【True Zoom Finance】April 8 Noon Briefing: CITIC Securities: Customer orders surpass pre-pandemic levels for the first time, travel demand remains strong

"During the 3-day Qingming Festival holiday, domestic tourism trips nationwide reached 119 million, an increase of 11.5% compared to the same period in 2019 on a comparable basis; domestic tourism spending reached 53.95 billion yuan, up 12.7% from the same period in 2019, with income growth outpacing the increase in trips. Joseph Tsai on Alibaba: We realized we've fallen behind; Shipping prices surge 70%?! Shipowners announce price adjustments, and here's how the market reacted."

Key News

CITIC Securities: Per-customer spending surpasses pre-pandemic levels for the first time, travel demand remains strong$CSC(06066.HK)

l CITIC Securities research report points out that during the 3-day Qingming Festival holiday, domestic tourism trips nationwide reached 119 million, an increase of 11.5% compared to the same period in 2019 on a comparable basis; domestic tourism spending reached 53.95 billion yuan, up 12.7% from the same period in 2019, with income growth outpacing the increase in trips.

l Overall, while travel demand remains strong, per-customer spending has surpassed pre-pandemic levels for the first time. Premium travel destinations continue the trend seen during the Spring Festival, with income growth also outpacing the increase in trips. Travel and tourism consumption serve as an important vehicle for consumers' cultural and spiritual consumption, and tourist spending is expected to continue recovering and growing.

l Qingming travel consumption: Per-customer spending rises, travel demand remains strong.

l Strong travel demand, per-customer spending surpasses pre-pandemic levels for the first time. According to calculations by the Ministry of Culture and Tourism Data Center, during the 3-day Qingming Festival holiday, domestic tourism trips nationwide reached 119 million, an increase of 11.5% compared to the same period in 2019 on a comparable basis; domestic tourism spending reached 53.95 billion yuan, up 12.7% from the same period in 2019.

l Data from the Ministry of Transport shows that daily average railway passenger numbers increased by over 20% compared to 2019, while civil aviation passenger numbers rose by nearly 20% compared to 2019. During the 3-day Qingming Festival holiday, domestic tourism trips nationwide reached 119 million, an increase of 1.7% compared to the same period in 2019 on a comparable basis.

l Short holidays make short-distance trips the preferred choice for consumers, while the tradition of returning home to honor ancestors has boosted rural micro-tourism. This year's Qingming Festival holiday lasted 3 days from April 3 to April 6. As the first short holiday after the Spring Festival, it combined leisure travel with ancestral worship and family visits. Against the current economic backdrop, residents may prefer leisure and entertainment activities. Ctrip data shows that domestic local and nearby travel orders increased by 211% and 350% year-on-year, respectively.

l Income growth at premium travel destinations outpaced the increase in trips. For example, Guangdong received 19.828 million tourists during the 3-day Qingming holiday, up 10.2% compared to 2019. Tourism revenue reached 9.92 billion yuan, a 30.7% increase compared to 2019. Inner Mongolia received an average of 2.6207 million tourists per day during the 2-day Qingming holiday, up 90.52% compared to 2019, with daily revenue averaging 1.734 billion yuan, a 147.55% increase compared to 2019.

Joseph Tsai on Alibaba: We realized we've fallen behind$BABA-W(09988.HK)

l In the latest interview video released by Norway's sovereign wealth fund (Norges Bank Investment), Alibaba co-founder and Chairman Joseph Tsai discussed the intense competition Alibaba faces, stating that upon internal review and reflection on the past few years, Alibaba realized it had fallen behind.

l "Because we forgot who our real customers are. Our customers are the users who shop on our apps, and we didn't provide them with the best experience. So in a way, we brought this upon ourselves." Joseph Tsai said Alibaba must first admit its mistakes and reorganize its personnel. He praised newly appointed Alibaba CEO Eddie Wu as "extremely user-focused, dedicated to products, interfaces, and user experience," which is most important for Alibaba.

l Last November, Alibaba founder Jack Ma also posted on the company's internal forum, congratulating Pinduoduo on its decisions, execution, and efforts over the past few years, and "firmly believing that Alibaba will change and improve." Reflection on Alibaba's, especially Taobao's, direction in recent years seems to have become a consensus among Alibaba's leaders, driving the company's reforms and restructuring.

