Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 23.9, representing a potential upside of 30% from the recent closing price of HKD 18.38 [4]. Core Insights - The core OTA business continues to show a robust growth trend, with a 20% year-on-year increase in revenue and a 44% increase in operating profit for the fourth quarter. Overall revenue and adjusted net profit exceeded expectations by 5% and 7%, respectively [1][2]. - The company is expected to achieve an 18% year-on-year revenue growth in its core OTA business in 2025, outpacing the industry average, with an operating profit margin projected to improve to 28% [1][3]. Financial Performance Summary - In Q4, total revenue reached HKD 4.4 billion, a 13% year-on-year increase, with core OTA revenue growing by 20%. Accommodation booking revenue increased by 29%, driven by stable growth in room nights, while transportation ticketing revenue rose by 17% due to enhanced monetization from value-added services [2]. - The adjusted net profit for the fourth quarter was HKD 660 million, reflecting a 37% year-on-year increase, with a net profit margin of 15.6% [2][5]. - The average revenue per user (APU) for 2024 is projected to be HKD 2.38 billion, a 2% increase year-on-year, with annual user spending calculated at HKD 1,073, up 4% year-on-year [2][3]. AI Product Development - The company has launched its self-developed AI model, Chengxin AI, which integrates with DeepSeek to provide "AI + real-time booking" services. This application of AI is expected to enhance user interaction and order conversion efficiency, with potential long-term cost reduction in operations [3]. Valuation and Market Sentiment - The report adjusts the valuation multiple to 16.0 times the 2025 earnings, reflecting improved market sentiment. The target price has been raised to HKD 23.9 from HKD 22.5 [4].

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Insights - The company's total revenue for 2023 is projected at 11,896 million, with a year-on-year growth of 80.67%. For 2024, revenue is expected to reach 17,341 million, reflecting a growth of 45.77% [1] - The net profit attributable to shareholders for 2023 is forecasted at 1,554 million, showing a significant year-on-year increase of 1,164.41%. The net profit for 2024 is anticipated to be 1,974 million, representing a growth of 27.04% [1] - The report highlights a robust performance in the core OTA segment, with a projected revenue growth of 15-20% for 2025, driven by increased user engagement and improved operational efficiency [9][10] Financial Projections - Total revenue is expected to grow from 17,341 million in 2024 to 25,232 million by 2027, with a compound annual growth rate (CAGR) of approximately 13% [1] - The net profit attributable to shareholders is projected to increase from 1,974 million in 2024 to 3,391 million by 2027, indicating a strong growth trajectory [1] - The report anticipates an increase in earnings per share (EPS) from 0.85 in 2024 to 1.46 in 2027, reflecting a positive outlook for profitability [1] User Engagement and Market Position - The average revenue per user (ARPU) has increased by 44%, with the frequency of user purchases rising to 8.1 times annually, up from 7.5 times in 2023 [9] - The company has successfully reduced user subsidies, leading to improved profit margins and operational efficiency [9][10] - The report notes a significant recovery in cross-border travel, contributing to the overall growth of the company's revenue streams [9]

