Guotai Junan: Mid-Autumn Festival holiday prices rise significantly beyond expectations, prosperity continues under the disturbance of typhoons.

Guotai Junan Securities released a research report stating that they continue to be bullish on vertical O2O + going global, NetDragon's focus shifting from pursuing scale to emphasizing profitability, and significant improvement in the competitive landscape of vertical O2O companies. The service industry is expected to see both volume and price increases in the future. The report also mentioned that the Mid-Autumn Festival holiday sales significantly exceeded expectations, reaching a level significantly higher than that of the Dragon Boat Festival in 2019, with continued increase in tourism popularity and differentiation in traditional scenic areas performing slightly better than expected. Against the backdrop of the rise of nationalistic trends, the long-term logic of gold jewelry remains promising. Key points from Guotai Junan Securities include: - The Mid-Autumn Festival holiday sales significantly exceeded expectations, reaching a level higher than that of the Dragon Boat Festival in 2019. - During the Mid-Autumn Festival holiday, domestic travel in China reached 107 million person-times, up 6.3% compared to 2019; total spending by domestic tourists during the holiday was 51.047 billion RMB, up 8% compared to 2019, with an average spending of 477.07 RMB, up 1.6% compared to 2019. The number of tourists/income/average spending decreased by 8%/increased by 5%/increased by 12% compared to the Dragon Boat Festival, with the decrease in the number of tourists attributed to the increase in average spending. - Border control continued to recover, with a total of 5.256 million inbound and outbound people being safeguarded by national border control agencies, a 18.6% increase compared to the same period in 2023. - Cross-regional mobile traffic during the Mid-Autumn Festival holiday increased by 16% compared to 2019, with a slight drop in recovery compared to the Dragon Boat Festival. Long-distance travel decreased by 10% overall, with the growth in cross-regional traffic primarily driven by non-commercial travel such as private cars. - Traditional scenic areas showed overall performance slightly better than expected, with popular destinations such as Jiuhua Mountain seeing a doubling in visitor numbers compared to 2019, Changbai Mountain Tourism up 35% and Wuhan Sante Cableway Group up 30% compared to 2019. Other destinations such as Lijiang Yulong Tourism, Huangshan, and Mount Emei also performed well, benefiting from high tourism during multiple holidays. Leisure surrounding areas were more affected by the typhoon weather and consumer downgrade trends. - Haidilao saw stable customer numbers compared to last year, with relatively weak demand for mooncake gift boxes. In the first two days of the Mid-Autumn holiday in 2024, Haidilao hotpot restaurants received over 3.2 million customers nationwide. Sales of mooncake products at the stores leading up to the Mid-Autumn holiday in 2024 showed a 40% decline year-on-year, with an average price of 83.36 RMB, down 3% from 2023 and 4% from 2022. Risk factors: Demand recovery falls short of expectations, travel costs decrease, weather uncertainty.