Summary of Conference Call Records Industry Overview - The travel industry is experiencing a recovery driven by the dual holiday effect, with significant increases in airline ticket and hotel prices, particularly in the hotel sector, where Average Daily Rate (ADR) has shown continuous growth since Q4 2023 [1][2] Key Points on the Travel Industry - **CPI Growth**: In October, the Consumer Price Index (CPI) showed a year-on-year increase of 0.2%, marking the first positive growth since 2025. Service prices have been gradually recovering since March, with a 0.8% increase in October [2] - **Price Increases**: Airline ticket prices rose by 8.9% and hotel accommodation prices by 2.8% due to the holiday effect [2] - **Hotel Sector Performance**: The hotel sector has shown remarkable performance, with leading companies experiencing sustained ADR growth during the off-peak season [2] Company-Specific Insights - **Shaanxi Tourism IPO**: The successful IPO of Shaanxi Tourism marks the first approval of a tourism-related company under the new 827 policy, indicating improved conditions for consumer-related IPOs and increased support for the cultural tourism sector [3][4] - **Hotel Industry Recovery**: Companies like Huazhu and Atour have improved operational levels, while Jinjiang Hotels is expected to see significant recovery after hitting a low in Q4 2024. Data from Q3 shows signs of recovery, with further improvements noted in October [5] - **Supply Side Dynamics**: The growth rate of hotel supply has slowed, with fewer new openings from leading companies. A decrease in property rents is attracting new investors, but increased supply coupled with weakened demand has led to declining profitability, particularly in the mid-to-low-end market [6] Jinjiang Hotels - **Performance Improvement**: Jinjiang Hotels has exceeded expectations through personnel optimization, cost control, and negotiations for rent reductions, achieving over 200 million yuan in rent savings. The company’s ADR has shown positive growth, and organizational restructuring has improved internal morale [8] - **Future Projections**: The company is projected to achieve a performance of 1.5 billion yuan by 2025, with an estimated valuation of around 17 times earnings [8] Other Notable Hotel Companies - **Shoulv Hotel and Juntin**: Shoulv Hotel is noted for its relatively low valuation at about 7 times next year's earnings, with improved store openings. Juntin is recognized for its growth potential as a supplementary option [9] Airline Industry Insights - **Ticket Price Trends**: Airline ticket prices are in an upward recovery phase, with a year-on-year increase of 45% in October. This is attributed to recovering business demand, pricing strategy adjustments, and the resumption of exhibitions [10] - **International vs Domestic Routes**: International routes have outperformed domestic routes, with ticket prices increasing by approximately 10%. The high load factors and improved visa policies are expected to enhance the proportion of foreign travelers [11] - **Profitability Outlook**: Airlines are optimistic about profitability in Q4, with expectations of significant improvement over 2024. The recovery of business demand and strong performance in international routes provide a solid foundation for airline profits [12] Supply Chain Challenges - **Supply Chain Issues**: The airline industry faces several supply chain challenges, including quality crises at Boeing, production limits from the FAA, and skilled labor shortages, which are affecting aircraft manufacturing and operational capacity [13][14] Future Outlook - **2025-2026 Projections**: The supply-demand balance is expected to remain tight through Q4 2025 and into 2026, with optimism regarding ticket prices during the upcoming holiday seasons. Key airline recommendations include China National Aviation, China Eastern Airlines, Southern Airlines, Spring Airlines, and Juneyao Airlines, which are seen as having significant upward potential [15]

Investment Rating - The report maintains an "Accumulate" rating for the industry [1] Core Viewpoints - Shaanxi Tourism is positioned as a leading tourism destination enterprise focusing on "scenic spots + cultural tourism," with its IPO approved on November 7, 2025 [3][8] - The company is expected to generate revenue of 1.26 billion yuan and a net profit of 512 million yuan in 2024 [3][8] - The primary revenue sources are tourism performances and cableway services, contributing 54% and 31% respectively [9][15] - The company operates in mature 5A scenic areas, with visitor numbers for Huashan and Huaqing Palace expected to reach 3.83 million and 3.55 million in 2024, showing year-on-year growth of 2% and 12% [15] - The company maintains a high profit margin, with a gross margin of 71.3% in 2024 [19][20] Summary by Sections Industry Overview - Shaanxi Tourism has become a leading enterprise in the tourism sector, leveraging unique resources in Shaanxi Province [3][8] - The company’s main business segments include tourism performances, cableway services, and tourism dining [9][15] Financial Performance - In 2024, the company’s revenue is projected to be 1.26 billion yuan, with a net profit of 512 million yuan [3][8] - The revenue breakdown for 2024 is 310 million yuan from tourism performances, 180 million yuan from cableway services, and 20 million yuan from dining, accounting for 60%, 36%, and 4% respectively [9][15] - The company’s gross margin is expected to be 71.3% in 2024, with a slight decrease in 2025 due to market normalization and extreme weather conditions [19][20] Market Position - The company operates in key 5A scenic areas, ensuring a stable flow of visitors and revenue [15] - The expected visitor numbers for major attractions indicate a robust demand for the company’s services [15] Investment Recommendations - The report suggests focusing on companies with potential for capacity expansion or transportation improvements, including Shaanxi Tourism and others in the sector [29][30]