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Consumer spending during the Chinese Lunar New Year surpassed pre-pandemic levels as travel increased. Total domestic travel for the eight-day holiday from February 10 to 17 increased by 34.3% year-on-year to 474 million, while tourism revenue grew by 47.3% to 632.6 million yuan ($89 million). Average spend per trip this year it reached 1,335 yuan versus 1,238 yuan in 2019, according to a Reuters calculation. Notably, 18 million air trips were taken during the holiday period in China, while 99.5 million train trips were taken, both a sharp increase compared to pre-COVID levels. Air China Limited (OTCPK:AIRYY), China Southern Airlines (OTCPK:CHKIF) and China Eastern Airlines (OTCPK: CHEAF) are the three largest Chinese airlines.
Macau’s casinos have clearly been the beneficiaries of the holiday travel boom. On February 12, Macau received 217,448 tourists, marking the highest number of daily visitor arrivals since the pandemic and the second-highest number of daily visitors in history, behind the 226,326 visitors recorded on February 7, 2019, shortly before of the outbreak of the pandemic. The list of casino-related stocks that could see an earnings boost in the first quarter includes Wynn Macau (OTCPK:WYNMF) (OTCPK:WYNMY), Wynn Resorts (WYNN), Sands China (OTCPK:SCHYY) (OTCPK:SCHYF) , Las Vegas Sands (LVS), MGM China (OTCPK:MCHVF), (OTCPK:MCHVY), MGM Resorts (MGM), Galaxy Entertainment (OTCPK:GXYEF), SJM Holdings (OTCPK:SJMHF), (OTCPK:SJMHY), Melco Resorts & Entertainment (MLCO), Studio City International (MSC).
In the retail sector, companies such as Alibaba (BABA), Baozun (BZUN), Shein, Dada Nexus (DADA), JD.com (JD), Temu, PDD Holdings (PDD) and Shein may have benefited from the explosion of holiday spending. Another highlight of the holiday period was movie attendance, as Chinese box office receipts topped 8 billion yuan over the eight days, according to the China Film Administration. This figure bodes well for IMAX’s (IMAX) (OTCPK:IMXCF) Chinese business.
Other US-traded China-based stocks of interest include Yum China (YUMC), Luckin Coffee (OTCPK:LKNCY), Tuniu (TOUR), H World Group (HTHT), Jowell Global (JWEL), and Trip.com (TRIP ).
Looking ahead, Chinese authorities, under the banner of the Ministry of Commerce, have labeled 2024 the “Year of Consumption Promotion,” even as some analysts continue to express doubts that consumer spending will remain strong. Nomura recently warned that China’s economy could worsen in the spring because Beijing has been unable to revive the real estate sector.