Main points
The social service industry is looking forward to recovery next year.
In 2021, the secondary market performance of social service industry was weak, which was mainly affected by policies and epidemic situation. The overall performance was poor due to the decline of education sector, catering and tourism sector. Year to date, CITIC consumer service index fell 23.64%, ranking last in all industries. From the data, although the local epidemic situation is still repeated in 2021, the travel is still warmer year-on-year, the dividend of tax-free benefit policy has increased significantly year-on-year, and the operating data of hotels and scenic spots have recovered about 80% and more than half respectively compared with 2019. At present, the social service sector is in the stage of bottom valuation and bottom recovery of operating conditions. Looking forward to next year, if the epidemic situation improves, the social service sector is expected to usher in a new era and form a high elasticity.
Tax exemption: the dividend of tax exemption policy on outlying islands continues, and the release of supply is expected to make a big cake.
In 2021, the duty-free sales of Hainan outlying islands recovered. In the first three quarters, the duty-free sales of Hainan outlying islands reached 35.54 billion yuan, a year-on-year increase of 120.8%. In the first 11 months, the sales of duty-free shopping on outlying islands in Hainan Province exceeded 50 billion yuan (23.2 billion yuan in the same period last year). The policy dividend continued to promote the rapid growth of tax-free sales on outlying islands. The 14th five year plan of Hainan Province proposes to expand the trade scale of duty-free consumer goods and strive to double the trade of duty-free goods on outlying islands by 2025. During the 14th five year plan, it is planned to attract 300 billion yuan of duty-free shopping return. We believe that in the context of expanding domestic demand and promoting consumption, tax exemption on outlying islands is expected to enjoy continuous policy dividends. At present, Hainan is accelerating the construction of duty-free shops covering the whole island, aiming to build a multi-level duty-free shopping system. We believe that this is conducive to enhancing the attraction of Hainan duty-free to brands and consumers and forming scale advantages, which is not only conducive to promoting the return of consumption, but also expected to consolidate the global competitiveness of Hainan duty-free and build a moat after the end of the epidemic in the future. It is recommended to pay attention to the duty-free faucet China Tourism Group Duty Free Corporation Limited(601888) .
Hotel: the industry pattern is optimized, and the leader is expected to fully benefit.
Since 2020, the hotel industry has been greatly impacted by the epidemic, and its operation has improved year-on-year in 21 years, but it has not yet recovered to the level of 19 years. The impact of the epidemic has led to the clearing of industrial production capacity, the withdrawal of many monomer and low-end hotels from the market, and the counter market expansion of chain brands and leading companies. According to the report on the development of China's hotel industry in 2021, in 2020, the number of mainland hotels decreased by 59000, the number of hotel rooms decreased by 2294000, and the number of chain hotel rooms increased by 166000, increasing the chain rate of China's hotel industry from 26% in 2019 to 31%. The continuous improvement of market concentration has continuously optimized the competition pattern of the industry. In addition, the high-end trend in the industry is obvious, the proportion of medium and high-end hotels continues to increase, and leading companies have also strengthened the layout of medium and high-end brands. We believe that the chain and medium and high-end of the hotel industry is a long-term trend in line with the development law of the industry. At present, there is still much room to improve the chain rate of China's hotel industry, and the high-end is also in line with the general trend of consumption upgrading. Leading companies are expected to fully benefit from this process and continuously improve market share, brand competitiveness and business barriers. If the epidemic situation is further controlled in 2022, the hotel leaders are expected to enjoy the double dividend of the recovery of demand and the improvement of industry status, and gain greater growth elasticity. It is recommended to pay attention to the hotel leaders Shanghai Jin Jiang International Hotels Co.Ltd(600754) , Btg Hotels (Group) Co.Ltd(600258) .
Scenic spot: more than half of the recovery compared with 19 years, looking forward to the improvement of the epidemic situation.
Since 2020, China's tourism industry has been greatly impacted by the epidemic. In 2021, the number of Chinese tourists has improved year-on-year, and has recovered more than half compared with 2019. According to the data of the Chinese government network, in the first three quarters of 2021, the total number of Chinese tourists was 2.689 billion, a year-on-year increase of 39.1%, returning to 58.5% in the same period in 2019. Under the repeated disturbance of local epidemics, the travel mode of Chinese tourists has changed, showing a strong localization trend. According to the 2021 national day tourism market data report released by China Tourism Research Institute, during the National Day holiday in 2021, the travel distance and recreation radius of tourists shrink. The average travel radius of tourists was 141.3 kilometers, a decrease of 71.7 kilometers or 33.66% over last year. The average recreational radius of the destination is 13.1km, 1.1km less than last year, a decrease of 7.75%. The listed companies in the scenic spot are greatly impacted by the epidemic, and the profit restoration process is slow. In the first three quarters of 2021, 16 companies in CITIC scenic area achieved a total revenue of RMB 12.14 billion, a year-on-year increase of 39.9%, returning to 57.2% of the same period in 19 years; The total net profit attributable to the parent company was 520 million yuan, turning losses into profits year-on-year, returning to 14.6% of the same period in 2019. The profit improvement for the whole year is expected to be limited. We believe that if the epidemic situation improves in 2022, the scenic spot company is expected to gain greater repair flexibility. It is suggested to pay attention to the leading Songcheng Performance Development Co.Ltd(300144) in the tourism and performing arts industry.
Education: k12 education is frustrated and pays attention to vocational education.
In 2021, there will be frequent educational policies and major adjustments in the industry. Generally speaking, the policy orientation is to strictly supervise k12 education, especially compulsory education (also known as K9), and vigorously develop vocational education. In k12 education, full-time private schools in the compulsory education stage are strictly limited in enrollment, teaching, capitalization and public participation. The provisions prohibiting mergers and acquisitions, agreement control and related party transactions in private schools in the compulsory education stage directly lead to the problems of stripping K9 business or delisting of relevant listed companies. K9 discipline off campus training is prohibited. The existing institutions will be registered as non-profit institutions. At the same time, classes on weekends and holidays are prohibited. The training content is prohibited from exceeding the outline, capitalization of institutions, advertising, etc. the off campus training in preschool and senior high school is also strictly controlled. This series of regulations made the discipline after-school training institutions basically shut down, and the relevant listed companies were forced to carry out business transformation. Therefore, we believe that there are basically no investment opportunities for K12 discipline education in the capital market in the future. Contrary to the strong supervision of k12 education, vocational education is strongly supported by policies. In 2021, the state successively issued a number of vocational education support policies to improve the academic level and school running quality of vocational education, and strengthen the level of practical application and skills has become an important guidance of educational policies. It is recommended to pay attention to the leader Jiangsu Chuanzhiboke Education Technology Co.Ltd(003032) .
Investment advice
Maintain the "overweight" rating of the social service industry in the next 12 months.
Risk statement
Repeated epidemics, vaccine effectiveness and specific drugs are less than expected risks, consumption recovery is less than expected risks, policy risks and intensified industry competition.
