Summary of Key Points from the Conference Call Industry Overview - **Industry**: Inbound Travel in China - **Growth Potential**: Inbound visitation is projected to generate US$2-4 trillion in cumulative revenue over the next decade, despite uncertainties in domestic demand and trade frictions [1][3][4]. Core Insights - **Tourism Service Exports**: China's tourism service exports grew by 67% year-over-year (YoY) in the first half of 2025, significantly outpacing the 14% growth in total service exports and 6% in product exports [2][39]. - **GDP Contribution**: Inbound tourism receipts contributed 0.5% to China's GDP in 2024, up from 0.3% in 2023, but still below the ~1% level seen before COVID-19 [2]. - **Visitor Growth Factors**: Key drivers for increased inbound tourism include longer stays, a higher percentage of foreign visitors compared to those from Hong Kong and Macau, and a potential rise in business travelers [3][4]. Airline Industry Insights - **Airlines' Performance**: In the first half of 2025, international routes accounted for over 60% of the increase in China's air passenger turnover compared to the same period in 2024 [5][31]. - **Pricing Power Challenges**: Domestic demand remains depressed, delaying the expected pricing power inflection for airlines. The current high utilization rates have not translated into higher pricing elasticity [5][32][36]. - **Sustainability Concerns**: The aggressive expansion into international routes by Chinese airlines is viewed as unsustainable without generating profits, necessitating "anti-involution" efforts to avoid deflationary pressures [5][33][34]. Visitor Demographics and Trends - **Visitor Recovery**: Foreign visitation in Beijing has recovered to 90% of pre-COVID levels, with a 120% recovery for foreign tourists overall [12][61]. - **Visa-Free Entries**: Over 70% of foreign visitors entered China visa-free in 2Q25, a significant increase from approximately 50% before the relaxation of visa requirements [57][75]. Economic and Policy Factors - **Shopping as a Growth Driver**: China's potential as a shopping destination is highlighted, driven by global trade barriers and inflation pressures, making Chinese consumer goods more attractive [28][29]. - **Government Initiatives**: The Chinese government has implemented several policies to facilitate inbound travel, including visa relaxations, improved payment systems, and enhanced digital services for tourists [18][29][83]. Revenue Forecast Adjustments - **Revenue Growth Projections**: The base case for 10-year cumulative revenue remains largely unchanged, while the bull case is adjusted down by 6% compared to previous estimates [21][96]. - **CAGR Expectations**: A 19% compound annual growth rate (CAGR) for inbound revenue is deemed achievable, supported by factors such as increased visitor spending and longer stays [24][98]. Conclusion - **Outlook**: The inbound travel sector in China is positioned for significant growth, driven by favorable government policies, increased international connectivity, and evolving consumer preferences. However, challenges remain in the airline industry and overall economic conditions that could impact recovery and growth trajectories.

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - Deflationary pressures are worsening in China, primarily due to the impact of tariffs on the Producer Price Index (PPI) and the overall economic environment [1][7] - Core Consumer Price Index (CPI) remains stable at 0.5% year-on-year, indicating some resilience despite broader deflationary trends [2][4] - The PPI has shown a significant decline, with a month-on-month decrease of -0.4%, driven by lower prices in oil, raw materials, and durable consumer goods [3][7] Summary by Sections CPI Analysis - Core CPI year-on-year remained at 0.5% in April, unchanged from March, while month-on-month seasonally adjusted annual rate (SAAR) was 0.7% [2] - Food inflation reached its highest level in five months, primarily due to increased prices for fruit and beef, countering the effects of lower international oil prices [2] PPI Analysis - The PPI year-on-year decreased to -2.7% in April, reflecting ongoing tariff impacts and weaker final demand [6][7] - Specific sectors such as textiles, wood products, chemicals, rubber, and plastics experienced accelerated price declines, indicating significant exposure to the US market [3][7] Outlook - The PPI is expected to slip below -3% year-on-year from the current -2.7% during the May-July period due to less favorable base effects and continued tariff impacts [4] - Core CPI is anticipated to soften sequentially as the effects of PPI pass through, although year-on-year figures may remain resilient due to a low base [4][7]

五一出行数据【华福商社】 要点 ⭕1、旅游数据 全国数据 根据已有的前三日交运数据，我们预计全国五一假期出行人次的增速预计在 5%至 10%左 右，符合预期。 图：2019-2025 年节假日恢复度 数据来源：文旅部 目的地数据 【省市县】 假期第一天 江苏全省纳入监测的 644 家 A 级旅游景区、195 个省级以上乡村旅游重点村和 84 家 博物馆共接待游客 565.74 万人次，游客消费总额达 20.95 亿元，同比 2024 年分别增长 17.8%和 17.2%。 安徽省 5A 级旅游景区共接待游客 36.3 万人次，门票收入 1921.9 万元，同比 2024 年 分别增长 18.5%和 15.2%。 湖南省当日客流 996.24 万人次，同比增长 31.40%。 济南市重点监测的 30 家景区共接待游客 53.8 万人次，同比增长 1.3%，营业收入 2124.5 万元，同比增长 2.1%。 假期第二天 湖南省客流 1439.86 万人次，同比增长 33.88%，其中省外游客 242.25 万人次，占比 为 16.82%。 "五一"假期前两日，全市累计接待国内游客 807.33 万人次，同比增长 ...