Summary of Conference Call Records Industry Overview - The service consumption in China is significantly lower than in developed countries, currently at approximately 30% compared to 70% in the US, indicating substantial growth potential [1][2] - The new policies aim to enhance service consumption, particularly in the cultural and tourism sectors, with local governments actively improving service quality [1][2] Key Policy Insights - Five major increments in the new policy include: 1. Optimizing student holiday arrangements to explore spring and autumn breaks, benefiting tourism [1][4] 2. Encouraging IP collaborations to promote cross-industry partnerships [1][4] 3. Linking sports events with cultural tourism to boost consumer engagement [1][4] 4. Promoting AI applications in various sectors such as e-commerce and education [1][4] 5. Regulating non-academic training institutions to encourage market-oriented vocational training [1][4] Impact on Specific Sectors - **Tourism and Hospitality**: - The expansion of the visa-free entry policy is expected to significantly boost inbound tourism, particularly benefiting major cities like Beijing and Shanghai, as well as OTA platforms and hotels [3][9][12] - **Cultural and Sports Events**: - The policy encourages the introduction of international sports events and supports local sports activities, which will benefit event organizers and related industries, enhancing investor expectations [1][6] - **Education and Training**: - The new regulations for non-academic training institutions will favor companies like New Oriental and others in the vocational training sector [7][8] Financial and Economic Support - The government plans to utilize central budget investments and local special bonds to support cultural tourism and elderly care facilities, which will attract social capital investment [13] - Financial tools will be employed to increase credit availability, directly benefiting companies involved in consumer lending, such as Chongqing Department Store [13] Additional Considerations - The adjustment of student holiday schedules is anticipated to increase tourism frequency while alleviating congestion during peak seasons [11][12] - The integration of AI in service sectors is expected to enhance operational efficiency and reduce costs, indicating a significant trend in future consumption development [10]

Investment Rating - The report maintains a positive outlook on the travel industry, particularly on Ctrip, with a target price of $82 based on a 20x PE for 2026 N-GAAP OP of 20.851 billion RMB [4]. Core Insights - The global travel market has recovered to pre-pandemic levels, with a significant increase in inbound tourism driven by visa-free policies, showing a 15.8% year-on-year growth in inbound visitors in the first half of 2025 [3][7]. - The hotel industry is facing an oversupply, with a supply growth rate of 11.8% in the first half of 2025, leading to a potential 2-3 year period for inventory digestion [3][11]. - Ctrip is focusing on enhancing hotel efficiency and creating new demand scenarios, such as inbound tourism and performance markets [3][4]. - The importance of membership ecosystems is emphasized, as loyalty programs significantly influence the travel behavior of the new generation of travelers [3][7]. - AI applications in the travel industry are on the rise, with over 64% of consumers having used AI for travel planning, although concerns about data security and decision transparency remain barriers [3][15]. Summary by Sections Global Travel Market - The global travel market has returned to pre-pandemic levels, with online penetration rates continuing to rise. Inbound tourism saw a 15.8% increase in visitor numbers in the first half of 2025, with visa-free visitors growing by 53.9% [3][7]. - The demand for outbound travel is also recovering, with short-haul outbound travel increasing by 38.1% and long-haul by 22.3% [3][7]. Hotel Industry - The hotel industry is experiencing oversupply, with a 11.8% growth in hotel supply in the first half of 2025. Ctrip's CEO suggests that it may take 2-3 years to digest this inventory [3][11]. - Major hotel groups like Huazhu, Jinjiang, and Shoulv are focusing on deepening domestic market operations, with Huazhu making progress in Southeast Asia [3][11]. Ctrip - Ctrip is implementing strategies to help hotels improve efficiency and create new demand scenarios, such as inbound tourism and performance markets [3][4]. - The company is also enhancing its marketing efforts in overseas markets to capture the spending mindset of inbound foreign tourists [4]. Membership Ecosystem - The loyalty programs are increasingly influential among younger travelers, with 15-20% of the younger generation willing to spend more for membership upgrades [7]. AI Applications - AI is being increasingly utilized in the travel industry, with 64% of consumers having used AI for travel planning. However, issues like data security and decision transparency are still significant concerns [15].

