Core Viewpoint - Credit Lyonnais forecasts that Tongcheng Travel's core online travel agency (OTA) business revenue will grow by 15% year-on-year to 4.6 billion yuan in Q3, with adjusted net profit reaching 1.03 billion yuan and a profit margin of 19% [1] Group 1: Revenue and Profit Expectations - The expected revenue growth for the accommodation and transportation ticketing segments is 14% and 10% year-on-year, respectively [1] - The fourth quarter's outbound tourism performance is deemed crucial for the group's growth prospects in 2026 [1] Group 2: Acquisition Impact - The recent acquisition of Wanda Hotel Development is expected to have a limited impact on this year's financial performance due to the need for the group to establish a development strategy and the limited time remaining in the year [1] - The acquisition is anticipated to enhance the brand value of the group's existing hotel management business and improve earnings per share [1] Group 3: Target Price Adjustment - The target price for Tongcheng Travel has been raised from 20 HKD to 22 HKD, maintaining a "Buy" rating [1]

Core Viewpoint - CICC maintains the revenue and profit forecasts for Tongcheng Travel (00780) for 2025 and 2026, with an outperform rating and a target price of HKD 28, indicating an upside potential of 28% [1] Group 1: Revenue and Profit Forecasts - For Q3 2025, CICC expects core OTA revenue to grow by 14% year-on-year, with total group revenue increasing by 9% to RMB 5.45 billion, and Non-IFRS net profit projected at RMB 1.02 billion [2] - The hotel segment is expected to see a 10-15% increase in room nights, with a stable share of three-star hotels, leading to a 14% growth in accommodation revenue [2] - The transportation segment is projected to grow by 9%, benefiting from a 3% increase in domestic flight passenger volume and a rise in international ticket sales [2] Group 2: Overall Business Performance - The company maintains a 15% growth expectation for core OTA revenue in 2025, driven by steady growth in domestic accommodation and transportation, along with contributions from international business [3] - The hotel management business is expected to continue its high growth trajectory, with the completion of the acquisition of Wanda Hotel Management in Q4 [3] - CICC maintains the forecast for the company's Non-IFRS net profit at RMB 3.3 billion for 2025, supported by efficient cost control and enhanced international business monetization [3]

Core Viewpoint - CICC forecasts Tongcheng Travel's Q3 revenue to increase by 9% year-on-year to 5.45 billion yuan, with core OTA revenue expected to rise by 14% to 4.59 billion yuan, and Non-IFRS net profit projected at 1.02 billion yuan [1] Revenue and Profit Forecast - CICC maintains its full-year 2025 revenue and profit guidance for Tongcheng Travel, expecting core OTA revenue to grow by 15% year-on-year and Non-IFRS net profit to reach 3.3 billion yuan [1] Business Segment Performance - The domestic segments of accommodation and transportation within the core OTA business show steady growth, while the overseas segment contributes additional growth [1] - Other business segments, particularly hotel management, continue to experience high growth, with the completion of the acquisition of Wanda Hotel Management expected in Q4 [1] Rating and Target Price - CICC maintains a "outperform industry" rating for Tongcheng Travel, setting a target price of 28 HKD [1]

Core Viewpoint - CICC maintains the revenue and profit forecasts for Tongcheng Travel (00780) for 2025 and 2026, with an "outperform" rating and a target price of HKD 28, indicating an upside potential of 28% [1] Group 1: Revenue Forecasts - For Q3 2025, the group expects a 9% year-on-year increase in total revenue to CNY 5.45 billion, with core OTA revenue projected to grow by 14% to CNY 4.59 billion [2] - The hotel segment is anticipated to see a 10-15% increase in room nights, with a steady rise in the share of three-star hotels, leading to a 14% growth in accommodation revenue [2] - The transportation segment is expected to grow by 9%, benefiting from a 3% increase in domestic flight passenger volume and a rapid growth in international ticket sales [2] - Other revenues are projected to increase by 34%, driven by growth in hotel management and PMS revenues [2] Group 2: Annual Guidance - The company maintains its 2025 core OTA revenue growth forecast at 15%, supported by steady growth in domestic accommodation and transportation, along with contributions from international business [3] - The company is expected to achieve a Non-IFRS net profit of CNY 3.3 billion for 2025, aided by efficient cost control and enhanced monetization of international business [3]

Core Viewpoint - UBS forecasts that Tongcheng Travel (00780) will experience stable growth in core OTA revenue for Q3, with an expected year-on-year increase of 14%, approaching the previous guidance range of 10-15% [1] Revenue Projections - The travel demand during the National Day holiday has become normalized, and UBS believes that Tongcheng's hotel revenue will remain resilient [1] - The company’s accommodation revenue is projected to grow at a mid-teens level [1] - In the transportation segment, UBS predicts a high single-digit year-on-year revenue growth for Tongcheng in Q3 [1] Target Price Adjustment - UBS has raised the target price for Tongcheng from HKD 25.5 to HKD 26.5 while maintaining a "Buy" rating [1]

Core Viewpoint - UBS forecasts Tongcheng Travel (00780) to experience stable growth in core OTA revenue for Q3, with an expected year-on-year increase of 14%, approaching the previous guidance range of 10-15% [1] Revenue Projections - The travel demand during the National Day holiday has become normalized, but UBS believes that Tongcheng's hotel revenue will remain resilient [1] - The company’s accommodation revenue growth is projected to be in the mid-teens percentage range [1] Target Price and Rating - UBS has raised the target price for Tongcheng from HKD 25.5 to HKD 26.5, maintaining a "Buy" rating [1] Transportation Business - In terms of transportation services, UBS predicts a high single-digit year-on-year revenue growth for Tongcheng in Q3 [1]

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].