Investment Rating - The investment rating for the company is "Outperform the Market" (maintained) [2][5][47] Core Views - The company has accumulated over 200 million paying users through its WeChat mini-program, with a significant focus on improving ARPU (Average Revenue Per User) in 2024, showing a 50% increase compared to 2019 [3][7] - The company is expected to benefit from the ongoing recovery in tourism, with domestic travel volume projected to increase by 6.3% during the Qingming holiday and a continued positive trend for the May Day holiday [4][12] - The company's domestic platform booking growth is anticipated to outperform the industry, with outbound travel expected to create a new growth curve [4][25] - The OTA (Online Travel Agency) business profit margin is entering an upward cycle, with a projected profit margin of 26.9% in 2024, indicating room for improvement compared to industry leaders [4][39] Summary by Sections Business Review - The company was formed by the merger of Tongcheng and Elong in March 2018, focusing on differentiated positioning in the market. The strategic shift from user acquisition to ARPU enhancement began in 2023, resulting in a doubling of paying users [3][6] - The company achieved a revenue of 1.734 billion yuan in 2024, with a CAGR of 22% from 2018 to 2024, and an adjusted net profit of 2.785 billion yuan, with a CAGR of 20.4% during the same period [7][54] Future Outlook - The tourism sector is expected to continue its recovery, benefiting from policies aimed at boosting service consumption. The domestic travel volume during major holidays is projected to account for 35.8% of the annual total, an increase of 8.7 percentage points compared to 2019 [4][16] - The company is actively expanding its outbound travel business, with a projected growth of 130% in outbound flight bookings and 110% in hotel bookings by the end of 2024 [4][36] - The OTA business is expected to see profit margins improve, with a focus on optimizing marketing ROI and enhancing user engagement through targeted subsidies [4][39] Financial Projections - The company maintains adjusted net profit forecasts of 3.30 billion, 3.89 billion, and 4.53 billion yuan for 2025, 2026, and 2027, respectively, corresponding to dynamic PE ratios of 14, 12, and 10 times [5][47] - The overall profitability is expected to support a CAGR of over 17% in adjusted profits over the next three years, with current valuations still considered attractive [5][47]

Core Insights - The latest report from Tongcheng Travel predicts that the tourism market during the "May Day" holiday in 2025 is expected to reach a new high compared to the same period in 2023, indicating a sustained benefit from the holiday economy [1] Group 1: Market Trends - The primary driver of tourism demand is the user base from non-first-tier cities, highlighting a shift in consumer behavior [1] - There is a significant trend towards quality leisure vacations, as evidenced by the higher booking rates for high-star hotels compared to budget hotels, indicating signs of consumption upgrading [1] Group 2: Travel Patterns - Tourist itineraries are expanding from domestic hotspots like Beijing, Chengdu, and Shanghai to overseas destinations such as Japan, South Korea, and Southeast Asia [1] - The overall market is expected to show a robust supply and demand dynamic, with travel peaks concentrated in the two days leading up to the holiday [1]

Core Viewpoint - The divergence in stock performance between domestic-focused Tongcheng Travel and internationally-oriented Ctrip highlights the current market sentiment favoring companies with a strong domestic presence amid global economic uncertainties [1][2]. Company Performance - Tongcheng Travel reported a revenue of 17.34 billion yuan in 2024, marking a year-on-year increase of 45.8%, with adjusted EBITDA reaching 4.05 billion yuan, up 29.7% [1]. - Ctrip's international business revenue accounted for approximately 10% of its total revenue in 2024, with a notable increase to 14% in Q4 2024 [1]. Market Trends - The ongoing "tariff war" initiated by the Trump administration has led to a decline in international tourism, particularly affecting travel from Canada to the U.S., with a 23% drop in land border crossings and a 13% decrease in air travel in February 2025 [2]. - Domestic tourism in China remains robust, with 501 million domestic trips taken during the 2025 Spring Festival, a 5.9% increase year-on-year, and total spending reaching 677 billion yuan, up 7.0% [3]. Investment Sentiment - The capital market is increasingly viewing companies like Tongcheng Travel, which focus on the domestic market, as safer investment options amid rising global economic risks [1][3].

Core Insights - The demand for flower viewing trips is rapidly increasing, with a 39% year-on-year rise in related search interest, indicating a shift from simple photo opportunities to more curated social media content [1][5][8] Group 1: Popular Flower Viewing Destinations - Luoyang is the top destination for peony viewing, with a 37% month-on-month increase in tourism search interest in March [5] - Other popular peony viewing spots include Caozhou Peony Garden in Heze and Daming Palace Ruins Park in Xi'an [5][6] - For cherry blossoms, the highest search interest is in Wuhan East Lake Cherry Blossom Garden, Wuxi Yuantouzhu, and Gui'an Cherry Blossom Garden, with Wuxi's ticket bookings increasing over threefold in March [8][9] Group 2: Seasonal Trends and User Engagement - The spring season has seen a rise in themed travel activities, such as the "Spring Flower Viewing Festival" organized by Tongcheng Travel, which includes self-driving tours and local culinary experiences [10][12] - The introduction of special effects and filters by Meitu Xiuxiu enhances the photo-taking experience, encouraging users to engage more with the platform [8][9][10] Group 3: Marketing Strategies - Tongcheng Travel and Meitu Xiuxiu are collaborating to provide users with tailored photo-taking tips and themed content, such as "National Style" and "Dreamy Girl" aesthetics [6][9][11] - The launch of promotional activities, including blind boxes and discounts on travel products, aims to attract more users to participate in flower viewing events [23]

