Report summary
Industry views and investment suggestions
This week, A-Shares continued to fluctuate and adjust, the gem fell 2.7%, and the social service industry lost the overall market. Affected by the improvement of China’s epidemic control this week, the tourism and hotel sectors achieved good growth. Digital economy concept stocks Beijing Dataway Horizon Co.Ltd(301169) rose 73% this week. The yuan universe concept, which increased greatly in the early stage, and the stocks related to the concept of prefabricated vegetables were significantly adjusted. The State Council issued the tourism development plan for the 14th five year plan. The plan proposes that during the 14th Five Year Plan period, China will fully enter the era of mass tourism. It is clear to innovate and improve China’s tourism under the condition of normalization of epidemic prevention and control, and promote inbound tourism step by step and steadily develop outbound tourism under the premise of effective control of the international epidemic. The plan puts forward higher requirements for the supply of China’s tourism products in the next five years and puts forward “cultivating world-class scenic spots and resorts”. For inbound and outbound tourism, the general direction of orderly promotion and steady development was put forward. Inbound and outbound tourism was expected to recover, and individual stocks of travel agencies rose sharply.
China Tourism Group Duty Free Corporation Limited(601888) released the 2021 performance express, and the epidemic affected Q4 performance. Q4 company achieved operating revenue of 18.17 billion yuan / + 4.07%, net profit attributable to shareholders of listed companies of 1.101 billion yuan / – 63%, and net profit attributable to shareholders of listed companies of 1.084 billion yuan / – 63.56%. The net interest rate of Q4 company is 6.06%, a year-on-year decrease of nearly 11pct, which is expected to be affected by commodity promotion and expense amortization. (1) The Q4 epidemic in China is still repeated, and the passenger flow on the outlying islands of Hainan has declined sharply year-on-year. From the perspective of ensuring sales, the company continues to strengthen promotion. The discount of aromatherapy products is mainly 30% off for 3 pieces, and the discount of some promotional funds is lower. In the context of Q4 peak season, the company achieved a revenue of 18.17 billion yuan, an increase of 30% over Q3. (2) According to the practice of previous years, the company will accrue the amortization of inventory falling price reserves, deferred member points, bonus expenses and other expenses in Q4. Since the new tax-free policy, the company’s sales have increased significantly. In order to meet the purchase demand of consumers, the company has strengthened the purchase of tax-free goods, and the inventory has increased from 8 billion in 2020q1 to 19.8 billion in 2021q3. It is expected that the corresponding inventory falling price reserves will also be greatly improved. The company has more than 20 million members, and the growth of sales also brings the improvement of member points. From the perspective of the whole year, the company’s revenue and net profit have increased significantly compared with 2020, and the provision of bonus expenses is expected to increase to a certain extent.
The inbound and outbound duty-free shops that have completed the bidding can extend the operation period determined at the time of bidding for up to 2 years. On January 19, the Ministry of finance, the Ministry of Commerce, the Ministry of culture and tourism, the General Administration of customs and the State Administration of Taxation jointly issued the notice on adjusting the operation and bidding period of port entry and exit duty-free stores during the epidemic. The notice pointed out that the establishment of port entry and exit duty-free stores has been approved in accordance with the administrative measures and the bidding has been completed, The business enterprise of duty-free goods and the tenderee may, on the basis of friendly negotiation, extend the business period determined during the bidding of duty-free stores, which can only be extended once for up to 2 years. The operation period after extension can exceed 10 years, and the extension agreement shall be signed before December 31, 2022. The epidemic has led to a sharp decline in the number of entry-exit people, which has a great impact on the entry-exit duty-free operators. However, the epidemic will eventually end and the entry-exit will gradually recover. The promulgation of the notice is conducive to the duty-free operators to use the extended period to resume operations in time, reduce losses and deal with the new changes in the tax-free industry after the epidemic.
Investment suggestion: continue to be optimistic about the development space of China’s tax-free industry and continue to recommend China Tourism Group Duty Free Corporation Limited(601888) . In addition, the industry leaders of fine molecules Beijing Career International Co.Ltd(300662) , Btg Hotels (Group) Co.Ltd(600258) , Songcheng Performance Development Co.Ltd(300144) are recommended.
Plate Market
In this period (from January 17 to January 21), the leisure service industry index fell by 1.29%, and the CSI 300 index fell by 1.11% in the same period. The leisure service industry index beat the CSI 300 index by 2.4pct, ranking 15th among the 28 Shenwan industries.
Risk tips: systemic risk, epidemic risk, policy promotion, lower than expected business conditions and other risks.