l "Large companies have fixed organizational structures, and then they don't change because people don't like change, don't want to switch jobs, and fear being laid off. Then the company's (strategic) direction must fit into the organizational structure. But that shouldn't be the case. You should define the direction first, then set up the company's organization." Joseph Tsai mentioned that Taobao has undergone internal restructuring, with Eddie Wu becoming Group CEO and Taotian Group CEO. Compared to three months ago, Taotian's team has changed significantly.

l Previously, in December 2023, Eddie Wu announced sweeping organizational changes at Taotian Group. Several "post-80s" leaders took charge of Taobao and Tmall's core businesses. From Joseph Tsai's remarks, whether the new management team can improve Taobao and Tmall's user experience and rectify Alibaba's past mistakes may become key metrics for evaluating the team.

Shipping prices surge 70%?! Shipowners announce price adjustments, and here's how the market reacted$Port Transportation(20047.HK)

l Recently, leading shipping companies such as Maersk, CMA CGM, and Hapag-Lloyd have 陆续 issued price increase notices, announcing higher freight rates for multiple Asia export routes. The maximum increase reached $2,000, representing a nearly 70% rise compared to current rates.

l Interviews with multiple freight forwarding companies revealed that actual prices have not increased and have even dropped for some product routes. This is because the market remains oversupplied. Industry insiders generally believe that the shipping market lacks the momentum for significant price hikes in the current and next few quarters, expecting prices to remain relatively stable.

l "We have indeed seen price hike announcements from major shipping companies in recent days and have notified customers about the increase in U.S. sea freight rates, advising them to stock up early," said a 负责人 from a Shenzhen-based freight forwarding company.

l Specifically, on March 18, Hapag-Lloyd announced that starting April 1, 2024, it would increase freight rates from Asia (excluding Japan) to the west coast of Latin America, Mexico, the Caribbean, Central America, and the east coast of Latin America. The increases for small and large containers would be $700 and $900, respectively.

l Around the same time, Maersk announced that from March 15 to March 31, 2024, it would impose a peak season surcharge (PSS) on dry containers from the Far East to the east coast of South America, charging $160 for small containers and $200 for large containers.

l Additionally, COSCO SHIPPING Lines issued a price increase notice, stating that from April 1 to April 14, 2024, freight rates from the Far East (including eastern Asia, such as China) to the U.S. and Canada would rise sharply by $1,000 to $2,000.

l Other shipping companies, including Mediterranean Shipping Company (MSC), Wan Hai, and Hyundai Merchant Marine (HMM), have also announced price increases, affecting routes to the U.S. and Canada, Latin America, Europe, the Mediterranean, the Black Sea, and nearby regions.

l However, the market has not responded to the shipping companies' price hikes. Interviews with multiple freight forwarding companies revealed that actual market prices have not significantly increased so far. "Our system shows that U.S. route prices did rise slightly in early March but fell by the end of the month and have remained stable since. Based on past experience, prices should continue to drop in April and May," said Xia Haofei, founder of 简宜运. He noted that not only are U.S. route prices declining overall, but European route prices are also trending downward.

Today's Forex and Commodities News

EUR/USD: Dollar strengthens, EUR/USD edges lower but holds above 1.0800

l On Monday, EUR/USD declined as optimistic U.S. non-farm payroll data continued to support the dollar.

l Positive risk sentiment may curb demand for safe-haven currencies and provide some support for EUR/USD.

l Traders now await U.S. inflation data, Fed meeting minutes, and the ECB meeting for new catalysts.

l EUR/USD struggled to extend Friday's rebound of about 50 pips from below 1.0800 and faced fresh selling pressure in Monday's Asian session. The pair currently trades near 1.0825-1.0820, still influenced by USD price fluctuations, though downside momentum appears limited.

l Strong U.S. monthly jobs data, with non-farm payrolls showing the economy added 303,000 jobs in March, exceeding expectations, forced investors to scale back bets on a Fed rate cut in June and two cuts in 2024. This outlook kept U.S. Treasury yields elevated, supporting the dollar and weighing on EUR/USD.

l However, a generally positive global equity market, supported by easing Middle East geopolitical tensions, may curb demand for the safe-haven dollar. Traders may also adopt a wait-and-see approach ahead of key U.S. data releases this week, including the latest consumer inflation figures and the crucial FOMC meeting minutes on Wednesday. The ECB meeting on Thursday should provide clearer direction for EUR/USD.

l Meanwhile, growing bets on an ECB rate cut in June (reinforced by weak Eurozone consumer inflation data last week) may continue to pressure the euro, keeping EUR/USD bulls on the defensive. Thus, any rebound toward the 100-day SMA near 1.0870 could be seen as a selling opportunity. Traders now await German industrial production and trade balance data, as well as the Eurozone Sentix investor confidence index, for potential EUR/USD catalysts.

