Market review last week:
Last week (02.28-03.04), the social service sector (Shenwan) rose 2.30%, the Shanghai Composite Index fell 0.11%, the Shenzhen Component Index fell 2.93%, and the Shanghai and Shenzhen 300 fell 1.68%. The social service sector outperformed the Shanghai Composite Index by 2.41 percentage points last week, ranking fifth among the weekly increases and decreases of Shenwan’s 34 primary sub industries.
Core view:
According to Dow Jones quoting informed sources, China is preparing for possible reopening, studying the closed-loop bubble mode during the Beijing Winter Olympics, collecting data on new antiviral drugs, and looking for locations for future overseas production of domestic mRNA vaccines. It also pointed out that the epidemic prevention and control measures may not be relaxed before next spring, but opening measures will be explored in designated cities as early as this summer. From the perspective of China’s situation, on February 18, the national development and Reform Commission and other departments issued several policies on promoting the recovery and development of difficult industries in the service industry, which also put forward the “Five Prohibitions”. The requirements for “accurate epidemic prevention” are also expected to reduce the impact of isolation and travel restrictions on the consumption scenes of tourism, duty-free, catering, hotel and other industries. On the whole, the epidemic situation in some parts of China has been repeated. However, the national capacity in treatment, prevention and control has also been significantly improved, and the road to recovery is not smooth. However, in the long run, the trend of the epidemic situation is still uncertain, and the expectation of Opening-up measures has also increased. At the same time, tourism, tax exemption, catering, hotel and other sub sectors, as industries greatly impacted by the epidemic, have implemented relief policies including tax relief in the early stage. At present, the two sessions are being held, which is also expected to usher in further policy support. We believe that the current opening-up measures can be expected. The superimposed policies form support for tourism, duty-free, catering, hotel and other industries. The overall prosperity of the industry is expected to accelerate the repair. The road to recovery is not smooth, but the long-term trend is still good.
Company announcement and industry information:
Anhui Jiuhuashan Tourism Development Co.Ltd(603199) : through block trading, Jiarun Jindi reduced its holdings of 2010000 tradable shares with unlimited conditions, accounting for 1.82% of the total share capital of the company Huatian Hotel Group Co.Ltd(000428) : the state owned assets supervision and Administration Commission of Hunan Provincial People’s government, the actual controller of the company, agreed in principle to transfer Huatian Hotel Group Co.Ltd(000428) 3248% of the equity held by Xingxiang holdings to Hunan Hotel Tourism Development Group Co., Ltd. free of charge Utour Group Co.Ltd(002707) : the company plans to reduce its repurchased shares through centralized bidding within six months after 15 trading days from the date of disclosure of the announcement of the reduction plan, and the number of shares reduced shall not exceed 181266 million.
Investment suggestions:
Duty free industry: we are optimistic about the relatively clear recovery trend of the duty-free industry supported by the recovery of passenger flow. The related targets are China Tourism Group Duty Free Corporation Limited(601888) , which is expected to show a recovery in revenue and profit after the recovery of passenger flow.
Hotel Industry: the upgrading of industry structure and chain trend are obvious, the leading hotel group has obvious brand, scale and management advantages, and there is good growth space in the future. Related targets include leading enterprises Shanghai Jin Jiang International Hotels Co.Ltd(600754) , Btg Hotels (Group) Co.Ltd(600258) , Huazhu group.
Catering and Tourism: the trend of industry chain is obvious, and attention is paid to the expansion and business performance of leading catering enterprises. The relevant targets include seabed fishing, sipping and sipping.
Risk tips:
Repeated epidemic impact; Macroeconomic fluctuations; Policy supervision risk.