Core Viewpoint - Tongcheng Travel (00780) has seen a significant increase in stock price, reaching a new high of 24.04 HKD, driven by favorable government policies aimed at boosting service consumption and tourism [1] Group 1: Company Performance - Tongcheng Travel's stock rose over 4%, currently trading at 23.94 HKD with a transaction volume of 240 million HKD [1] Group 2: Industry Insights - The Ministry of Commerce and nine other departments issued a notice on September 16, outlining measures to expand service consumption, including attracting more foreign visitors and optimizing student holiday arrangements [1] - The notice suggests exploring the establishment of spring and autumn breaks for primary and secondary schools, which would shorten winter and summer vacations, thereby increasing opportunities for travel and service consumption [1] - Citigroup anticipates that if these policies are implemented, there will be a significant increase in long-term family travel [1] - The upcoming Golden Week holiday will last for 8 days, one day longer than last year, leading Citigroup to predict strong tourism demand, particularly for long-distance and outbound travel [1]

同程旅行(00780)涨超4%，高见24.04港元创上市新高。截至发稿，涨4.18%，报23.94港元，成交额2.4亿 港元。 消息面上，商务部等9部门9月16日印发《关于扩大服务消费的若干政策措施》的通知。其中提到，吸引 更多境外人员入境消费，及优化学生假期安排，完善配套政策。探索设置中小学春秋假，相应缩短寒暑 假时间，增加旅游出行等服务消费时间。对此，花旗认为，若政策落地实施，可显著增加长线家庭旅 游。花旗还指出，今年黄金周假期共有8日，较去年多1日，该行预计期间旅游需求将强劲，长线游及出 境游可更受惠。 ...

Group 1 - The report from Citigroup highlights new policies from the Ministry of Commerce aimed at attracting more inbound tourists and optimizing student holiday arrangements, which may significantly boost long-term family travel [1] - The upcoming National Day holiday will last for 8 days, one day longer than last year, leading to strong travel demand, particularly for long-distance and outbound travel [1] - The China Railway Group predicts that during the 12-day railway transport period, passenger volume will reach 219 million, averaging 18.25 million passengers per day, compared to 177 million passengers during the 10-day period last year, averaging 17.7 million per day [1] Group 2 - Citigroup maintains a "Buy" rating for Trip.com and Tongcheng, with target prices set at $85 and HKD 28 respectively [1]

Market Overview - The Hong Kong stock market showed cautious behavior, closing down 0.03% amid ongoing negotiations between the US and China regarding TikTok ownership [1] - The US Treasury Secretary indicated a potential 90-day extension for the TikTok deal, while both sides reached a basic framework consensus to reduce investment barriers and promote economic cooperation [1] Interest Rate Expectations - The market remains stable, anticipating a 25 basis point interest rate cut, supported by dovish comments [2] - CXO companies like Kanglong Chemical saw significant gains, with Kanglong's stock rising over 9% after passing FDA inspections [2] Stock Performance - Newly included stocks in the Hong Kong Stock Connect experienced volatility, with notable fluctuations in prices, such as a 63% rise followed by a 53% drop for YJ Health [2] - Other stocks like MIRXES-B and HuShang Aunt also showed significant price movements, indicating a potential end to the recent speculative trading frenzy [2] Tesla Developments - Elon Musk purchased 2.57 million shares of Tesla at prices between $371.9 and $396.359, reflecting a strong upward trend in Tesla's stock [3] - Tesla aims to deliver 1 million humanoid robots within ten years, with production expectations likely to exceed forecasts based on industry feedback [3] Robotics Supply Chain - Sanhua Intelligent Controls, a key supplier for Tesla's humanoid robots, saw its stock rise nearly 13% due to its strong ties with Tesla [4] - Other companies in the robotics sector, such as Dechang Electric and Yujian Technology, also reported significant stock increases following positive developments in their respective projects [4] Energy Storage Contracts - Jiangsu Longpan Technology signed a major contract with CATL to supply 157,500 tons of lithium iron phosphate materials, valued at approximately 6 billion [5] - The photovoltaic glass market showed positive trends, with leading companies like Fuyao Glass and Xinyi Glass experiencing stock increases of around 5% [5] Expansion of Delivery Services - Meituan's international delivery brand Keeta launched operations in Kuwait, marking its third entry into the Middle East, with stock rising over 3% [6] - Geely Auto announced plans to privatize Zeekr, with stock also increasing by over 3% [6] Aviation Industry Insights - The domestic airline ticket prices showed a year-on-year increase of 4%, indicating a recovery in business travel demand [7] - The low oil prices are beneficial for airlines, with potential cost reductions of 4-5 billion for every 1% drop in oil prices [7] Travel Industry Performance - Tongcheng Travel reported a revenue of 9.05 billion, a year-on-year increase of 11.5%, with adjusted EBITDA growing by 35.2% [8] - The company’s user base continues to expand, particularly in non-first-tier cities, indicating a strong market presence [8] Hotel Industry Outlook - The average room rates in the hotel industry are expected to improve in the third quarter, with growth anticipated in hotel business and accommodation nights [9]