Financial Performance - Revenue increased by 34.8% year-on-year from RMB 3,144.5 million in Q4 2023 to RMB 4,237.6 million in Q4 2024[4] - Adjusted EBITDA rose by 39.4% year-on-year from RMB 715.9 million in Q4 2023 to RMB 997.7 million in Q4 2024, with an adjusted EBITDA margin increasing from 22.8% to 23.5%[4] - Adjusted net profit increased by 36.8% year-on-year from RMB 482.5 million in Q4 2023 to RMB 660.2 million in Q4 2024, with an adjusted net profit margin rising from 15.3% to 15.6%[4] - Total revenue for the fiscal year 2024 reached RMB 17,340.7 million, a 45.8% increase from RMB 11,896.2 million in 2023[11] - Adjusted EBITDA for the fiscal year 2024 was RMB 4,050.2 million, up 29.7% from RMB 3,123.9 million in 2023, with an adjusted EBITDA margin decreasing from 26.3% to 23.4%[11] - Adjusted net profit for the fiscal year 2024 increased by 26.7% year-on-year to RMB 2,785.4 million from RMB 2,199.1 million in 2023[11] - Total revenue for the year ended December 31, 2024, was RMB 17,340,686 thousand, an increase of 46.0% compared to RMB 11,896,244 thousand in 2023[92] - Net profit for the year was RMB 1,988,266 thousand, up 27.0% from RMB 1,565,563 thousand in the previous year[93] User Growth - Average monthly paying users grew by 9.3% year-on-year from 37.5 million in Q4 2023 to 41.0 million in Q4 2024[4] - The number of annual paying users rose by 1.5% year-on-year from 234.7 million in 2023 to 238.3 million in 2024[11] - The average monthly paying users grew by 4.4% year-over-year to 43.1 million, while annual paying users reached a record high of 238.3 million, up 1.5%[18] - The cumulative service user count for the year reached 1.928 billion, a 9.3% increase from 1.764 billion in 2023[15] Revenue Breakdown - Revenue from the core online travel platform increased by 22.1% to RMB 14,199.4 million for the year ended December 31, 2024[35] - Accommodation booking service revenue rose by 19.7% to RMB 4,668.2 million, driven by increased demand and enhanced cross-selling strategies[35] - Transportation ticketing service revenue increased by 19.9% to RMB 7,229.0 million, attributed to higher demand for services and value-added products[37] - Revenue from the accommodation business for Q4 2024 increased by 28.6% to RMB 1,135.1 million, with annual revenue reaching RMB 4,668.2 million, up 19.7%[24] - Revenue from the transportation ticketing service for Q4 2024 grew by 17.0% to RMB 1,723.0 million, with annual revenue of RMB 7,229.0 million, a 19.9% increase[23] - Revenue from other business segments reached RMB 599.2 million in Q4 2024, a year-on-year increase of 14.8%[25] - For the full year 2024, revenue from other business segments grew by 35.5% to RMB 2,302.2 million[25] - Revenue from the vacation business in Q4 2024 was RMB 780.2 million, and for the full year, it reached RMB 3,141.2 million[25] Expenses and Costs - Sales cost rose by 97.2% from RMB 3,158.0 million in 2023 to RMB 6,227.2 million in 2024, with the sales cost as a percentage of revenue increasing from 26.5% to 35.8%[40] - Service development expenses increased by 9.9% to RMB 2,000.9 million in 2024, with the proportion of service development expenses to revenue decreasing from 14.7% to 11.0%[41] - Sales and marketing expenses grew by 25.7% to RMB 5,620.7 million in 2024, with the proportion to revenue decreasing from 37.3% to 32.2%[42] - Administrative expenses increased by 69.6% to RMB 1,206.2 million in 2024, with the proportion to revenue rising from 4.1% to 5.4%[43] Cash Flow and Investments - Cash and cash equivalents at the end of 2024 amounted to RMB 8,020.0 million, an increase from RMB 5,192.4 million at the end of 2023, marking a rise of 54.5%[77] - Operating cash flow for 2024 was RMB 2,969.88 million, down from RMB 4,003.44 million in 2023, indicating a decrease of 26.0%[78] - The net cash used in investing activities for 2024 was RMB 834.26 million, a decrease from RMB 1,762.22 million in 2023, indicating a reduction of 52.7%[78] - The net cash generated from financing activities for the year ended December 31, 2024, was RMB 678.8 million, primarily from net proceeds of long-term and short-term borrowings amounting to RMB 1,415.3 million[81] Corporate Governance and Structure - The company has updated its reporting structure to better reflect its business strategy and financial performance across its core online travel platform and vacation segments[6] - The company has established a new internal reporting structure effective January 1, 2024, separating the reporting of its core online travel platform and offline travel agency and vacation-related businesses[108] - The board of directors consists of both executive and independent