The Zhitong Finance App learned that CITIC Securities released a research report saying that the CITICS-CLSA CRR team's survey results of 1,600 urban residents across the country showed that interest in traveling during the 2024 Spring Festival holiday was high, with a marked increase over the previous year's Spring Festival and recent public holidays. The surveyed residents' expectations for long-distance travel and outbound travel continued to improve during the 2024 Spring Festival, and per capita consumption expenditure expectations were further higher than the 2023 summer and National Day. Looking ahead to the next 12 months, it is expected that there is still considerable room for growth in long-distance travel, especially outbound travel. The surveyed residents' plans for offline social activities during the Spring Festival improved slightly. Driven by the demand for gifts, the surveyed residents' consumption plans for liquor and New Year's goods such as snacks, beverages, dairy products, health products, etc. maintained steady growth, while liquor consumption plans increased slightly.

The core ideas are as follows

Travel during the 2024 Spring Festival holiday is expected to increase significantly compared to the previous year's Spring Festival, and per capita consumption is expected to improve.

Of the surveyed residents, 90% said they might travel during the Spring Festival in 2024 (including the city's attractions and suburbs), which is 14 pcts higher than the actual travel ratio of 76% in 2023, and +5 pcts higher than the expected National Day travel expectations of the residents surveyed in 2023. 85% of the surveyed residents with a monthly income of 30,000 yuan or more had travel plans, while only 48% of the group with a monthly household income of 10,000 yuan or less. 40% of the residents surveyed during the 2023 Spring Festival plan to travel within the province, and 29% to outside the province. The share for the 2024 Spring Festival increased by +11pcts/+17pcts, respectively, compared to the 2023 National Day. China's Hong Kong and Macau regions are still the first choice for outbound travel destinations. Among other outbound travel destinations, Thailand is the most popular country among the surveyed residents, followed by Singapore and Japan. The proportion of surveyed residents with a per capita tourist budget of 5,000 yuan or more rose to 32%, compared to 26%/17% during the 2023 Summer and National Day, respectively.

The growth in long-distance travel and outbound travel is still impressive, and there is a high level of enthusiasm for experiential travel consumption.

Looking ahead to the next year, 81% of the surveyed residents said they were planning a long-distance trip within the country, while 71% actually planned a long-distance trip in the past 12 months; 46% planned an outbound trip, while only 30% of the surveyed residents had an outbound trip in the past 12 months. The surveyed residents' travel spending budgets continued to grow in 2024, but the increase slowed down. In terms of expenditure structure, scenic spots, restaurants, and experiential tourism projects are the projects where residents' interest increased most significantly compared to before the pandemic. Residents' interest in self-guided tours, particularly self-driving tours, continues to rise.

Consumption of New Year's goods was steady during the Spring Festival, and consumption of liquor increased slightly.

The surveyed residents' expectations for the 2024 Spring Festival liquor consumption were close to those of the previous year, but the share of respondents planning to raise the purchase price decreased compared to the previous year. High-end liquor was under slight pressure, leading brand preferences weakened, and leading local companies were the first choice due to high cost performance. Gifts are still the primary demand for liquor consumption during the holidays, and data shows that health concerns are still an important factor affecting the increase in liquor consumption. Looking ahead to the next 12 months, we expect a slight increase in the volume and unit price of liquor compared to 2023. Regarding New Year's goods for personal use and gifts during the Spring Festival, such as snacks, beverages, dairy products, health products, etc., the surveyed residents' consumption expectations have improved compared to last year, but the growth rate has slowed.

Risk Factors:

The limited survey sample resulted in errors; there was a deviation between the measurement results and the actual situation; downstream demand fell short of expectations; risk of changes in domestic and foreign travel policies exceeding expectations; risk of changes in exit visa processing policies exceeding expectations; overseas air capacity recovery falling short of expectations; geopolitical risk; natural disaster risk; global liquidity falling short of expectations; risk of large exchange rate fluctuations; risk of declining economic growth; consumption downgrade trends exceeded expectations; risk of product price fluctuations; risk of sharp increases in raw materials and logistics prices; risk of exceeding expectations; risk of domestic and foreign policies exceeding expectations; increased industry competition Safety issues; foreign investment risks; technology research and development risks; cost control falls short of expectations; corporate business or capacity expansion falls short of expectations, etc.

Investment Strategy:

Residents' demand for travel was strong during the Spring Festival. Compared with last year's National Day holiday, the resilience of consumer demand for leisure travel has been verified. Long-distance travel continues to grow, and the recovery trend for outbound travel is clear. Favorable visa policies and a long Spring Festival holiday period are expected to push the Spring Festival outbound travel market to exceed expectations.

We maintain our view: in a context where macroeconomic trends remain uncertain, consumption is an industry with obvious post-cycle characteristics, and it will still take time to regain market confidence in the short term. Considering the high base figure driven by the release of backlog demand after the epidemic in the beginning of 2023, consumption growth is expected to show a low and high trend in 2024. Looking at consumer investment opportunities in the short term, we believe that changes in economic expectations are important. Increased signs of recovery and trend establishment are expected to enhance expectations of a recovery in consumer sentiment, thus driving valuation repair. Growth requires attention to structural trends in the Chinese consumer market: 1) consumers return to rationality, quality upgrades go hand in hand with consumption; 2) consumers pursue happiness in life and are willing to pay for spiritual satisfaction and emotional value; 3) some new consumer directions spawned by technological progress and iteration. The two key directions are the digital economy and the other is biotechnology. We believe we can focus on consumer application scenarios in the digital economy, smart homes, and iterative opportunities in agriculture, food, and beauty under synthetic biology. On the supply side, we have long been concerned about the ability of enterprises themselves to explore incremental space. Currently, there is still plenty of room for development in the international market and the sinking market.