Investment Rating - The report maintains an "Accumulate" rating for the company [2][7]. Core Insights - The company's performance exceeded expectations, supported by strong monetization capabilities driving high revenue growth. The focus on refined subsidies and continuous efficiency improvements is enhancing profitability. The international business is expected to contribute as a second growth curve [3][7]. Financial Summary - Revenue for 2024 is projected to reach 17.34 billion RMB, reflecting a year-on-year increase of 49.12%. Adjusted net profit is expected to be 2.79 billion RMB, up 26.66% year-on-year. The adjusted EBITDA is forecasted at 4.05 billion RMB, with an adjusted EBITDA margin of 29.65% [6][7]. - The company achieved revenue of 4.24 billion RMB in Q4 2024, a year-on-year increase of 34.76%. The core OTA segment generated revenue of 3.46 billion RMB, up 20.2% year-on-year. Adjusted net profit for Q4 was 660 million RMB, reflecting a year-on-year increase of 36.82% [7]. Market Performance - The current stock price is 19.12 HKD, with a 52-week price range of 12.70 to 22.30 HKD. The target price is set at 25.97 HKD, based on a 16x PE valuation for 2025, leading to a target market capitalization of 54.3 billion RMB [2][7].

公 司 研 究 华福证券 旅游综合 2025 年 03 月 25 日 同程旅行（00780.HK） 核心 OTA 盈利能力上行，国际业务快速扩张 | 证 | 财务数据和估值 | 2023A | 2024A | 2025E | 2026E | 2027E | | --- | --- | --- | --- | --- | --- | --- | | 券 | 主营收入（百万元） | 11,896 | 17,341 | 19,661 | 22,511 | 25,632 | | | 增长率 | 81% | 46% | 13% | 14% | 14% | | 研 | 归母净利润（百万 | 1,554 | 1,974 | 2,606 | 3,147 | 3,752 | | 究 | 元） 增长率 | 1,164% | 27% | 32% | 21% | 19% | | 报 | EPS（元/股） | 0.67 | 0.85 | 1.12 | 1.35 | 1.61 | | 告 | 市盈率（P/E） | 27.4 | 21.6 | 16.3 | 13.5 | 11.3 | | | 市净率（P/B） | 2.4 | 2.1 | ...

公 司 研 究 华福证券 旅游综合 2025 年 03 月 25 日 同程旅行（00780.HK） 核心 OTA 盈利能力上行，国际业务快速扩张 投资要点： 经调整净利润高于彭博一致预期，核心 OTA 盈利改善明显： 公 司 财 2024Q4 同程旅行实现营收 42.4 亿元/同比+34.8%，经调整净利润 6.6 亿元/同比+36.8%/经调整净利润率 15.6%，业绩高于预期主要来自 于核心 OTA 业务经营利润率同比+6.8pct 至 28.4%，核心业务盈利能力 明显改善。 业务拆分来看，核心 OTA 收入稳健增长，国际业务快速扩张： 报 点 评 收入端，2024Q4 交通业务收入 17.2 亿元/同比+17.0%，其中国际 机票市场份额快速扩张，全年业务量同比增长超 130%；住宿业务收入 11.4 亿元/同比+28.6%，其中国际酒店保持行业领先增速，全年业务量 同比增长超 110%；其他业务收入 6.0 亿元/同比+14.8%，其中艺龙酒店 科技平台保持扩张趋势，在营酒店规模近 2300 家；度假业务收入 7.8 亿元，产品和服务价值驱动旗下旅行社门店超 1000 家。经营利润端， 2024Q4 ...

Investment Rating - The report maintains a "Buy" rating for the company [1][9]. Core Insights - The core online travel agency (OTA) platform shows strong growth momentum, with notable performance in international business. In Q4 2024, the core OTA achieved revenue of 3.46 billion yuan (up 20% year-on-year) and an operating profit margin of 28.4% (up 4.8 percentage points year-on-year) [5]. - The company reported a total revenue of 4.24 billion yuan in Q4 2024, representing a year-on-year increase of 34.8%, and an adjusted net profit of 660 million yuan (up 36.8% year-on-year) [4][5]. - The company is focusing on vertical expansion in the vacation business, which contributed additional revenue, achieving 780 million yuan in Q4 2024 [5]. Financial Performance - For the fiscal year 2024, the company achieved a total transaction volume of 54.7 billion yuan (up 2.2% year-on-year) [4]. - The average monthly paying user count reached 41 million in Q4 2024, a year-on-year increase of 9.3%, with the total annual paying user count reaching 238 million (up 1.5% year-on-year) [5]. - The company’s revenue projections for 2025-2027 are adjusted to 19.5 billion, 22.8 billion, and 25.8 billion yuan respectively, with corresponding net profits of 2.56 billion, 3.08 billion, and 3.61 billion yuan [8]. Market Position - The company is positioned as a leading OTA platform in the lower-tier market, benefiting from the release of domestic travel demand, increased penetration in lower-tier markets, and the recovery of international business [8]. - The company’s market capitalization target for 2025 is set at 49.9 billion yuan, with a target price of 23 HKD per share [8].