non-executive members, ensuring diverse governance[158] Accounting and Compliance - The financial statements are prepared in accordance with International Financial Reporting Standards and the Hong Kong Companies Ordinance[101] - The company will apply the new accounting standards starting from January 1, 2027, and will restate comparative information for the fiscal year ending December 31, 2026, in accordance with IFRS 18[107] - The group has not early adopted certain new accounting standards that will come into effect after December 31, 2024, and does not expect significant impacts from these standards[103] Shareholder Information - The company declared a final dividend of HKD 0.15 per share, totaling approximately HKD 341.5 million (around RMB 311.7 million) for the year ended December 31, 2023[124] - The company plans to propose a final dividend of HKD 0.18 per share for the year ended December 31, 2024, with an estimated total dividend payout of approximately HKD 419,177,424.06[147] - The record date for the proposed final dividend is July 7, 2025, with share transfer registration suspended from July 3, 2025, to July 7, 2025[149]

Investment Rating - The report maintains a "Buy" rating for the company [5] Core Views - The company's core OTA (Online Travel Agency) profitability continues to improve, driven by marketing ROI enhancement and operational efficiency [3][4] - The company is expected to achieve sustained profitability improvement through optimized marketing efficiency and operational leverage [5] - The company's international business is growing rapidly, with international ticket sales increasing by over 110% YoY and international accommodation bookings growing by over 130% YoY in Q3 2024 [5] - The company's marketing strategy has been optimized, leading to a reduction in sales and marketing expenses ratio to 29.2% in Q3 2024, down 9.1 percentage points YoY [5] - The company's user acquisition efficiency has improved, with average monthly paying users reaching 46 million in Q3 2024, a 5.0% YoY increase [5] Financial Performance - The company's revenue is projected to grow from RMB 11.896 billion in 2023 to RMB 22.594 billion in 2026, with a CAGR of 23.8% [5] - Adjusted net profit is expected to increase from RMB 2.199 billion in 2023 to RMB 3.866 billion in 2026, with a CAGR of 20.7% [5] - Gross margin is forecasted to improve from 64.2% in 2024E to 66.8% in 2026E [5] - Adjusted operating margin is expected to rise from 16.0% in 2024E to 17.1% in 2026E [5] Industry Trends - The tourism industry experienced strong growth during the 2024 National Day holiday, with travel numbers reaching 800 million, a 6% YoY increase [5] - The 2025 Spring Festival travel season is expected to see robust demand, with average ticket prices rising to RMB 810, and international ticket prices reaching nearly RMB 4,000, a 20% increase compared to usual periods [5] - The company has enhanced its outbound service capabilities, particularly in Asia, by strengthening partnerships with international OTAs, hotels, and airlines [5] User Metrics - The company's 12-month ARPU (Average Revenue Per User) reached RMB 70 in Q3 2024, a 53% YoY increase [5] - The company's Black Whale membership program has surpassed 78 million members, with ARPU 2.7 times higher than regular members [5] - The company's 15-day cross-selling rate improved to 12% in Q3 2024, up 2 percentage points YoY [5]

Investment Rating - The report maintains a "Buy" rating for the company, with an expected adjusted PE of 15/13/11 times for 2024-2026 [1][61] Core Views - The company's 24Q3 revenue reached RMB 4.991 billion, a 51% YoY increase, exceeding guidance, with adjusted net profit of RMB 910 million, up 46.6% YoY [1] - Core OTA revenue grew 22% YoY to RMB 4.013 billion, with a significant improvement in profitability, as the core OTA margin increased by 5.9 ppts YoY to 31.3% [1] - The company's user value has improved significantly, with ARPU growing 53% YoY to RMB 70, and GMV monetization rate increasing by 2.2 ppts YoY to 6.9% [1][56] - The company is accelerating its expansion