Core Viewpoint - UBS expects Tongcheng Travel's core OTA revenue to achieve a 14% year-on-year growth in the third quarter, approaching the upper end of its previous guidance of 10%-15% [2] Revenue Insights - Despite normalized travel demand during the National Day holiday, Tongcheng's hotel revenue is expected to remain resilient, with accommodation revenue growth likely nearing the mid-teens percentage range [2] - In the transportation segment, third-quarter revenue is anticipated to achieve high single-digit year-on-year growth [2] Target Price Adjustment - UBS has raised the target price for Tongcheng Travel from HKD 25.5 to HKD 26.5 while maintaining a "Buy" rating [2]

Core Viewpoint - UBS forecasts that Tongcheng Travel's core OTA revenue will continue to grow steadily in Q3, with a year-on-year increase of 14%, approaching the previous guidance range of 10-15% [1] Group 1: Revenue Growth - The travel demand during the National Day holiday has become normalized, and UBS believes that Tongcheng's hotel revenue will remain resilient, predicting accommodation revenue growth close to mid-teens level [1] - In terms of transportation business, UBS predicts that Tongcheng's revenue in Q3 will record high single-digit growth year-on-year [1] Group 2: Target Price and Rating - UBS has raised its target price for Tongcheng Travel from HKD 25.5 to HKD 26.5 and maintains a "Buy" rating [1]

Core Viewpoint - Tongcheng Travel has completed the acquisition of 100% equity in Wanda Hotel Management (Hong Kong) Co., Ltd. for a transaction price of 2.49 billion yuan, marking a significant expansion into the high-end hotel market and achieving full-category coverage from economy to luxury hotels [2][4] Group 1: Acquisition Details - The acquisition price of 2.49 billion yuan corresponds to a valuation of 9.5 times the adjusted EBITDA for Wanda Hotel Management in 2023, which is lower than competitors like Huazhu (10.5 times) and Atour (19.8 times) [2] - Wanda Hotel Management operates as a light-asset management entity with a portfolio that includes nine brands such as Wanda Reign (luxury) and Wanda Vista (premium), with 222 hotels in operation and over 40,000 rooms as of June 2025 [2] - The acquisition allows Tongcheng Travel to leverage Wanda's established high-end brand matrix and management experience to quickly enter the high-end market, while also providing digital empowerment to Wanda through Tongcheng's online traffic operation capabilities [2][4] Group 2: Market Context and Strategic Implications - The acquisition is seen as a strategic move for Tongcheng Travel to respond to the OTA industry's shift from price competition to quality competition, aligning with the growing demand for high-end hotels in second- and third-tier cities due to consumer upgrades [3] - The partnership is expected to enhance both companies' capabilities, with Wanda's management expertise complementing Tongcheng's digital insights, thereby creating a more robust hotel management ecosystem [4][6] - Tongcheng Travel plans to maintain the independent development of the Wanda hotel brand while fostering innovation in hotel management to tap into the growth potential of the domestic hotel market [6]

Core Viewpoint - The investment strategy involves reallocating funds into the Guangfa Value Leading Mixed Fund, which focuses on sectors with potential for recovery, particularly in tourism and aviation, despite recent market downturns [1]. Fund Reallocation - The reallocation targets the Guangfa Value Leading Mixed Fund, which is characterized as a fund focused on the "airline + OTA platform" sector, effectively functioning like an index ETF while being actively managed [1]. - The rationale for this reallocation is to take profits from funds that have appreciated significantly and invest in those with lower growth, aiming to control portfolio drawdowns [1]. Sector Analysis - **Aviation Sector**: - The aviation industry faces challenges due to a decline in business travel and reduced consumer spending, impacting passenger numbers [5]. - Factors such as currency exchange rates, fuel costs, and aircraft supply are seen as favorable for the aviation sector, with a potential for recovery if consumer demand improves [6][12]. - Recent data indicates a strong willingness among consumers to travel, with domestic travel during the recent holiday period reaching 888 million trips, a 16% increase year-on-year [12]. - **Tourism Sector**: - The tourism sector is divided into four sub-sectors: duty-free (China Duty-Free Group and Shanghai Airport), attractions (Songcheng Performance and Overseas Chinese Town), airlines (Eastern Airlines, Southern Airlines, Air China, Spring Airlines), and hotels (Jinjiang and Shouqi) [4]. - The duty-free segment is struggling with declining consumer purchasing power, leading to reduced profit margins [4]. - The attractions sector is volatile, with visitor numbers fluctuating significantly, impacting financial stability for many companies [4]. - The hotel industry is facing intense competition, with new entrants emerging post-pandemic, leading to continued market saturation [4]. Investment Outlook - The aviation and duty-free sectors are viewed as having potential investment value, contingent on a recovery in consumer spending [5]. - The overall sentiment suggests that while the tourism and hotel sectors may present risks, the aviation sector could see significant upside if consumer demand is stimulated through effective policy measures [12].

