瑞银中国休闲商品与服务业中国旅游住宿与休闲业市场情绪将走向何方201931151页

:Whereissentimentheading?Industryoutlookremainschallenging,butrisksareskewedtotheupsideUBSEvidenceLab'slatestsurveyof~3,000domestictravellersfoundthattheYangtze/Pearlriverdeltasaretheregionsmostaffectedbytradetensionanddeterioratingbusinesssentiment.However,oureconomistsexpecteconomicgrowthtobottominQ1,andthesurveypointstoapotentialreboundinbusinesstraveldemand,especiallyintier1cities,encouragedbydomesticpolicystimulusandpositiveprogressduringUS-Chinatradetalks.Weexpectleisuretravelgrowthtoremainresilientandarecautiouslyoptimisticinbusinesstransientdemandrecovery,especiallyinH119.Duty-freeindustryplayerstopourmost-preferredlistduetofavourablegovernmentpolicies.Businesstravel:Tier1citiesbottomingout,privatebusinessremainscautiousForeignenterprisesandprivatecompaniespostedthemostsignificantpull-backinbusinesstraveldemandinthepastsixmonths,whichweattributetotheirhigherexposuretotradedisputesanddomesticpolicytightening.Inthesurvey,61%ofrespondentsexpecttotravelmoreonbusinessinthenext12months(upfrom46%intheprevioussurvey),especiallyintier1citiesandamongforeignenterprises;privatebusinessremainscautiousduetoweaksentiment,whichcouldrecoverasaresultofstimuluspoliciesandapositiveUS-Chinatradedeal,themainnear-termswingfactor.LeisuretravelremainsresilientdespitetheeconomicdownturnDomestictouristnumbersrose10.2%YoYinH218despitethemacrochallenges,aslowdownfromthe2012-17CAGRof11.1%andinlinewithourestimates.Thoughthesurveyfoundtier1cityrespondentsandhigh-incomeChinesetradeddown,thereweretwopositivesurprises:1)domesticleisuretravelisstillgainingwalletshare;and2)middle-to-low-incomehouseholdsandtier3-4citiesbeatexpectations.Weexpectdomestictourismrevenuetorise12.3%/12%in2019/20(vs.thepast-5-yearCAGRof14%),helpedbyconsumptionupgradesandimprovingtransportationinfrastructure.Weareselective–ourtoppicksareCITS,ShanghaiAirportandGBIAWepreferCITS,SHAirportandGBIAandraiseourShenzhenAirportPT(reportlink),supportedbytheduty-freeindustryboom.Wealsolikehoteloperators,asthesupply/demandimprovementremainsundervalued,inourview.Amongtouristdestinations,wepreferSongchenggivenitsprovenabilitytoexpandandstrongpipelineandliftPTofOCTonitsgoodpositioninginthesecularchangeoftourismconsumptionandrecoveryoftier1cities'propertysales(reportlink).Figure1:Ourmost-andleast-preferreddomestictravel-relatedstocksNote:Priceanddataasof8March2019;Source:ThomsonReuters.UBS-SestimatesMostpreferredCITS601888.SSBuy17.959.5573.3025%296.222.6SHInt'lAirport600009.SSBuy16.256.1963.5010%233.417.6GBIA600004.SSBuy4.113.0113.90-8%281.75.9Jinjiang600754.SSBuy3.523.5735.1021%171.69.6OCT000069.SZBuy8.86.838.0012%50.817.5Daqin601006.SSBuy19.58.4510.004%91.113.3LeastpreferredLijiang002033.SZSell0.66.455.99-5%201.47.1Emeishan000888.SZSell0.66.645.69-7%221.46.5SDHS600350.SSSell3.64.713.80-14%120.86.5CSA-A600029.SSSell15.27.816.60-3%221.46.619EPE(x)19EPB(x)19EROE(%)CompanyTickerRatingMktCap(US$bn)Lastclose(LC)PT(LC)18-20EEPSCAGREquitiesChinaLeisureGoods&[e-mail][e-mail][e-mail][phone]EdwinChen,[e-mail][e-mail][e-mail][phone]ChinaTravel,LodgingandLeisure11March2019abc2ChinaTravel,LodgingandLeisureUBS-SResearchTHESISMAPMOSTPREFERREDLEASTPREFERREDCITS,ShanghaiAirport,GBIA,Jinjiang,OCT,DaqinLijiang,Emeishan,SDHS,CSA-APIVOTALQUESTIONSQ:Willdomesticbusinesstransientdemandreboundin2019-20?Likely.UBSEvidenceLab'slatestsurveyshowedadeclineinbusinesstransientdemandvs.theprevioussurvey.Thehardest-hitregionsaretheYangtze/Pearlriverdeltas,whichweattributetotradetensionsanddeteriorationinprivatebusinessconfidenceinH218.Weforeseearecoveryinbusinesstravelfrequencyandbudgetsin2019,supportedbydomesticpolicystimulusandpositiveprogressduringrecentUS-Chinatradetalks.EastChinaandprivatecompaniescouldbelaggards,assuggestedbythecautiousviewsofsurveyrespondents,thoughweexpectthemtopickupaspolicysupporttakeseffect.moreQ:Candomestictourismrevenuesustain10%+growthin2019-20?Weforecastdomestictourismrevenuegrowthof12.3%/12%in2019/20,strongerthanthemarket'sexpectationofasingle-digitrate.Despiteslowinggrowthintouristnumbers,thelatestUBSEvidenceLabsurveyfounddomesticleisuretravelisstillgainingwalletshareandtier3-4citiesoutperformedexpectations.WearealsoencouragedbytheresilienceoftheChinesemiddleclass.