into new traffic sources and international business, with the launch of the HopeGoo platform and the establishment of an overseas headquarters in Singapore [1][59] Business Performance Summary Core OTA Business - Accommodation booking revenue grew 22% YoY to RMB 1.38 billion in 24Q3, contributing 34.3% of OTA revenue, driven by increased room nights and improved net take rate [36][40] - Transportation ticketing revenue increased 21% YoY to RMB 2.03 billion, contributing 50.5% of OTA revenue, supported by growth in air ticket sales and improved monetization of train tickets [40][41] - Other OTA business revenue grew 24% YoY to RMB 610 million, mainly driven by hotel management and online travel business growth [41] Vacation Business - Vacation business revenue reached RMB 979 million in 24Q3, up 36% QoQ, achieving a break-even with a 2.4% profit margin [1][42] - The company has expanded its offline store network to over 900 stores by the end of 24Q3 [42] Profitability - The company's adjusted net profit margin improved by 2.7 ppts QoQ to 18.2% in 24Q3, driven by optimized user subsidies, improved international business efficiency, and reduced sales expenses [1][47] - Sales expense ratio decreased by 9.1 ppts YoY and 6.0 ppts QoQ to 29.4% in 24Q3 [1][47] User Metrics and Traffic Expansion - Average monthly paying users reached 46.4 million in 24Q3, up 5% YoY, with user purchase frequency exceeding 8 times per year, compared to 5.5 times in 2019 [1][56] - The company's app DAU surpassed 3 million before the 2024 National Day holiday, a record high, with app traffic contribution increasing from 4% to 8% between August 2023 and August 2024 [1][57] International Business Expansion - The company launched the HopeGoo international travel booking platform in mid-2024, covering six major travel categories and supporting 16 currencies [59] - Through the Yilong Hotel Technology platform, the company has expanded its international guest reception capabilities, with over 400 hotels capable of serving international guests as of July 2024 [59] Future Outlook - Core OTA revenue is expected to maintain double-digit growth in 24Q4, driven by strong performance in accommodation and transportation bookings [1][60] - The company's revenue for 2024-2026 is forecasted to be RMB 17.263 billion, RMB 20.195 billion, and RMB 23.134 billion, respectively, with adjusted net profit expected to reach RMB 2.74 billion, RMB 3.252 billion, and RMB 3.872 billion [1][61]

Investment Rating - The report maintains a "Buy" rating for Tongcheng Travel with a target price of HKD 20.18 per share, based on a 25-year 13X PE valuation [2][6] Core Views - Tongcheng Travel's 24Q3 GMV grew 2.4% YoY to RMB 72.8 billion, with revenue increasing 51.3% YoY to RMB 4.99 billion [1] - Adjusted net profit for 24Q3 rose 46.6% YoY to RMB 910 million, with an adjusted net margin of 18.2% [1] - 24Q3 adjusted EBITDA increased 51.6% YoY to RMB 1.32 billion, maintaining a 26.4% margin [1] - MPU grew 5% YoY to 46.4 million, while APU increased 3.4% YoY to 230 million, and ARPU surged 53.2% YoY [1] Business Segment Performance - Transportation ticketing revenue grew 20.6% YoY to RMB 2.03 billion in 24Q3 [2] - Accommodation booking revenue increased 22.2% YoY to RMB 1.38 billion in 24Q3 [2] Operational Highlights - Sales expense ratio decreased 9.1pp YoY to 29% in 24Q3, reflecting improved marketing efficiency [2] - International ticket volume grew over 110% YoY, and international hotel room nights increased over 130% YoY in 24Q3 [2] - Cross-selling rate improved to 12% [2] Financial Projections - Revenue is forecasted to grow 44.2% YoY to RMB 17.2 billion in 2024, with further growth of 17.2% and 19.5% in 2025 and 2026 respectively [2] - Non-IFRS net profit is expected to reach RMB 2.72 billion in 2024, growing 24.4% YoY, with continued growth of 22.6% and 20.5% in 2025 and 2026 [2] - Non-GAAP EPS is projected to increase from RMB 1.21 in 2024 to RMB 1.78 in 2026 [4]

