Summary of China Travel & Leisure Industry Conference Call Industry Overview - The conference call focused on the **China travel and leisure industry**, particularly the performance of various companies in the sector during **3Q25** [1][2]. Key Points and Arguments General Market Trends - **Weaker Disposable Income**: Disposable income growth slowed to **4.5%** in 3Q25 from **5.1%** in 2Q25, impacting consumption trends which fell to **3.4%** from **5.2%** [2][3]. - **Domestic Air Traffic**: Increased by **3%** year-over-year (yoy) in 3Q25, down from **6%** in 2Q25 [2]. - **Outbound Travel**: Normalized to **15%** yoy growth, significantly lower than **34%** and **24%** in 1Q and 2Q25 respectively, as flight capacity returned to pre-pandemic levels [2]. Company Performance Highlights - **Songcheng**: Reported a **10%** yoy revenue decline due to competition and health issues [3]. - **CTGDF**: Revenue decline narrowed to flat yoy in 3Q25 from **-11%** and **-8%** in previous quarters, with a **14%** increase during the Golden Week holidays [3][6]. - **Jinjiang and BTG**: RevPar improved to declines of **-2%** and **-3%** yoy, respectively, compared to **-5%** and **-6%** in 2Q25 [3][6]. - **Chinese Airlines**: Benefited from lower fuel costs and traffic recovery, with domestic traffic up **13%** and international traffic up **11%** [6]. - **Shiji**: Revenue increased by **7%** yoy, but net loss widened to **Rmb12 million** due to higher impairment losses [6]. Macau Casino Performance - **Macau GGR**: Increased by **13%** yoy in 3Q25, up from **8%** in 2Q25, driven by factors such as the wealth effect from the stock market and reduced diversion of travelers to other destinations [7]. - **Sands China and MGM**: Results exceeded expectations, with Sands China expected to report **US$1.901 billion** and MGM **US$1.091 billion** in revenue for 3Q25 [7][10]. Samsonite Expectations - Expected to report a narrower revenue decline of **-2%** yoy in 3Q25, improved from **-5%** in 2Q25, driven by better performance in the US and Asia [7][10]. Hotel Operators - **H World and Atour**: Both expected to report better-than-expected results due to stabilizing hotel RevPar and robust retail sales growth [7][10]. - **RevPar Forecasts**: H World and Atour projected declines of **-0.4%** and **-3%** yoy, respectively, with revenue growth forecasts of **+7%** and **+35%** yoy [8][10]. OTA Performance - **Trip.com and Tongcheng**: Expected to meet revenue guidance with Trip.com projected to grow **+15%** and Tongcheng **+9%** [9][10]. - **Profit Margins**: Potential for improved profit margins due to favorable revenue mix shifts towards higher-margin businesses [9]. Other Important Insights - **Investor Focus**: Investors are expected to pay close attention to companies' forward guidance during their 3Q25 results to assess the sustainability of the recovery [2][10]. - **Valuation Considerations**: Despite recent performance, share prices of US-listed chain hotels are still trading below mid-cycle valuations, indicating potential for upward earnings revisions [10][11]. Conclusion - The China travel and leisure industry is showing signs of recovery, although challenges remain due to weaker consumer spending and competition. Companies like H World, Atour, and TCOM are positioned well for growth, while Macau casinos are benefiting from a rebound in gaming revenue. Investors should remain cautious but optimistic about the sector's trajectory moving forward.

Core Points - The Hang Seng Index (HSI) closed at 26,167.41, reflecting a slight increase of 0.03% on November 3, 2023 [1] - Major blue-chip stocks showed mixed performance, with HSBC Holdings rising by 1.13% while Tencent Holdings fell by 0.21% [2] Stock Performance Summary - Tencent Holdings: Latest price at 628.00 HKD, down by 1.00 HKD (-0.16%), ADR price at 626.678 HKD, a decrease of 1.322 HKD compared to the Hong Kong market [3] - Alibaba Group: Latest price at 163.20 HKD, down by 1.90 HKD (-1.15%), ADR price at 162.916 HKD, a decrease of 0.284 HKD compared to the Hong Kong market [3] - HSBC Holdings: Latest price at 108.30 HKD, up by 0.20 HKD (+0.19%), ADR price at 109.527 HKD, an increase of 1.227 HKD compared to the Hong Kong market [3] - AIA Group: Latest price at 79.95 HKD, up by 4.50 HKD (+5.96%), ADR price at 79.996 HKD, a slight increase of 0.046 HKD compared to the Hong Kong market [3] - BYD Company: Latest price at 99.10 HKD, down by 1.50 HKD (-1.49%), ADR price at 98.008 HKD, a decrease of 1.092 HKD compared to the Hong Kong market [3]

