Weekly report of social service industry: it's dark and waiting for flowers to bloom

Last week (April 18-april 22), the social service sector (Shenwan) fell by 4.52%, the Shanghai Composite Index fell by 3.87%, the Shenzhen Component Index fell by 5.12%, and the Shanghai and Shenzhen 300 fell by 4.19%. The social service sector lost 0.64 percentage points to the Shanghai composite index last week, ranking 19th among the weekly rises and falls of Shenwan's 34 primary sub industries.

Core view:

On April 22, 2022, China Tourism Group Duty Free Corporation Limited(601888) released the annual report of 2021 and the first quarterly report of 2022.

In 2021, the company achieved an operating revenue of 67.676 billion yuan, a year-on-year increase of 28.67%; The net profit attributable to the parent company was 9.654 billion yuan, a year-on-year increase of 57.23%. In the first quarter of 2022, the operating revenue was 16.782 billion yuan, a year-on-year decrease of 7.45%; The net profit attributable to the parent company was 2.563 billion yuan, a year-on-year decrease of 9.99%.

The performance is in line with expectations.

At present, affected by the epidemic, the overall performance and profit end of the first quarter are still under pressure, and the short-term impact does not change the company's long-term growth logic. The epidemic situation improved in the first half of 2021. With the recovery of travel passenger flow, the tax exemption performance of outlying islands was bright. In the second half of 2021, the impact of the epidemic in some parts of the country was repeated, which impacted the travel passenger flow and tax-free offline consumption scene. With the increase of discounts and the increase of the proportion of online sales, the pressure on the profit side of the company is obvious. Since the beginning of 2022, the outlying island duty-free market has performed well during the Spring Festival, and its performance has increased rapidly from January to February. However, due to the impact of the epidemic since March, important stores such as Sanya International duty-free city have been closed twice due to the epidemic control, which has dragged down the overall revenue and profit performance. At present, the national epidemic prevention, control and treatment capacity has been rapidly improved. With the continuous improvement of the epidemic situation, the travel passenger flow is expected to rebound strongly. At the same time, the discount is expected to continue to narrow, and the offline proportion will continue to rise, boosting the overall profitability of the company. Haikou New Harbor International duty-free city is expected to land in September this year, making efforts to improve the sense of experience and category expansion, which is expected to further boost the overall performance of the company.

Company announcement and industry information:

Beijing Career International Co.Ltd(300662) : the company's profit distribution plan for 2021 is: it plans to distribute cash dividends of RMB 2.07 (tax included) for every 10 shares to all shareholders based on the company's total share capital 196837115, with a total of RMB 4074528281 (tax included). This distribution does not give bonus shares and does not involve the conversion of provident fund into share capital Btg Hotels (Group) Co.Ltd(600258) : on the premise of not affecting the construction progress of the project invested by the raised funds, the total amount of idle raised funds shall not exceed RMB 1.9 billion, and the service life shall not exceed 12 months for cash management. It can be used circularly and continuously within the validity period of the above amount and resolution.

On January 17, 2022, the company used idle raised funds of RMB 1.9 billion to purchase structured deposit financial products Huatian Hotel Group Co.Ltd(000428) : Changsha Economic and Technological Development Zone launched the "cage for bird" industrial transfer project. The land and houses owned by Hunan Huaxing Property Management Co., Ltd., the holding subsidiary of the company, are within the scope of planning and expropriation. According to the assessment of the land and houses owned by Huaxing property by Changsha Zhixin Real Estate Appraisal Co., Ltd., the relocation compensation of 88924363 yuan is determined to compensate for the expropriation of the land use right and aboveground buildings of Huaxing property St tengbang: as of April 18, 2022, Mr. Zhong Baisheng, the actual controller of the company, held 14268913 shares of the company, accounting for 2.31% of the total share capital of the company; 14268913 shares of the company have been frozen, accounting for 100% of the company's shares and 2.31% of the company's total share capital; 230221631 shares have been waiting to be frozen, accounting for 161345% of the company's shares and 37.34% of the company's total share capital.

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 brand, scale and management advantages of leading hotel groups are obvious, 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

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