CICC: Tourism demand performance is flat, focus on new project expansion and existing stock enhancement

According to the Zhitong Finance APP, China International Capital Corporation (CICC) released a research report stating that the tourism industry's performance in the first half of 2025 was below expectations, with leisure demand also falling short, primarily due to pressure on consumer spending and extreme weather conditions in some regions. The trend of demand becoming more quality-oriented and differentiated is becoming more pronounced. It is recommended to pay attention to the progress of new projects and the improvement effects of existing projects. The coverage rating for the targeted stocks is maintained. Attention should be paid to the trends in the fundamentals of the industry and individual stocks, with a recommendation to focus on Songcheng Performance (300144.SZ), CHINA TRAVEL HK (00308), and Emei Mountain (000888.SZ). CICC's main viewpoints are as follows: Leisure demand is below expectations, mainly due to pressure on consumer spending and extreme weather conditions in some regions In the first half of 2025, the number of visitors to Huangshan/Wuzhen/Gu Bei Water Town/Emei Mountain/Changbai Mountain increased by +5.8%/-11.9%/-18.4%/-6.5%/-4.6% year-on-year. The leisure demand during the peak summer season remains subdued; for instance, data from China Railway Group and Flight Butler shows that the number of passengers sent by national railways and domestic civil aviation in July and August increased by +4.7% and +2.4% year-on-year, respectively. Regarding tourist attractions, the bank estimates that Wuzhen's revenue in July declined nearly 20% year-on-year due to extreme weather, while in August, with improved weather and operational enhancements, revenue increased by about 25% year-on-year; Gu Bei Water Town's performance remains under pressure due to extreme weather and other factors during the summer; Changbai Mountain benefited from IP marketing and other rich activities, with the number of visitors in July and August increasing by +26.2% year-on-year. The inbound and outbound tourism maintained a relatively fast growth rate; according to data from the National Immigration Administration, the number of inbound and outbound visitors nationwide increased by +15.8% year-on-year in the first half of the year, with visa-free inbound foreign visitors increasing by +53.9% year-on-year; data from Flight Butler shows that international passenger transport volume increased by +13.7% year-on-year in July and August. The trend of quality-oriented and differentiated tourism demand continues Data from Trip.com shows that the family travel market during the summer continues to expand, with the proportion of family travelers rising to 35%, and consumption showing trends of thematic diversification and enriched experiences (e.g., searches for outdoor products like camping and hiking increased by 120% year-on-year). Meituan's summer report indicates that segmented demand scenarios are bursting forth (the trend of "traveling with events/exhibitions" is gaining popularity), and there is strong demand for quality travel (e.g., in summer group travel orders, the proportion of boutique small group orders accounted for 40%, an increase of +90% year-on-year). Focus on the progress of new projects and the improvement effects of existing projects CHINA TRAVEL HK signed an agreement on August 26 to acquire the Songhua Lake Ski Resort and the snowfield operation management team under Vanke (holding 75% equity). The company expects to complete the transaction in the second half of 2025. This project has an annual visitor volume exceeding 350,000 and revenue exceeding 300 million yuan, which is expected to contribute incremental profits to the company. Additionally, the company focuses on four major natural and cultural tourism destinations: Ningxia, Yunnan, Xinjiang, and Guangxi, building brand benchmarks with a balanced approach. 2) The Songcheng Performance Hangzhou project will focus on leveraging its core performance advantages, integrating Song Dynasty culture with modern multicultural elements for rectification; the Foshan project will strengthen innovation in outdoor performances, develop the group market, and incubate night performances; the Sanya project has completed phased rectification and upgrades, with attention to the subsequent improvement effects of existing projects. 3) China Youth Travel Service strengthened the management team of Gu Bei Water Town in Q2, focusing on family travel, and developing more suitable research and cultural products in conjunction with unique resources such as the Simatai Great Wall, while continuously enhancing brand marketing Risks Consumer power recovery is below expectations; competitive landscape is deteriorating; companies fail to enhance management capabilities to cope with changes