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: HK18.38 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.
同程旅行_2024 年第四季度业绩超预期；2025 年展望乐观