The Zhitong Finance App learned that BOC Securities released a research report saying that according to data from the National Bureau of Statistics, in 2024, China's total retail sales of social consumer goods will be about 48.79 trillion yuan, an increase of 3.5% over the previous year. Looking at the whole year, Social Zero maintained a steady recovery trend. In addition, consumer promotion policies such as trade-in also helped the consumer market grow well. The Where to Go Index applet shows that on January 17, the number of searches for the Shanghai-Taipei route increased 16% over the previous week. Fuzhou-Taipei had the most significant increase, close to 6 times, and Xiamen increased 1.2 times. In addition, there has also been a marked increase in searches for flights from Shenzhen and Chongqing to Taipei.
Looking back at 2024, social zero consumption is rising steadily, and the travel market continues to operate at a high level. It is expected that residents' income and consumer confidence will increase further in 2025. BOC Securities suggests focusing on travel chains and industry-related companies with strong certainty about subsequent growth in performance: Huangshan Tourism (600054.SH), etc.; Junting Hotel (301073.SZ), a hotel chain brand that has benefited from a recovery in commercial passenger traffic and increased market share after the epidemic; and Cree International (300662.SZ), which has benefited from employment promotion policies.
In addition, the recovery of the cross-border travel market is expected to drive the restoration of airport duty-free shopping and the accelerated introduction of a new tax exemption policy in the city. It is recommended to focus on China Duty Free (01880); Tongqing Building (605108.SH), which undertakes the recovery in demand for restaurants and banquets; Yuyuan Co., Ltd. (600655.SH), a long-established local consumer brand; Miao Exhibition (300795.SZ), an exhibition brand benefiting from business recovery; and Fengshang Culture (300860.SZ), a performing arts industry chain company.
The main views of BOC Securities are as follows:
In the first two trading weeks (2025.1.06-2025.1.17), the social services sector rose 2.79%, ranking 11th among Shenwan's Tier 1 31 industry rankings. The social services sector outperformed the Shanghai and Shenzhen 300 Index by 1.80 pct. As the Spring Festival approaches, the popularity of travel is gradually increasing. We maintain an industry rating that is superior to that of the market.
Market review & industry dynamic data
The Shanghai Composite Index rose 0.95% cumulatively in the first two trading weeks to close at 3241.82. The Shanghai and Shenzhen 300 rose 0.98% cumulatively to close at 3812.34. The social services sector rose 2.79% and ranked 11th in Shenwan's ranking of 31 first-level industries. The social services sector outperformed the Shanghai and Shenzhen 300 Index by 1.80 pct.
There were three increases in the social services sub-sector and the travel retail sector. The increases and decreases were: education (+5.29%), professional services (+3.10%), tourism and scenic spots (+2.99%), hotels and restaurants (-1.67%), and travel retail (-2.88%), respectively.
According to flight managers, the number of passenger flights carried out by civil aviation nationwide from 1.06-1.12 was 105,209, an increase of 3.32% over the previous week, or 109.97% of the same period in '19. The number of international flights was 1,3017, recovering to 91.71% in 2019, or +0.35% over the previous month.
Bi-weekly highlights
Social zero consumption has been steadily restored in '24. According to data from the National Bureau of Statistics, in 2024, China's total retail sales of social consumer goods will be about 48.79 trillion yuan, an increase of 3.5% over the previous year. By type of consumption, retail sales of goods were about 43.22 trillion yuan, up 3.2% year on year, while food and beverage revenue was about 5.57 trillion yuan, up 5.3% year on year. Looking at the whole year, Social Zero maintained a steady recovery trend. In addition, consumer promotion policies such as trade-in also helped the consumer market grow well.
The Spring Festival is approaching, and the number of passengers during the Spring Festival travel season is expected to reach 9 billion. The Spring Festival holiday is coming soon, and the popularity of travel is gradually increasing. Furthermore, the number of days during the Spring Festival holiday will increase by one day in 2025, and demand for long-term and outbound travel is expected to increase further. Looking at the overall scale, according to estimates from transportation and other departments, the movement of people across regions during the Spring Festival travel season will reach 9 billion, and passenger traffic by railways and civil aviation is expected to exceed 510 million passengers and 90 million passengers respectively, all of which have reached record highs.
Group tours to Taiwan have partially resumed. On January 17, the Ministry of Culture and Tourism announced that the mainland will resume group tours for residents of Fujian and Shanghai in the near future, and various related work is also being actively prepared. The Where to Go Index applet shows that on January 17, the number of searches for the Shanghai-Taipei route increased 16% over the previous week. Fuzhou-Taipei had the most significant increase, close to 6 times, and Xiamen increased 1.2 times. In addition, there has also been a marked increase in searches for flights from Shenzhen and Chongqing to Taipei. Ctrip said that three hours after the news was released, the number of searches related to Taiwan on the Ctrip platform rose 48%. Shanghai and Fujian were the main tourist destinations for mainland residents, accounting for 30% in 2019.
Investment advice
Looking back at 2024, social zero consumption is rising steadily, and the travel market continues to operate at a high level. It is expected that residents' income and consumer confidence will increase further in 2025. We recommend focusing on travel chains and industry-related companies with strong certainty in subsequent performance growth: Huangshan Travel, Lijiang Co., Ltd., Songcheng Performing Arts, Lingnan Holdings, Zhongxin Travel, China Youth Travel, Haichang Ocean Park, Tianmu Lake, Changbai Mountain, etc.; chain hotel brands that have benefited from the recovery in commercial passenger traffic and increased market share after the epidemic; Cree International, which has benefited from employment promotion policies; the recovery of the cross-border travel market is expected to promote the restoration of duty-free airports and the accelerated introduction of new policies in the city; it is recommended to focus on Wangfu, China Well; Tongqing Building to handle the recovery in demand for catering and banquets; Yuyuan Co., Ltd., a long-established local consumer brand; exhibition brands Miao Huizhan and Lansheng Shares, which have benefited from business recovery; Fengshang Culture and Dafeng Industrial, the performing arts industry chain companies.