Investment Rating - Maintain "Buy" rating [5] Core Views - Adjusted net profit exceeded expectations, with significant improvement in core OTA profitability [1] - Core OTA business operating profit margin increased by 6.0 percentage points year-over-year to 31.1% [1] - Revenue from core OTA businesses grew by over 20% across all segments [1] - Monthly paying users reached a record high of 46.4 million, up 5.0% year-over-year [2] - Annual paying users reached 230 million, up 3.4% year-over-year [2] - Annual service users reached 1.88 billion, up 19.9% year-over-year [2] Business Breakdown Transportation Business - Revenue of RMB 2.03 billion, up 20.6% year-over-year [1] - International air ticket volume increased by over 110% year-over-year [1] Accommodation Business - Revenue of RMB 1.38 billion, up 22.2% year-over-year [1] - International hotel volume increased by over 130% year-over-year [1] - Cross-selling rate improved to 12% [1] Other Businesses - Revenue of RMB 610 million, up 23.7% year-over-year [1] - Elong Hotel Technology platform expanded to over 2,100 hotels [1] Vacation Business - Revenue of RMB 980 million [1] - Operating profit of RMB 23.84 million with an operating margin of 2.4% [1] Financial Forecasts - Adjusted net profit for 2024-2026 revised to RMB 2.7/3.3/3.9 billion (previously RMB 2.6/3.1/3.6 billion) [5] - PE ratios for 2024-2026 are 14/12/10x [5] - Revenue growth for 2024-2026 projected at 43%/15%/15% [2] - Net profit growth for 2024-2026 projected at 23%/26%/23% [2] Valuation Metrics - 2024E PE ratio: 20.3x [2] - 2025E PE ratio: 16.1x [2] - 2026E PE ratio: 13.0x [2] - 2024E P/B ratio: 2.0x [2] - 2025E P/B ratio: 1.8x [2] - 2026E P/B ratio: 1.6x [2] Market Position - Leading OTA player in lower-tier markets with strong competitive advantages backed by Tencent and Ctrip's traffic and inventory resources [5] - Active international market expansion expected to drive medium to long-term revenue and profit growth [5] Financial Data - 2024Q3 revenue: RMB 4.99 billion, up 51.3% year-over-year [1] - 2024Q3 adjusted net profit: RMB 910 million, up 46.6% year-over-year [1] - 2024Q3 adjusted net profit margin: 18.2% [1] - 2024Q3 core OTA operating profit: RMB 1.25 billion, up 50.4% year-over-year [1]

Investment Rating - The investment rating for the company is "Outperform the Market" [4][9]. Core Insights - The company's core business has shown significant improvement in profitability, with a year-on-year increase in per-customer contribution. In Q3 2024, the OTA operating profit margin improved by 6 percentage points, outperforming Bloomberg's expectations [1][7]. - The company's revenue for Q3 2024 reached 4.99 billion yuan, with a net profit attributable to shareholders of 790 million yuan and an adjusted net profit of 910 million yuan, representing year-on-year growth of 51.3%, 55.5%, and 46.6%, respectively [1][7]. - The OTA platform revenue was 4.01 billion yuan, up 21.6%, with an operating profit margin of 31.1%, a significant improvement from previous quarters [1][7]. Financial Performance Summary - The company's GMV for Q3 2024 was 72.8 billion yuan, a year-on-year increase of 2.4%. This growth was primarily influenced by structural impacts from industry pricing, with air ticket prices declining but ticket volumes increasing by over 20% [1][8]. - The company has focused on enhancing user value and purchase frequency through refined subsidy strategies, resulting in a 15.9% increase in the average purchase frequency per user over the past 12 months [1][8]. - The number of "Black Whale" members reached 78 million by the end of Q3, a 16.7% increase from Q2, with their average revenue per user (ARPU) being over 2.7 times that of regular members [1][8]. Earnings Forecast and Valuation - The adjusted net profit forecasts for 2024-2026 have been raised to 2.75 billion, 3.28 billion, and 3.83 billion yuan, respectively, with corresponding dynamic P/E ratios of 14, 12, and 10 times [2][9]. - The company is expected to benefit from low-cost traffic from the WeChat ecosystem and the penetration of lower-tier markets, while also needing to monitor the effectiveness of new channel cultivation and the pace of international business expansion [1][9].

