Tourism Consumption Surpasses Pre-Epidemic Levels; Listed Companies Recover from Losses
July 18, 2023 – At a press conference held by the National Development and Reform Commission, Jin Xiandong, director of the Policy Research Office, shared positive news about the recovery of the overall consumer market. It was revealed that the catering and tourism sectors have exceeded pre-epidemic levels, indicating a promising trend in the economy.
Data released by the Ministry of Culture and Tourism showed a gradual recovery in the domestic tourism market since the beginning of the year. In the first half of 2023, there were 2.384 billion domestic tourists, marking a significant increase of 929 million or 63.9% compared to the same period last year. The second quarter performed exceptionally well with a year-on-year increase of 86.9%.
Moreover, the revenue generated from domestic tourism witnessed remarkable growth, nearly doubling from the previous year. Domestic tourism revenue in the first half of 2023 reached 2.3 trillion yuan, representing a substantial increase of 1.12 trillion yuan.
To further boost tourism consumption, relevant policies have been introduced. The Ministry of Culture and Tourism and the Bank of China issued a notice outlining financial support for the high-quality development of rural tourism. The initiative aims to increase credit extension, promote product innovation, and develop comprehensive services. Over the next three years, a minimum of 10 billion yuan in new loans will be provided to cultural, tourism, catering, and accommodation customers in the county.
In addition to national policies, local governments have also implemented measures to support the tourism industry. Yunnan Province announced the “Implementation Plan for Implementing the Strategy of Expanding Domestic Demand,” which focuses on expanding diversified, personalized, and customized tourism products and services. Chongqing launched the “2023 National Summer Consumption Season and Nightless Chongqing Life Festival,” while Henan issued a tourist highway construction opinion. These policies aim to strengthen the tourism industry and anticipate a continuous surge in summer tourism.
The improvement in the tourism sector has also reaped benefits for listed companies in the A-share tourism industry. According to Statistics Times and Databao, out of the 20 listed companies in the tourist attraction sector, 15 are expected to recover from losses and turn a profit. Three other companies are projected to reduce their losses.
Prominent listed companies that have achieved significant turnarounds include Huangshan Tourism, Emeishan A, Jiuhua Tourism, Lijiang Shares, and CYTS. All five companies are expected to achieve net profits of over 100 million yuan, with four outperforming their pre-pandemic figures.
Huangshan Tourism, for instance, reported the most significant improvement, with expected net profits ranging from 190 million to 228 million yuan. In the first half of the year, Huangshan Scenic Area experienced a staggering increase of 527% in the number of tourists, resulting in substantial growth for the company.
Jiuhua Tourism soared to its highest net profit in the same period since its listing. The company anticipates a net profit of around 111 million yuan in its 2023 semi-annual report. Factors contributing to its success include the recovery of the domestic tourism market, increased business income, and effective cost control.
In light of the summer tourist season, travel stocks have outperformed the market. Since June, tourism stocks have seen an average increase of 3.29%, surpassing the Shanghai Composite Index by 3 percentage points. Changbaishan, *ST Caesars, and Dalian Sunya emerged as the top gainers, rising by 38.67%, 27.14%, and 17.37%, respectively.
Changbaishan expects a net profit of approximately 12.25 million yuan, attributing the growth to industry recovery and increased revenue.
Beishang Capital has also increased its positions in six tourism stocks since June, including Lijiang Shares, Lingnan Holdings, Xiangyuan Cultural Tourism, Zhongxin Tourism, Yunnan Tourism, and Tianmu Lake. Notably, Lijiang Shares experienced an increase of over 1 million shares in their holdings.
As the tourism industry continues to rebound, the positive momentum in tourism consumption and the recovery of listed companies signal a promising outlook for the sector.
(Article source: Securities Times)