By the end of the first quarter of 2022, Shenwan’s social service industry had fallen by 13.34%, outperforming the market by 2.98 percentage points, ranking 15th among Shenwan’s 31 industries. The social service industry is still sensitive to the repeated performance of the epidemic, and individual stocks related to travel, such as hotels, scenic spots and catering, have made a significant correction at the beginning of strict regional control. The continuous importation of cases and the high transmission of Omicron virus have brought great challenges to the recovery of the tourism market. The 22q1 operation of many companies in the industry is expected to be corrected again due to the impact of epidemic control. The phased decline trend of the overall share price of the sector reflects the sentiment of the capital market. It is expected that the industry trend will continue to fluctuate with the situation of epidemic control, with the improvement of epidemic control efficiency and the progress of covid-19 specific drugs exceeding expectations, which will boost the market.
Tax exemption: affected by the epidemic in the short term, the sales volume has declined slightly, and continue to play the role of guiding the return of overseas consumption in the medium and long term. In March, affected by the epidemic, the total tax-free sales of the whole island was 2.296 billion yuan, showing a downward trend year-on-year. The Hainan provincial government aims to achieve 100 billion yuan of tax-free sales on the island in 2022, with a year-on-year growth rate of 66.2%. Whether this strategic goal can be achieved mainly depends on the continuous growth of the number of people entering the island driven by the situation of epidemic prevention and control in China; And whether to liberalize the restrictions on outbound tourism. Hainan has grown rapidly as the preferred destination for vacation during the epidemic period, largely thanks to the current strict outbound policy, which releases the demand of outbound tourists in China.
Hotels: individual hotels are facing business crisis due to lack of brand influence and professional operation ability, and they are more willing to join the head chain brand. As the leader of chain hotels, the three hotel groups, relying on the advantages of scale, brand and operation, as well as the light management mode of “small investment and high empowerment”, empower small and medium-sized single hotels, deeply layout the broad sinking market, and realize the win-win of hotel groups and small and medium-sized single hotels. In 2021, Shanghai Jin Jiang International Hotels Co.Ltd(600754) , Btg Hotels (Group) Co.Ltd(600258) opened 1763 new stores and 1418 new stores respectively, expanding business channels beyond the original brand matrix, enabling the transformation of economical hotels and improving marginal revenue; Focus on the development of medium and high-end hotels, tilt more group resources to provide team and technical support; Differentiated development of high-end luxury hotels to improve the overall RevPAR of the hotel.
Catering: the epidemic has disturbed the operation and accelerated the capitalization process. The dependence of Chinese catering brands on IPO has increased. During the year, qixintian, Ruanji, Hefu Laomian and Yang Guofu Malatang have successively submitted prospectus, and Laowang hot pot has made a second sprint for Hong Kong stock IPO; The chain restaurant green tea has passed the listing hearing of the Hong Kong Stock Exchange and plans to raise US $150 million to open 75-100 new restaurants and build the supply chain every year. With the epidemic prevention work becoming the norm and ensuring safety, the sales channels of catering enterprises have gradually shifted from hall food to takeout and self delivery. Some companies have also arranged group meals and prefabricated dishes to diversify and smooth the impact of the epidemic on a single business.
Investment suggestion: in the short term, the epidemic broke out in many places and points in China, increasing the pressure of prevention and control. The ninth edition of covid-19 diagnosis and treatment plan has slowed down the run on medical resources by asymptomatic patients to a certain extent, but more than 1000 newly diagnosed and asymptomatic patients have been added in a single day for several consecutive days, and the situation of epidemic prevention and control is still severe. The catalytic role of the small and long holidays in promoting the recovery of the social service industry may not be as expected due to the repeated impact of the epidemic. At present, Shanghai and Jilin are still under strict closure and control. Compared with the number of trips and tourism revenue of the two places during the small and long holidays in previous years, it is expected that the performance of the Qingming Festival tourism market will be about 50% in previous years, mainly peripheral tourism and short-distance tourism. Be cautious and neutral about traveling during Q2 small and long holiday. In the medium and long term, the recovery of tourism market mainly depends on the trend of epidemic situation in China, the change of epidemic prevention policy and the R & D process of covid-19 specific drugs.
Focus on companies: China Tourism Group Duty Free Corporation Limited(601888) , Shanghai Jin Jiang International Hotels Co.Ltd(600754) , Btg Hotels (Group) Co.Ltd(600258) , Guangzhou Restaurant Group Company Limited(603043) .
Risk tip: the risk of continuous impact of the epidemic on the catering industry; Food safety risks, etc.