Core Viewpoint - The performance of popular Chinese concept stocks showed mixed results, with the Nasdaq Golden Dragon China Index increasing by 0.26% [1] Group 1: Stock Performance - Alibaba experienced a decline of over 1% [1] - Ctrip saw an increase of over 1% [1] - Tencent Music rose by over 3% [1] - Futu Holdings dropped by over 2% [1] - Li Auto fell by over 1% [1] - NIO increased by over 2% [1]

Core Insights - The "Shuangju Guizhou" tourism industry promotion conference was held in Shanghai, focusing on investment opportunities in the tourism sector in Guizhou province [1] - Guizhou aims to develop a first-class tourism destination by leveraging its natural beauty, climate, cultural richness, technological innovation, and wellness environment [1] Group 1: Investment Opportunities - Guizhou is promoting various tourism projects, including rural landscapes, summer wellness retreats, hot spring resorts, homestay clusters, and integrated travel complexes [1] - Key cities and regions such as Guiyang, Anshun, Bijie, Qiandongnan, Tongzi County, Panzhou City, and Xingyi City presented their tourism investment projects [1] Group 2: Industry Collaboration - Huazhu Group and Ctrip expressed their commitment to enhancing the tourism experience in Guizhou through product diversification and quality improvement [1] - Ctrip's Vice President Zhang Xu emphasized the company's confidence in empowering Guizhou's tourism through standards, industry upgrades, marketing, and resource integration [1] Group 3: Visitor Experiences - Long-term visitors from the Yangtze River Delta shared their positive experiences in Guizhou, highlighting the region's cool climate and cultural richness [2] - Visitors expressed a strong desire to return, indicating a growing interest in Guizhou as a travel destination [2]

Core Insights - Ctrip has upgraded its "Global Taste Coordinates," covering 68 countries, 512 cities, and over 18,000 restaurants, enhancing its offerings in the food and dining sector [1] - Inbound travel orders on Ctrip surged by 100% year-on-year in the first half of the year, with inbound visitor numbers increasing by 64% and spending rising by 59% as of October [3] - The motivations for inbound tourists have shifted, with food experiences now surpassing sightseeing and accommodation as the primary reason for travel planning [3] Company Developments - Ctrip's new high-end restaurant ranking system categorizes restaurants into three tiers: Black Diamond, Diamond, and Platinum, redefining their significance beyond just price and appearance [3] - The ranking process for high-end restaurants now includes insights from Black Diamond users, providing a more authentic market perspective and consumer insights [3] Market Trends - The landscape of inbound tourism has expanded, with new source countries for visitors including Kazakhstan, Kuwait, and Qatar, indicating a diversification beyond traditional markets like Japan and Southeast Asia [3] - Major cities in China such as Shanghai, Beijing, Hangzhou, Guangzhou, Hong Kong, Chengdu, and Macau are identified as the most active regions for high-end dining consumption [4]

Core Viewpoint - The Hong Kong stock market is experiencing a collective rise, particularly in the technology sector, with significant inflows into the Hang Seng Technology Index ETF, indicating strong investor interest and potential for future growth [1][2]. Group 1: Market Performance - On November 3, the three major indices in the Hong Kong stock market rose collectively, with the Hang Seng Technology Index increasing by over 0.5% at one point [1]. - The technology stocks showed a predominance of gains, while coal and oil stocks also performed well, and banking stocks were active [1]. Group 2: ETF Inflows - The Hang Seng Technology Index ETF (513180) attracted a net inflow of 271 million yuan on October 31, with a total net inflow of 3.954 billion yuan for the entire month of October, showcasing its strong capital-raising ability [1]. - The ETF is becoming increasingly popular among investors, particularly for those looking to gain exposure to China's AI core assets without a Hong Kong Stock Connect account [2]. Group 3: Future Outlook - Major brokerages express optimism about the future of the Hong Kong technology sector, with expectations of better investment opportunities as the AI industry develops [1]. - Guotai Junan anticipates that the technology sector will be the main theme for the Hong Kong market in 2026, supported by favorable valuations and the accumulation of high-quality assets [2]. - The current environment of potential interest rate cuts by the Federal Reserve may lead to a return of foreign capital, providing liquidity support for the Hong Kong technology sector [2].

