19 vaccination / specific drugs is not as expected: the vaccine is a long-term solution to combat the epidemic, and it is also an important prerequisite for the follow-up government to soften epidemic prevention policies / relax travel control; If the progress of vaccination / specific drugs is less than expected, it will slow down the recovery pace of follow-up wine and tourism industry.
4. Leading expansion / project promotion is not as expected: at present, offline consumption leaders such as hotels / restaurants / tea drinks / pubs in China take advantage of the opportunity window of industry clearance in the epidemic era to expand, which also includes leading scenic spots to promote the development of new projects. However, due to the company’s own operation and management / and the short-term impact of the epidemic, the development process of store expansion / project may not meet expectations, Affect the company’s future profit forecast.
5. Risk of policy environment change: the high prosperity of tax-free / vocational education / flexible industry depends on the favorable policy environment to a certain extent. Subsequent policy environment changes, including support weakening / turning, will have an adverse impact on the development of the industry.
6. Increased risk of industry competition: in the new offline consumption formats such as tea / tavern / coffee where the market pattern is not yet completely stable, new entrants may affect the current market pattern and erode the leading market share.
