Core Viewpoint - Despite a significant decline in the Hong Kong stock market, some low-priced stocks experienced substantial gains, indicating potential investment opportunities amidst market volatility [1][3]. Group 1: Market Performance - On March 21, the Hong Kong stock market saw major indices decline, with the Hang Seng Index dropping by 2.19% and the Hang Seng Tech Index falling by 3.37% [1]. - Notably, low-priced stocks such as New Yaohai surged, with a peak increase of 162.5% during the trading session [3][5]. Group 2: Company Analysis - New Yaohai, primarily engaged in luxury car distribution, reported a significant revenue decline of 39.66% year-on-year, with a net loss of 563 million HKD for the first half of the fiscal year ending September 30, 2024 [4]. - The company's luxury car sales, including brands like Lamborghini and Bentley, also saw substantial decreases, with Lamborghini sales down by 25.2% and Bentley sales down by 36.2% [4]. Group 3: Analyst Upgrades - Foreign institutions are actively raising target prices for several Chinese assets, including Tencent, China Mobile, and others, indicating a positive outlook for these companies [8][10]. - Nomura upgraded Tencent's target price from 500 HKD to 648 HKD, citing strong performance in gaming and advertising sectors [9]. - UBS raised China Mobile's target price by 14% to 103 HKD, projecting a compound annual growth rate of 5% for net profit from 2024 to 2027 [10].

Financial Data and Key Metrics Changes - In Q4 2024, the company reported net revenue of RMB4.2 billion, a 35% year-over-year increase from Q4 2023 [25] - Adjusted net profit reached RMB660 million, with an adjusted net margin of 15.6%, reflecting a 37% year-over-year improvement [29] - For the full year 2024, net revenue was RMB17.3 billion, representing a 46% year-over-year increase [33] Business Line Data and Key Metrics Changes - The core OTA business revenue grew by 20% year-over-year to RMB3.5 billion in Q4 2024 [25] - Transportation ticketing revenue reached RMB1.7 billion in Q4 2024, a 13% increase compared to Q4 2023 [26] - Accommodation reservation revenue was RMB1.1 billion in Q4 2024, representing a 29% increase year-over-year [26] - The international air ticketing business saw over 130% growth compared to 2019 levels [12] Market Data and Key Metrics Changes - The company achieved a record high of 240 million AnyPay users, indicating strong user engagement [6] - The average revenue per user (ARPU) increased by 44% year-over-year to RMB73 in 2024 [20] - The number of Black Girl members approached 90 million, an 86% increase from the previous year [19] Company Strategy and Development Direction - The company aims to deepen its presence in the domestic market while exploring internationalization opportunities [8] - A focus on technological innovation, particularly AI, is expected to enhance user experience and operational efficiency [9] - The company plans to optimize traffic operation strategies and enhance service offerings to meet diverse consumer demands [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the travel industry's recovery and growth, supported by strong domestic travel demand and government initiatives [8] - The company anticipates continued growth momentum in 2025, particularly in the accommodation and transportation segments [51] - Management highlighted the importance of adapting to changing consumer preferences and enhancing service capabilities [35] Other Important Information - The company received an AA ESG rating for the third consecutive year, reflecting its commitment to sustainability [22] - A final cash dividend of HK$0.18 per share was proposed, marking a 20% increase from the previous year [32] Q&A Session Summary Question: What are the drivers behind the gap between GMV and revenue growth? - Management explained that the gap is due to downward pressure on hotel ADR and air ticket ATV, which affected GMV growth while revenue increased due to improved take rates [40][42] Question: What is the outlook for travel demand and core OTA revenue growth? - Management expects continued growth momentum in the travel market, with core OTA revenue anticipated to grow faster than the market average [50][51] Question: How will the domestic flight volume cut impact the business? - Management noted that while the cut may increase ATV, it would have limited impact on revenue due to the reliance on value-added services [58][59] Question: What are the expectations for outbound business growth in 2025? - Management indicated that the outbound business is expected to continue growing, with a focus on profitability and market expansion [64][65] Question: How will AI transform the business and what investments are planned? - Management highlighted AI's potential to enhance user experience and operational efficiency, with ongoing investments in talent and technology [68][70] Question: What is the strategy for increasing user transaction frequency? - Management emphasized the importance of ARPU improvement and user engagement through personalized services and innovative offerings [75][77]

