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As the Chinese Lunar New Year unfolded, the country witnessed an unprecedented surge in consumer spending, catapulting figures to astonishing heights not seen since the pre-pandemic era. The eight-day long holiday, spanning from February 10 to 17, bore witness to an impressive 34.3% year-over-year increase in domestic trips, reaching a staggering 474 million. Equally impressive, tourism receipts soared by 47.3%, amounting to 632.6 million yuan ($89 million).
The average spending per trip during this year’s festivity touched 1,335 yuan, far surpassing the 1,238 yuan recorded in 2019. Notably, an astronomical 18 million trips were via air, while another 99.5 million were made via railways – both marking a monumental increase from the pre-COVID era. The three major airlines in China, Air China Limited (OTCPK:AIRYY), China Southern Airlines (OTCPK:CHKIF), and China Eastern Airlines (OTCPK:CHEAF), bore witness to this aviation renaissance.
Adding to the suspense, Macau’s casinos experienced a windfall from the holiday travel boom. Macau received a staggering 217,448 tourists on February 12th, setting a new record as the highest daily visitor arrival since the pandemic and the second-highest daily visitor tally in history, trailing only behind the 226,326 visitors recorded on February 7, 2019. Stock-watchers are anticipating that casino-related stocks such as Wynn Macau (OTCPK:WYNMF), Wynn Resorts (WYNN), Sands China (OTCPK:SCHYY), Las Vegas Sands (LVS), MGM China (OTCPK:MCHVF), MGM Resorts (MGM), Galaxy Entertainment (OTCPK:GXYEF), SJM Holdings (OTCPK:SJMHF), Melco Resorts & Entertainment (MLCO), and Studio City International (MSC) are poised for a Q1 earnings surge.
The retail arena witnessed a similar bonanza with companies like Alibaba (BABA), Baozun (BZUN), Shein, Dada Nexus (DADA), JD.com (JD), Temu, PDD Holdings (PDD), and Shein riding the wave of holiday spending. Additionally, the Chinese box office raked in over 8 billion yuan in revenue over the eight days, signaling favorable prospects for IMAX’s (IMAX) China business.
Further igniting investor interest are China-based U.S. stocks including Yum China (YUMC), Luckin Coffee (OTCPK:LKNCY), Tuniu (TOUR), H World Group (HTHT), Jowell Global (JWEL), and Trip.com (TRIP).
While the hearty spending spree paints a rosy picture, some analysts remain watchful of China’s economic trajectory. Despite the Ministry of Commerce branding 2024 as the “Year of Consumption Promotion,” apprehensions linger regarding the sustainability of the spending surge. Notably, Nomura issued a stark warning, signaling a potential downturn in China’s economy as a result of the government’s inability to resuscitate the real estate sector.