Precious Metals: Gold and copper prices continue to lead gains as funds flock to resource ETFs

l International gold prices extended their record-breaking rally. As of April 5, COMEX gold June 2024 contracts closed at $2,349.1/oz, hitting an all-time high of $2,350.0/oz during the session. Prices rose 2.07% during the holiday and have gained 11.26% year-to-date.

l Domestic pure gold retail prices also surged. According to Chow Tai Fook's official data, after breaking the 700 yuan/gram mark on April 3, Chow Tai Fook's pure gold jewelry retail prices climbed further during the Qingming holiday. On April 7, pure gold prices reached 718 yuan/gram, with gold recycling prices at 524 yuan/gram.

l Data from Securities Times·Databao 统计 shows that over 540 equity ETFs rose last week, with 18 gaining more than 5%, primarily focused on non-ferrous metals themes. Specifically, the ChinaAMC CSI-HK-Shenzhen Gold Industry Stock ETF surged 33% last week after three consecutive limit-up moves. The ETF has a small 规模 of less than 50 million shares and saw turnover exceed 167% last week, with current 溢价率 over 30%, indicating high short-term chasing risks.

l Other top performers included the Huafu CSI Rare Metals Theme ETF, ICBC Credit Suisse CSI Rare Metals Theme ETF, and Harvest CSI Rare Metals Theme ETF, all up over 7%. The Huafu CSI Rare Metals Theme ETF rose 8.57%, ranking second. Its top 10 holdings include 盐湖股份， Tianqi Lithium, and 北方稀土， with 重仓股 like Jiangte Motor, Huayou Cobalt, and 中矿资源 gaining over 10% last week.

l The rally in resource stocks was driven by 持续上涨 in commodity prices. COMEX gold futures repeatedly hit record highs, surpassing $2,300/oz, while Brent crude topped $90/barrel, and LME copper futures broke $9,000/ton.

l Small metals may be next to rally. Beyond gold and copper，稀土， cobalt, and other niche metal stocks have also surged recently. Hanrui Cobalt rose nearly 37% last week, while 章源钨业 gained almost 20%.

Crude Oil: Geopolitical developments significantly impact market sentiment

l Israel's large-scale troop withdrawal from Gaza on Sunday slightly eased geopolitical risks, leading to lower oil prices at Monday's open. However, oil prices are expected to remain highly volatile around geopolitical developments. During the Qingming holiday, oil prices continued to surge, with Brent crude hitting $91.91. Although prices retreated about $1 from the peak on Friday, Brent still rose 1.96% from pre-holiday levels, while WTI gained 1.69%. These levels exceed most institutions'年初 forecasts. OPEC+ production cuts were widely expected to drive a Q1 oil price rebound, with consensus targets around $80 and highs near $85. Some 超预期 scenarios projected $90. However, since March, escalating geopolitical factors have fueled the rally. Recent Ukrainian drone attacks on Russian refineries and Israel's strike on the Iranian embassy heightened Middle East tensions, driving a nearly $7 surge over the past week. This pushed WTI above $85 and Brent above $90. As oil 重返高油价区间， the U.S. Energy Department had to temporarily abandon plans to replenish the Strategic Petroleum Reserve.

l When oil hit $90 last September, high prices 明显抑制 demand. Although late-September supply tightness, with Cushing inventories nearing depletion, briefly drove prices higher, weak demand ultimately triggered a Q4 crash. Now, with oil back at $90 in early April during the initial phase of H1 demand validation, investors remain hopeful. Q2 is traditionally a global demand recovery period, which may partly offset high-price pressures. So far, high prices haven't visibly dampened demand. Additionally, at these levels, OPEC+ compliance may waver. With Russian refining capacity 受损， it may need to boost crude exports to alleviate production pressures, while high prices could reduce other OPEC members' adherence to cuts. These variables warrant close monitoring.

Source: Goldhorse Capital Extramile