Strategy: after the epidemic, consumption will usher in repair
Recently, the epidemic situation in China has been repeated, but the inflection point may have been gradual. Recently, China has been disturbed by the epidemic again. Under the current strict epidemic prevention measures, the inflection point may not be far away. From the long-term trend, on the one hand, China has a high vaccination rate and may further promote needle vaccination in the future, which can effectively reduce the proportion of infection, hospitalization, severe illness and death; On the other hand, China has introduced Pfizer small molecule drugs, and China’s self-developed drugs are also continuously promoted. The general trend of weakening the impact of the epidemic will remain unchanged in the future. When appropriate, China may also gradually relax the control restrictions.
The long-term repair trend of offline consumption remains the same. Over the past two years, consumption has been the sector most affected by the epidemic in the economic structure, but the overall balance sheet of residents has not deteriorated significantly, and there is a foundation for repair in the future. From overseas experience, although the two-year epidemic has had an impact on lifestyle, offline consumption habits will also return after the epidemic. If the pressure of the epidemic situation weakens in the future, the recovery of offline consumption will also accelerate. In addition, there may be more supportive policies for consumption in the future. It is suggested to pay attention to transportation (Airport), retail, social service and other industries.
Transportation
How to view the future profit restoration process of airport companies? In the past two years, the airport is the sector most affected by the epidemic. Although there is a certain recovery and policy support, it is still a drop in the bucket for the huge losses of the sector as a whole. The profit restoration of the sector needs the comprehensive recovery of air passenger transport demand. However, referring to the experience of SARS in 2003, with the rapid recovery of air passenger demand after the end of the epidemic, the fundamentals of the industry have also been repaired rapidly.
Investment suggestion: we believe that the growth logic and location advantages of first tier airport companies and airlines have not changed substantially due to the epidemic; With the continuous advancement of covid-19 vaccine / treatment technology, the demand for air passenger transport will gradually recover, and the revaluation of relevant companies is a deterministic event. We recommend Air China Limited(601111) , Spring Airlines Co.Ltd(601021) , Shanghai International Airport Co.Ltd(600009) , Guangzhou Baiyun International Airport Company Limited(600004) , and pay attention to China Eastern Airlines Corporation Limited(600115) , China Southern Airlines Company Limited(600029) , Juneyao Airlines Co.Ltd(603885) , Shenzhen Airport Co.Ltd(000089) and China Express Airlines Co.Ltd(002928) .
Retail
Department store sector recovery outlook. Under the impact of the epidemic, the retail sector generally did not return to the level in 2019. Among the sub sectors, the Department Store sector was the most affected. In the future, with the weakening impact of the epidemic and the recovery of passenger flow, it is expected that the revenue and profit of department stores will gradually improve month on month, and the year-on-year growth rate will no longer be affected by the change of accounting standards.
Investment suggestion: with the gradual recovery of the epidemic and the improvement of offline passenger flow, the performance of the Department Store sector will gradually improve month on month. Whereas: 1) the recovery elasticity of demand for optional consumer goods is large; 2) The dividend yield of some department store stocks is high; 3) Some department store stocks have high self owned property value. With the gradual improvement of offline consumption, we recommend Wangfujing Group Co.Ltd(600859) and Rainbow Digital Commercial Co.Ltd(002419) , the national Department Store Leader Shanghai Bailian Group Co.Ltd(600827) , the Shanghai Department Store Leader Chongqing Department Store Co.Ltd(600729) , and the high dividend rate Chongqing Department Store Co.Ltd(600729) .
Social service
The tourism industry has recovered opportunities. Tourism has recovered in 2021, but the overall growth remains to be seen. Looking forward to this year, with the continuous introduction of favorable policies, the tourism industry as a whole is expected to usher in a dilemma reversal. Growing in the leading crisis of the subdivided industry, the industry concentration has accelerated, and the chain rate of the hotel and catering industry has continuously improved. There is still room for the future. The tax-free industry policy helps the leading enterprises to actively layout, guide the return of consumption, and maintain the long-term trend of high growth.
Investment suggestions: 1) the long-term logic of configuration is clear, the track is high-quality, and the industry leader with deep moat: China Tourism Group Duty Free Corporation Limited(601888) . 2) After the end of the epidemic, the future profitability brought by the improvement of chain rate is the leading hotel with potential to improve: Shanghai Jin Jiang International Hotels Co.Ltd(600754) , Btg Hotels (Group) Co.Ltd(600258) . It is suggested to pay attention to scenic spots and outbound tourism companies with greater flexibility after the reversal of difficulties: China Cyts Tours Holding Co.Ltd(600138) , Huangshan Tourism Development Co.Ltd(600054) , Caesar tourism, Utour Group Co.Ltd(002707) .
Risk analysis: 1. The epidemic situation worsened beyond expectation; 2. Economic growth fell sharply short of expectations.
