Singapore the top beneficiary of China’s reopening: Maybank

CHINA’s outbound tourism recovery is accelerating, and will hit more meaningful levels by mid-year, said a Maybank Securities report. 

After China reopened its borders in January, outbound tourism recovery was “tepid” for the first two months. Seat capacity was lacking, and airfares were high, Maybank analyst Yin Shao Yang said on Friday (Apr 14).

However, data provided by OAG about the rise in seat capacity from China to selected countries in March 2023, relative to 2019, suggested that the recovery in Chinese outbound tourism is just beginning, he noted.

With Chinese tourists travelling longer and spending more than in pre-Covid times, the brokerage issued a “positive” outlook for the Asean tourism sector.

Maybank said Singapore will be the top beneficiary of China’s reopening as it is a preferred destination for high-net-worth Chinese and single Chinese women. 

It also expects a recovery in seat capacity from China to Singapore to 65 per cent of 2019 levels. 

Singapore-listed hospitality and property trusts such as Far East Hospitality Trust , Frasers Hospitality Trust , CDL Hospitality Trusts and CapitaLand Integrated Commerical Trust were potential beneficiaries of the increased Chinese tourism exposure, said the report. 

These trusts were given a “buy” rating by the brokerage. 

Stocks such as Genting Singapore , Singapore Airlines and Shangri-La Asia were also cited as potential beneficiaries. 

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The report noted that Thailand remains the top Asean destination for most Chinese travellers. Maybank picked Thailand-listed Erawan and Airports of Thailand as counters that would benefit from China’s reopening. 

Yin added that while Malaysia was not a top destination for most Chinese tourists, data from WeChat identified the country’s AirAsia Group as the most popular airline in China.

The analyst highlighted Kuala Lumpur-listed Capital A and Pavilion real estate investment trust as his top picks for the Asean tourism sector. 

“Travel from China to Singapore will continue to lead that from China to Malaysia and from China to Thailand,” said Yin.

In the near term, travel from China to Singapore will recover the fastest to 2019 levels, compared to Malaysia and Thailand, he added.