The Zhitong Finance App learned that Zheshang Securities released a research report saying that 24Q1 leisure demand was higher and then lower, and passenger traffic recovered marginally. With the recovery in CPI and the release of flexible demand, the recovery in service consumption is better than commodity consumption. Looking at the main line, it is recommended to focus on structural opportunities. Scenic spots are optimistic about marketing quickly leaving the market, as well as project expansion and traffic improvement targets; offline retail focuses on the expected implementation of new hard discount business formats, contributing to performance growth; Restaurant Concern's zero-year increase in turnover rate and valuation repair of leading companies; hotels focus on marginal progress under state-owned enterprise reform; e-commerce sector sees rapid increase in cross-border platform share as overseas penetration increases.

Key recommendations: Songcheng Performing Arts (300144.SZ), Meituan (03690), Tongqing Building (605108.SH).

The views of Zheshang Securities are as follows:

Scenic spots: Demand for leisure declined somewhat after the Spring Festival. The structural differentiation of Q1 passenger flow exceeded expectations, and demand for cultural tourism increased rapidly.

According to the Ministry of Culture and Tourism's data center, there were 474 million domestic travel trips during the 2024 Spring Festival holiday, up 34.3% year on year, returning to 119.0% in the same period in 2019 according to a comparable scale; the total travel expenses of domestic tourists were 632,687 billion yuan, up 47.3% year on year, returning to 107.7% in the same period in 2019 according to a comparable scale; the implied passenger unit price was 1,335 yuan, up 9.4% year on year, corresponding recovery to 90.5% in the same period in 2019.

Passenger traffic dropped significantly after the holiday season, so wait for Qingming to catalyze passenger flow.

The Spring Festival was late in '24, and the resumption of work affected the pace of release of leisure demand; in addition, temperatures dropped relatively after the holiday season, and precipitation and snowfall affected travel intentions. However, the bank believes that demand for cultural tourism will continue this year. The core points are: 1) traffic improvements continue to be realized, and the increase in high-speed rail mileage is driving an increase in the number of people moving across regions; 2) the supply-driven characteristics of 24 years were obvious, the pace of local cultural tourism marketing was more frequent, and marketing methods were more diverse; 3) the influence of social media increased, and niche scenic spots broke rapidly and exploded. From Zibo to Xiaotou in the south, the popularity continues to pick up.

Core company outlook: Q1 structural differentiation, indoor artificial scenic spots > ice and snow tours > famous mountains and rivers.

1) Indoor performing arts, such as Songcheng Ancient Love, are less affected by the weather, and Q1 still has expansion logic (opening on February 10). As of March 25, Songcheng's performing arts weighted 1,754 shows, +198.8% compared to 2023, +67.4% compared to 2019, 208 asset-light games, -1.9% compared to 2023, and -15.4% compared to 2019. It is expected that the number of shows and attendance in Songcheng exceeded expectations in 2024Q1.

2) Under the influence of snow and ice tours, the number of visitors to Changbai Mountain, Dalian Shengya, and Western China increased rapidly during the Spring Festival. Passenger traffic is expected to decline after the holiday due to marginal effects such as heavy snow closures and the end of the free ticket policy, but it is expected that Q1 will continue to grow at a high rate.

3) The traditional famous mountain, Dachuan, has a certain high base under the 23-year trend of cost-effective travel. Passenger flows to traditional mountains and rivers such as Huangshan, Mount Jiuhua, and Mount Emei are expected to remain flat last year.

Offline retail: Department store consumption is resilient, and the Q4 performance is expected to be stable, and the 24Q1 industry level is still under pressure.

According to the National Bureau of Statistics, in February 2024, the retail sector grew by retail sector: supermarkets (+0.9%), department stores (+7.8%), specialty stores (+4.2%), and convenience stores (+5.8%). Department stores as a whole were affected by last year's high base, compounded by high demand for cultural tourism, partial outflow of passenger traffic, and supermarkets benefited from a recovery in CPI.

Retail competition between stocks continues, and the new hard discount business format is expected to usher in expansion.

Offline retail is shifting from traffic to inventory. Under the influence of the real estate cycle, store rents are expected to remain low in 2024, and there is some pressure on the vacancy rate, which is beneficial to the cost side of leading retailers. Under inventory competition, the old business format faced transformation, Hema's change of command, and loss reduction in Meituan's retail business also reflected the tortuous nature of exploring new retail models. Looking ahead to 2024, the bank believes that the breaking point of offline retail is: 1) experience upgrading, refined service, typical cases such as Fat Donglai; 2) The hard discount business is still one of the retail solutions. It drives ROE through high efficiency and turnover, and vertically integrates the supply chain. It is expected that 2024 will usher in a year of franchise expansion.

It is recommended to focus on targets: e-commerce: Pinduoduo, Alibaba, Jingdong Group; Hotels: Jinjiang Hotel, Huazhu Group, Yaduo, Junting Hotel, First Travel Hotel; Offline retail: Chongqing Department Store, Jiajiayue, Bailian Co., Ltd., Hefei Department Store; Scenic spots: Tianmu Lake, Changbai Mountain, Mount Emei A, Huangshan Travel, Jiuhua Travel; OTA platforms: Ctrip Group, Tongcheng Travel; Education: China Education Holdings, Mobile Education. HR Services: Direct boss recruitment.

Risk warning: Consumption recovery falls short of expectations; industry competition intensifies; exchange rate and interest rate risks; policy regulation risks.