Core Insights - The National Day and Mid-Autumn Festival holiday saw a significant increase in domestic travel and spending, with 888 million trips taken and total expenditures reaching 809 billion yuan, marking an increase of 1.23 billion trips and 108.2 billion yuan compared to the previous year [1] Group 1: Travel Trends - The holiday's travel themes included red tourism, autumn scenery, and moon viewing, with small cities offering a combination of these attractions becoming popular destinations [1] - Popular red tourism sites included Jinggangshan in Jiangxi, Yan'an in Shaanxi, and Changsha in Hunan, attracting large numbers of visitors [1] - The trend of "chasing autumn" led to high hotel bookings in over 2,000 counties, with the highest demand in Jiuzhaigou County, Sichuan [2] Group 2: Consumer Behavior - There was a 3% increase in long-distance travel orders compared to last year, with over 20% more users booking multiple domestic cities [2] - The "night economy" gained traction, with a 200% increase in searches for night tours, and venues like the Shanghai Pudong Art Museum seeing a fivefold increase in night attendance [3] - The collaboration between Wanda Films and the game "Love and Deep Space" showcased the rise of cross-industry marketing targeting younger consumers [3] Group 3: Market Dynamics - Non-first-tier cities saw a 90% increase in high-quality hotel bookings, indicating a shift in consumer preferences towards these locations [2] - The overall hotel booking volume in popular domestic cities increased by over 20%, while outbound travel destinations experienced a 30% rise in flight bookings [2] - The holiday period featured over 300 large-scale light shows, enhancing the appeal of night tourism [3]

Core Insights - The "super golden week" during the National Day and Mid-Autumn Festival saw record-high tourism activity, with an estimated 2.432 billion trips made, averaging 304 million trips per day, a year-on-year increase of 6.2% [1] Group 1: Travel Trends - There is a noticeable trend towards long-distance and high-quality travel, with a significant increase in bookings for multi-city trips and high-quality accommodations [2][5] - The younger demographic, particularly those aged 23 to 40, has become the main force in outbound travel, with a 63% increase in international ticket purchases among teenagers aged 13 to 17 [3][6] - The demand for personalized and immersive travel experiences is rising, with travelers increasingly seeking unique destinations and experiences rather than traditional tourist spots [4][5] Group 2: Travel Behavior Changes - Travelers are shifting from standardized group tours to customized itineraries, often with smaller group sizes and specific themes [4] - The popularity of night tourism has surged, with a 200% increase in searches for night activities during the holiday period [9] - The trend of "串游" (multi-destination travel) has expanded, with travelers exploring over 180 countries and regions, reflecting a shift from classic to niche destinations [5] Group 3: Economic Impact - The cost of travel has increased significantly, with many travelers facing higher prices for flights and accommodations compared to previous years [10][12] - The average domestic flight price during the holiday was 849 yuan, showing stability compared to previous years, while long-distance travel demand has notably increased [11] - The trend of staggered travel has gained popularity, allowing travelers to avoid peak prices and enhance their travel experience [12]

Core Insights - The report highlights changes in the Hong Kong Stock Connect holdings, indicating which companies saw the largest increases and decreases in ownership percentages over recent trading days [1][2][3] Summary by Category Recent Changes in Holdings - The companies with the largest increases in Hong Kong Stock Connect holdings include: - Canggang Railway (02169) with an increase of 10.05% to a holding of 43.11% - Dazhong Public Utilities (01635) with an increase of 7.35% to a holding of 67.37% - NetDragon (00777) with an increase of 3.55% to a holding of 12.78% [1][3] - The companies with the largest decreases in Hong Kong Stock Connect holdings include: - Southern Hang Seng Technology (03033) with a decrease of 0.60% to a holding of 60.24% - Hua Hong Semiconductor (01347) with a decrease of 0.03% to a holding of 24.12% - Tongcheng Travel (00780) with a decrease of 0.03% to a holding of 12.34% [1][2] Top 20 Holdings Changes - The top 20 companies with the largest increases in ownership percentages include: - Hang Seng China Enterprises (02828) with an increase of 0.02% to a holding of 1.17% - Huaxia Hang Seng Technology (03088) with an increase of 0.01% to a holding of 20.15% - Power Assets Holdings (00006) with no change, holding at 7.08% [2][3] - The top 20 companies with the largest decreases in ownership percentages include: - Southern Hang Seng Technology (03033) with a decrease of 0.60% to a holding of 60.24% - Hua Hong Semiconductor (01347) with a decrease of 0.03% to a holding of 24.12% - Tongcheng Travel (00780) with a decrease of 0.03% to a holding of 12.34% [2][3] 5-Day and 20-Day Trends - Over the last 5 trading days, the companies with the largest increases in ownership percentages include: - Canggang Railway (02169) with an increase of 10.05% - Dazhong Public Utilities (01635) with an increase of 7.35% - NetDragon (00777) with an increase of 3.55% [3][4] - Over the last 20 trading days, the companies with the largest increases in ownership percentages include: - Dazhong Public Utilities (01635) with an increase of 34.12% - Canggang Railway (02169) with an increase of 31.45% - Shankou Holdings (00412) with an increase of 13.53% [4]