Summary of Tongcheng Travel Holdings Conference Call Company Overview - **Company**: Tongcheng Travel Holdings - **Industry**: Online Travel Agency (OTA) within the China Internet and Other Services sector - **Stock Rating**: Overweight - **Price Target**: HK$25.00, representing a 36% upside from the current price of HK$18.38 as of March 20, 2025 [4][4][4] Key Financial Results - **4Q24 Performance**: - Core OTA revenue increased by 20% year-over-year (YoY), exceeding expectations by 1% [2][2] - Total revenue grew by 35%, outperforming estimates by 5 percentage points, driven by a robust tourism sector [2][2] - Adjusted profit rose by 37% YoY, 9% above forecasts, attributed to savings in selling and marketing (S&M) expenses [2][2] - Annual dividend declared at HK$0.18 per share, a 20% increase YoY [2][2] 2025 Outlook - **Valuation**: Currently trading at 13x 2025 estimated P/E, a 35% discount compared to peers like TCOM, marking the deepest discount in three years despite a favorable growth outlook [2][2] - **Margin Guidance**: Management anticipates an upward trend in margins, with a projected improvement of over 1 percentage point for the core OTA business [2][2] Growth Drivers 1. **Domestic Travel Demand**: Management expects OTA revenue growth to be 2-3 times the industry average in 1Q25, targeting 14-19% growth compared to the government's forecast of 6-7% for travel consumption during the Chinese New Year [7][7] 2. **Non-Core Business Growth**: Segments such as advertisement, property management services (PMS), hotel management, and membership are expected to sustain over 30% growth for the year [7][7] 3. **Margin Improvement**: Enhanced efficiency in S&M expenses is anticipated to continue, with a focus on cross-selling strategies [7][7] Risks and Challenges - **Tourism Business Pressure**: The acquired tourism segment may face stagnation due to reliance on low-margin packaged tours to Thailand, but this is expected to have minimal impact on overall profitability [7][7] - **Market Competition**: Potential intensification of competition in lower-tier cities could affect margins and pricing strategies [14][14] Additional Insights - **Market Position**: The company is viewed as undervalued relative to its growth potential, with a strong emphasis on improving operational efficiency and expanding its market share in the OTA space [1][1] - **Financial Metrics**: - Revenue projections for 2025 are estimated at RMB 19.39 billion, with net income expected to reach RMB 3.09 billion [4][4] - The company has shown resilience with a net profit margin of 8.3% in 4Q24, despite a decline from previous quarters [10][10] This summary encapsulates the key points from the conference call regarding Tongcheng Travel Holdings, highlighting its financial performance, growth outlook, and potential risks in the current market environment.

Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for its stock performance in the coming months [6]. Core Insights - The company's revenue for 2024 is projected to reach 173.41 billion yuan, reflecting a year-on-year growth of 45.8%. The core OTA platform is expected to generate 142 billion yuan, with a growth rate of 22.1% [6]. - The adjusted net profit for 2024 is forecasted at 27.9 billion yuan, an increase of 26.7% compared to the previous year. The adjusted diluted EPS is estimated to be 1.20 yuan [2][6]. - The company is expected to achieve a breakeven point in its international business by 2025, with significant growth potential in international ticketing and hotel bookings [6]. Financial Performance Summary - **Revenue Forecast**: - 2024: 173.41 billion yuan - 2025: 198.61 billion yuan - 2026: 222.40 billion yuan - 2027: 243.36 billion yuan - Revenue growth rates are projected at 46%, 15%, 12%, and 9% respectively [2][6]. - **Net Profit Forecast**: - Adjusted net profit for 2024 is 27.9 billion yuan, with projections of 32 billion yuan in 2025, 39 billion yuan in 2026, and 45 billion yuan in 2027 [2][6]. - **Earnings Per Share (EPS)**: - Adjusted diluted EPS is expected to grow from 1.20 yuan in 2024 to 1.93 yuan by 2027 [2][6]. - **Profitability Metrics**: - The adjusted PE ratio is projected to decrease from 15.36 in 2024 to 9.50 in 2027, indicating improving valuation [2][6]. User Engagement and Growth - The company reported a monthly average of 43.1 million paying users in 2024, a 4.4% increase year-on-year, with annual paying users reaching 240 million, marking a 1.5% growth [6]. - The average revenue per user (ARPU) increased by 44%, with the frequency of user consumption rising from 5.5 times in 2019 to 8.1 times in 2024 [6]. Cost Management and Profitability - The report highlights improved cost management, with a decrease in service development, sales, and administrative expenses as a percentage of revenue [6]. - The adjusted net profit margin for the core OTA platform is projected to improve, indicating ongoing enhancements in profitability [6].