Group 1 - The Hong Kong stock market showed a positive trend with the Hang Seng Technology Index rising over 0.5%, driven by gains in tech stocks, coal, and oil sectors, while gold stocks weakened [1] - The largest ETF tracking the A-share market, the Hang Seng Technology Index ETF (513180), saw a slight increase, with notable gains from stocks like NIO, XPeng Motors, Xiaomi, Kingdee International, Li Auto, and Trip.com, particularly Xiaomi which rose over 4% [1] - According to Zhongtai Securities, the Hong Kong stock market holds medium to long-term investment value due to the dual backdrop of a potential Federal Reserve rate cut cycle and policy support, despite short-term adjustments in the tech sector [1] Group 2 - As of October 31, the latest valuation (PETTM) of the Hang Seng Technology Index ETF (513180) was 22.85 times, indicating it is in a historically low valuation range, below 71% of the time since the index was launched [2] - The tech sector in Hong Kong is expected to benefit from current trends in AI, with potential for foreign capital inflow exceeding expectations due to the Federal Reserve's rate cuts and continuous southbound fund accumulation [2] - Investors without a Hong Kong Stock Connect account can access core Chinese AI assets through the Hang Seng Technology Index ETF (513180) [2]

1. Report Industry Investment Rating - No relevant content provided 2. Core Viewpoints - On October 28, the central bank increased net open - market injections, improving the capital situation to an overall balanced and stable state. After the positive news of the central bank's bond - buying restart was realized, the bond market was generally weak with a slight upward movement in the 10 - year treasury bond yield. The convertible bond market declined following the stock market, and most individual bonds fell. Overseas, yields of US Treasury bonds across various tenors generally decreased, while the 10 - year treasury bond yields of major European economies remained unchanged from the previous day [1] 3. Summary by Sections 3.1 Bond Market News 3.1.1 Domestic News - The full text of the "Proposal of the Central Committee of the Communist Party of China on Formulating the 15th Five - Year Plan for National Economic and Social Development" was released on October 28, setting major goals for economic and social development during the "15th Five - Year Plan" period, such as maintaining economic growth within a reasonable range, promoting the development of strategic emerging industries, and achieving breakthroughs in key core technologies in key areas. It also proposed measures for fiscal and monetary policies [3] - The "15th Five - Year Plan" proposal emphasizes the role of active fiscal policies, enhancing fiscal sustainability, and promoting a more domestic - demand - led and consumption - driven economic development model [5] - China and ASEAN signed the 3.0 - version upgrade protocol of the free - trade area on October 28, expanding cooperation in emerging fields and promoting regional trade facilitation [7] 3.1.2 International News - ADP will start releasing weekly preliminary estimates of private - sector employment data on a weekly basis, providing a four - week moving average of private - sector employment changes. The existing monthly report will still be released as usual [8][9] 3.1.3 Commodities - On October 28, international crude oil futures prices continued to fall, with WTI December crude futures down 1.89% and Brent December crude futures down 1.86%. COMEX gold futures fell 1.25%, and NYMEX natural gas prices dropped 4.30% [10] 3.2 Capital Situation 3.2.1 Open - Market Operations - On October 28, the central bank conducted 475.3 billion yuan of 7 - day reverse repurchase operations, with an operating rate of 1.40%. With 159.5 billion yuan of reverse repurchases maturing on the same day, the net injection was 315.8 billion yuan [12] 3.2.2 Capital Interest Rates - On October 28, the central bank's increased net open - market injections improved the capital situation. DR001 rose 1.58bp to 1.469%, and DR007 fell 2.38bp to 1.558% [13] 3.3 Bond Market Dynamics 3.3.1 Interest - Rate Bonds - After the news of the central bank's bond - buying restart was confirmed on October 28, the bond market was generally weak. The yield of the 10 - year treasury bond active bond 250016 rose 1.80bp to 1.813%, and the yield of the 10 - year CDB active bond 250215 rose 1.75bp to 1.8805% [16] - There were several bond - issuing tenders on October 28, with details such as issuance scale, winning bid yields, and multiples provided [18] 3.3.2 Credit Bonds - On October 28, the trading price of "H0 Baolong 04" deviated by over 10%, rising over 37% [18] - Credit - related events include the suspension of trading of 6 corporate bonds of Rongxin Group, the ineffective convening of the "20 Xingfu 01" bondholder meeting of Huaxia Holdings, and the disclosure of overdue debts of Sunshine City [19] 3.3.3 Convertible Bonds - On October 28, the A - share market declined, with the Shanghai Composite Index, Shenzhen Component Index, and ChiNext Index down 0.22%, 0.44%, and 0.15% respectively. The convertible bond market also declined, with the CSI Convertible Bond, Shanghai Convertible Bond, and Shenzhen Convertible Bond indices down 0.24%, 0.30%, and 0.16% respectively [20] - There were rating - related events such as the withdrawal of Jiangsu Zhongxing's "BBB+" international long - term issuer rating and financial - strength rating events of other companies. Some companies also announced losses, overdue reports, and other events [22] - Upcoming events include the listing of Funeng Convertible Bonds, the possible trigger of the conversion - price downward - adjustment condition for Juxing Convertible Bonds, and announcements regarding early redemption of some convertible bonds [28] 3.3.4 Overseas Bond Markets - On October 28, except for the 3 - year US Treasury bond yield remaining unchanged, yields of US Treasury bonds across other tenors generally decreased. The 2 - year yield dropped 1bp to 3.47%, and the 10 - year yield dropped 2bp to 3.99% [24] - The 10 - year treasury bond yields of major European economies remained unchanged on October 28 [27] - The daily price changes of Chinese - funded US - dollar bonds as of the close on October 28 are presented, including the top 10 daily gainers and losers [30]