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 does not explicitly provide an investment rating for the industry Core Insights - The global tourism market is experiencing a robust revival, marking a return to normalcy and a new interpretation of a beautiful life, with Chinese high-spending travelers seeking exquisite experiences beyond mere sightseeing [3][6] - The research highlights a significant increase in outbound travel intentions among Chinese consumers, particularly among the younger generation and those from second-tier cities [50][55] - The report emphasizes the importance of personalized luxury services and deep cultural experiences to meet the evolving preferences of high-spending travelers [70][72] Summary by Sections Background and Research Methodology - The research is based on a survey conducted among 810 platinum members of the Tongcheng travel platform, reflecting the preferences and behaviors of high-spending Chinese travelers [6][7] - The survey was conducted over 11 days, from November 11 to 21, 2024, and aimed to capture the evolving consumption preferences of this demographic [6][7] Demographic Characteristics - The majority of respondents are aged between 35-54 years, with 62% being male, indicating a strong spending potential [39][40] - 76.2% of respondents hold a bachelor's degree or higher, showcasing a well-educated demographic with significant disposable income [44] - 38% of respondents are from second-tier cities, highlighting the growing influence of these markets [39][46] Outbound Travel Preferences - Over 70% of respondents plan to travel abroad within the next year, with a strong inclination towards multiple trips [50][55] - The report indicates that safety concerns are the primary factor affecting travel intentions, followed by time constraints and visa application difficulties [61][63] - The preferred travel types include independent travel (47%), destination group tours (22%), and self-driving tours (9%) [80][81] Insights and Recommendations - Digital platforms like Douyin, Xiaohongshu, and WeChat are crucial touchpoints throughout the travel journey, necessitating an integrated online and offline marketing strategy [126] - Tailored communication strategies are essential to effectively reach different demographic groups, particularly tech-savvy younger travelers and quality-seeking individuals from second-tier cities [127] - Emphasizing craftsmanship, uniqueness, and traditional heritage can attract high-value travelers who prioritize quality and sustainability in their choices [129]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The global tourism market is experiencing a robust revival, marking a return to normalcy and a new interpretation of a beautiful life, with a focus on luxury experiences and cultural depth [3] - Chinese high-spending travelers are increasingly seeking unique, memorable experiences that resonate with their tastes and preferences, indicating a shift towards personalized luxury travel [3][6] - The report highlights a significant increase in outbound travel intentions among Chinese consumers, particularly among the younger generations, with over 70% planning to travel abroad in the next year [50][55] Summary by Sections Background and Research Methodology - The research is based on a survey conducted among 810 Platinum Members of the Tongcheng Travel platform, reflecting the preferences and behaviors of high-end Chinese travelers [6][7] Demographic Characteristics - The majority of respondents are aged between 35-54 years, with 62% being male, indicating a strong consumer potential in this demographic [39][40] - 76.2% of respondents hold a bachelor's degree or higher, showcasing a well-educated consumer base with a strong inclination towards luxury travel experiences [39][44] Outbound Travel Preferences - The outbound travel market is witnessing a strong recovery, with a 70.9% year-on-year increase in outbound travel in the first half of 2024 [26] - The report predicts that Thailand, Japan, and Hong Kong will be the top destinations for Chinese travelers in the coming years, with millions expected to visit these locations [30][72] Insights and Recommendations - Digital platforms like Douyin, Xiaohongshu, and WeChat are crucial touchpoints for engaging travelers throughout their journey, emphasizing the need for attractive content and influencer partnerships [126] - A segmented communication strategy is essential to tailor messages for different demographics, particularly tech-savvy younger travelers and quality-seeking consumers from second-tier cities [127] - Sustainability and authenticity are becoming increasingly important for high-value travelers, who are looking for unique cultural experiences and environmentally friendly options [129]

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].