Group 1 - The domestic tourism market experienced a surge during the 8-day National Day and Mid-Autumn Festival holiday, with "multi-destination tours" becoming a popular choice among travelers [1] - The average booking volume for transportation-related products increased by 5% year-on-year, while hotel, tour packages, and ticket bookings rose by 4.6% [1] - Emerging destinations saw significant growth in orders, with orders for Jingdezhen increasing by 60%, and orders for the Luzhou Wine Festival rising by 45% [1] Group 2 - The popularity of smaller cities is attributed to the opening of new highways and railways, enhancing travel convenience within a 300-kilometer radius [2] - The proliferation of AI assistants has made travel planning more accessible, with the AI product "Ask One" from Fliggy seeing a fivefold increase in daily users compared to the summer [2] - The AI photo guide feature experienced peak usage on October 3, providing professional audio explanations for various attractions [3] Group 3 - The number of users utilizing DeepTrip for travel planning significantly increased during the holiday compared to the May Day holiday, with major cities like Shanghai and Guangzhou showing the highest usage [3] - The top five provinces for travel planning using DeepTrip were Shandong, Jiangsu, Xinjiang, Yunnan, and Heilongjiang [3]

Core Insights - The recent National Day and Mid-Autumn Festival holiday has seen a significant shift towards deep travel experiences, with travelers willing to spend more on immersive activities [1][2][3] Group 1: Travel Trends - Long-distance travel and deep experiences have become the main trends during the holiday, with domestic long-distance travel orders increasing by 3 percentage points compared to last year [1] - Popular long-distance destinations include cities like Beijing, Chengdu, and Shanghai, with orders for places like Urumqi and Lhasa seeing nearly 30% growth [2] - The average spending per trip has risen by 14.6% on platforms like Fliggy, indicating a willingness to invest in travel experiences [1][6] Group 2: Demographic Shifts - The 95 post-90s generation has become the largest group of travelers, accounting for nearly a quarter of bookings, while the post-2005 generation is also showing significant growth in independent travel [6] - University students have increased their flight bookings by 63%, with international flight bookings rising by 110% [3] Group 3: Experience Over Sightseeing - Travelers are increasingly seeking emotional and experiential value from their trips, moving away from traditional sightseeing to local culinary and cultural experiences [3][5] - The search volume for "must-eat" and "must-do" lists has surged, with increases of 96% and 145% respectively since September [4][5] Group 4: Spending Behavior - Tourists are more inclined to spend on comfort and convenience, with significant growth in bookings for private car rentals and high-end travel options [5][6] - The trend of "paying for experiences" is evident, with travelers prioritizing emotional satisfaction and immersive experiences over mere sightseeing [6]

Core Insights - The report highlights resilient growth in travel demand during the National Day holiday, with a projected year-on-year increase of 6.2% in cross-regional mobility from October 1 to 8, 2024, surpassing the pre-holiday forecast of 3.2% [4][24] - The consumer services sector underperformed the broader market in September, with the A-share consumer services sector declining by 2.69%, lagging behind the CSI 300 by 5.89 percentage points [4][5] - The report emphasizes the importance of policy support for service consumption, with various measures aimed at enhancing service sector growth and consumer spending [24][25] Subsector Insights Travel Chain Sector - The travel chain sector is expected to benefit from a shift towards experience-driven consumption, with a focus on hotel and retail experiences as the market enters a low season in Q4 [4][24] - Notable performance was observed in specific regions and segments, such as a 22% increase in visitor numbers to Changbai Mountain from October 1 to 3 and significant sales at duty-free stores in Sanya [4][24] - The report suggests monitoring the recovery of the duty-free sector and the hotel industry as supply and demand dynamics stabilize [4][24] Chain Dining Sector - The dining sector shows signs of stabilization, with leading brands in tea and fast food performing well despite concerns over the expansion capabilities of traditional dining models [4][24] - The report recommends focusing on high-quality dining leaders that have adjusted their business models to enhance growth potential [4][24] Education and Human Services Sector - The education sector is poised for growth as external uncertainties diminish, with increased demand for vocational training and educational services [4][24] - The report highlights the potential of AI in education, with ongoing advancements in educational technology expected to drive growth [4][24] Investment Recommendations - The report suggests a diversified investment strategy, recommending companies such as Trip.com, Atour, Tongcheng Travel, BOSS Zhipin, and others in the consumer services sector [4][24]