Group 1: Core Insights - Ctrip's inbound travel orders surged by 100% year-on-year in the first half of this year, with inbound visitor numbers increasing by 64% and inbound spending rising by 59% as of October [1] - China has established itself among the top three countries globally for inbound travel orders, with a growth rate that places it in the top five [1] - The source countries for inbound tourists to China have expanded from traditional markets like Japan and Southeast Asia to include Europe, North America, India, the Middle East, and newly added visa-free countries such as Kazakhstan, Kuwait, and Qatar [1] Group 2: Culinary Trends - The Ctrip Food Guide 2026 global list, covering 68 countries and over 18,000 restaurants, indicates that food is evolving from an "additional experience" to the "primary motivation" for inbound travel [1] - Ctrip's CMO highlighted the strong appeal of "China travel," presenting a significant opportunity in the growing market [1] - Overseas tourists are increasingly searching for keywords like "food," "restaurants," and "local specialties," with a rise of over 30%, indicating a shift in travel planning priorities towards culinary experiences [1] Group 3: High-End Dining Insights - The newly released high-end restaurant rankings redefine three categories: Black Diamond as "ultimate travel destinations," Diamond as "taste landmarks," and Platinum as "hidden culinary surprises" [3] - The rankings incorporate user perspectives for the first time, providing real market insights and consumer preferences [4] - Major cities for high-end dining in China include Shanghai, Beijing, Hangzhou, Guangzhou, Hong Kong, Chengdu, and Macau, with Shanghai dominating the top five hottest restaurants [4] Group 4: Home Cuisine Appeal - The "Home Flavor" theme list targets the emotional connection of travelers seeking familiar tastes, with a 30% increase in searches for various cuisines [5] - Ctrip's Food Guide ensures travelers can find authentic "Chinese flavors" abroad, with Chinese cuisine now available in 13 countries and 21 cities [5] - The list caters not only to Chinese travelers but also to those from Japan, Korea, and Southeast Asia, allowing them to find their home cuisine while traveling [5] Group 5: Must-Visit Restaurant Recommendations - Ctrip's "Must-Visit" list addresses the dilemma of choosing popular restaurants that may not always meet expectations [6] - The platform provides a comprehensive guide from luxury dining to street food, helping travelers avoid poor choices [6] - Ctrip's immersive dining experience, "Taste of China," launched in Shanghai, aims to transform the dining experience into a journey, with plans for future culinary tours [6]

Core Points - The sixth "11 Live Month" and the Changning District Live Economy Cluster Theme Event were launched on October 31, co-hosted by the Shanghai Municipal Commission of Commerce and the Changning District People's Government [1] - The event aims to implement the "Shanghai Three-Year Action Plan for Promoting High-Quality Development of the Live Economy (2024-2026)" and leverage Shanghai's advantages in live e-commerce to stimulate consumer potential [1] Group 1 - The event will feature over 60 diverse online and offline themed live streaming activities across seven major sectors, including domestic products, fashion trends, local life, and cultural tourism [3] - The "Local Life" sector will enhance consumer experience through digital empowerment of business districts, offering group purchase subsidies and traffic support to boost local consumption [3] - The "CIIE Good Goods" sector will utilize the spillover effect of the China International Import Expo to facilitate rapid marketing of imported goods through live streaming [3] Group 2 - The "Changning District Live Economy Cluster Development Coordination Mechanism" was officially established, involving 11 departments to collaboratively support the live economy [4] - Various activities will be held in Changning District, including the launch of a training base for online hosts and the establishment of local standards for the live economy [4] - The International Consumption Friendly Environment Experience Officers will be appointed to promote Changning's unique business environment through live streaming [4] Group 3 - The Hongqiao International Central Business District will host complementary activities during the "11 Live Month," including live streaming events that showcase global products and interactive activities [5] - The Shanghai Network Anchor Training Base was officially launched in Changning, and a local standard initiative for quality e-commerce live streaming was proposed [5] - Influential online personalities were appointed as "International Consumption Friendly Environment Experience Officers" to enhance the promotion of Changning's live economy [6]