Investment Rating - The report maintains a "Buy" rating for the company with a 6-month target price of HKD 22.5, representing a 27% upside from the current price [7][4] Core Views - The company's core OTA business profitability improved significantly, driving overall net profit above expectations [1][2] - Core OTA operating margin increased by 6 percentage points YoY to 31% in Q3 2024 [1][2] - Adjusted net profit reached a record high of RMB 910 million in Q3 2024, exceeding expectations by 14% [2] - The company's overall monetization rate improved to 6.9% in Q3 2024, up from 4.6% in Q3 2023 [3] Business Performance - Total revenue in Q3 2024 reached RMB 4.991 billion, a 51% YoY increase [2] - Core OTA revenue grew 22% YoY, with accommodation booking and transportation ticketing revenues increasing by 22% and 21% respectively [2] - Vacation business contributed RMB 980 million, accounting for 20% of total revenue [2] - International ticket bookings increased by over 110% YoY, while international hotel room nights grew by over 130% [3] User Metrics - APU (Annual Paying Users) reached 230 million, with annual spending per user increasing 15% YoY to RMB 1,095 [3] - MPU (Monthly Paying Users) grew 5% YoY to 46.4 million [3] - Black Whale membership exceeded 78 million, with spending 2.7 times that of regular users [3] Financial Projections - Core OTA revenue is expected to grow 18% in 2025, driven by cross-selling, user value growth, and international business expansion [4] - Adjusted net profit margin is projected to improve to 17% in 2025 [4] - The company is valued at 14x 2025 P/E, with a target price of HKD 22.5 [4] Operational Highlights - Accommodation booking ADR declined less than 5% YoY, with room nights maintaining growth [3] - Air ticket bookings grew 20% YoY, outperforming the overall civil aviation growth rate of 12% [3] - 15-day cross-selling rate improved by 2 percentage points to 12% [3]

Investment Rating - The report maintains a "Recommend" rating for the company [4][9] Core Views - The company's Q3 2024 revenue reached RMB 4.99 billion, a YoY increase of 51.3%, exceeding expectations [2] - Core OTA business revenue was RMB 4.01 billion, up 21.6% YoY, in line with expectations [2] - Net profit attributable to shareholders was RMB 790 million, a YoY increase of 55.5% [2] - Non-GAAP net profit was RMB 910 million, up 46.6% YoY [2] - Hotel take rate improvement drove revenue growth in the accommodation booking segment, with international room nights increasing by 130% YoY [2] - Transportation ticketing revenue reached a historical high of RMB 2.03 billion, driven by a 110% YoY increase in international air ticket volume [2] - Other revenue grew 23.7% YoY to RMB 610 million, supported by strong growth in hotel management and online vacation businesses [2] - The company's average monthly paying users reached 46.4 million, a 5% YoY increase, with ARPU rising to around RMB 70, up RMB 6 QoQ [3] - Non-GAAP net margin was 18%, with core OTA platform margin reaching 31%, a post-pandemic high [3] Financial Forecasts - Revenue is expected to grow from RMB 17.212 billion in 2024E to RMB 24.166 billion in 2026E, with a CAGR of 18.5% [6] - Non-GAAP net profit is projected to increase from RMB 2.732 billion in 2024E to RMB 4.468 billion in 2026E [6] - Adjusted diluted EPS is forecasted to grow from RMB 1.18 in 2024E to RMB 1.92 in 2026E [6] - The company's P/E ratio is expected to decline from 14.01X in 2024E to 8.57X in 2026E [6] Business Performance - Accommodation booking revenue grew 22.2% YoY to RMB 1.38 billion, outperforming ADR and overall hotel industry growth [2] - Vacation segment revenue reached RMB 980 million [2] - The company has 230 million annual paying users and 1.88 billion annual cumulative service users, up 3.4% and 19.9% YoY respectively [3] - Gross margin was 63% in Q3 2024, down 11.2 ppts YoY but only 1.2 ppts QoQ [3] - Sales and marketing expenses as a percentage of revenue decreased by 9.1 ppts YoY to 29% [3]