Core Insights - The report by Tongcheng Travel predicts that the upcoming Mid-Autumn and National Day holidays will see a rise in domestic tourism driven by elements like "red tourism, autumn scenery, and moon viewing" [1] - The outbound travel market is supported by continuously optimized visa-free policies, with long-haul destinations seeing a significant increase in visa issuance compared to short-haul destinations since August 2025 [1] Domestic Travel Trends - Domestic flight search volume has increased by over 30% year-on-year as of September 11, indicating a strong demand for travel during the holidays [3] - The average price of domestic flights remains stable compared to last year, with higher prices at the beginning and end of the holiday period, while mid-holiday prices are lower [3] - Popular domestic travel destinations include major cities like Beijing, Chengdu, and Shanghai, which are known for their rich cultural and natural resources [3] - Lesser-known destinations have also gained popularity, with cities like Yining and Luzhou seeing over 60% year-on-year growth in flight search volume [3] Hotel Booking Trends - High-quality hotel bookings have seen a year-on-year increase of over 20%, with "viewing" and "moon appreciation" keywords experiencing a 117% increase in search volume [5] - Certain vacation hotels have sold out their scenic room types 30 days in advance, indicating strong demand [5] - Popular autumn viewing destinations for hotel bookings include regions like Sichuan and Inner Mongolia, with over 30% growth in booking heat [5] Travel Package Preferences - High-quality hotel packages that combine accommodation, dining, and leisure activities are increasingly popular, particularly in provinces like Guangdong and Zhejiang [6] Group Travel Insights - There is a significant increase in demand for domestic group tours, with spending on long-haul group travel rising by over 20% year-on-year [8] - Popular group travel destinations include Sichuan, Xinjiang, and Qinghai, with a focus on autumn appreciation [8] International Travel Trends - International flight search volume has increased by over 60% year-on-year, with destinations in East Asia and Southeast Asia being the most sought after [10] - The introduction of visa-free policies for group tourists to South Korea has notably boosted interest in flights to Seoul and Jeju Island, with search volume doubling [10] - Outbound cruise and group travel products have also seen significant growth, with bookings for cruise products increasing by over 15% [10] Extended Holiday Opportunities - Users are expected to create extended holidays of 12 to 16 days through various leave combinations, enhancing the appeal of travel during this period [11] - Tongcheng Travel has launched promotional activities to improve the cost-effectiveness of travel during the holidays, offering a travel fund valued at 2,888 yuan [11]

Corporate Information [The Board of Directors](index=3&type=section&id=THE%20BOARD%20OF%20DIRECTORS) The board comprises executive, non-executive, and independent non-executive directors, along with members of key committees - The Board of Directors includes executive directors **Wu Zhixiang** (Co-Chairman) and **Ma Heping** (CEO), non-executive directors **Liang Jianzhang** (Co-Chairman), **Jiang Hao**, **Xie Qinghua**, **Brent Richard Irvin**, and independent non-executive directors **Yang Jiahong**, **Dai Xiaojing**, and **Han Yuling**[5](index=5&type=chunk)[6](index=6&type=chunk) - The Audit Committee is chaired by **Yang Jiahong**, the Remuneration Committee by **Han Yuling**, the Nomination Committee by **Wu Zhixiang**, and the Environmental, Social and Governance Committee by **Yang Jiahong**[5](index=5&type=chunk)[6](index=6&type=chunk) [Company Secretary and Authorized Representatives](index=4&type=section&id=COMPANY%20SECRETARY%20AND%20AUTHORIZED%20REPRESENTATIVES) This section provides the company secretary and authorized representatives' names, and addresses for the registered office, headquarters, and principal place of business in Hong Kong - The Company Secretary and Authorized Representative is **Ms. Ma Li**, and **Mr. Ma Heping** is also an Authorized Representative[8](index=8&type=chunk)[9](index=9&type=chunk) - The company's headquarters is located at Tongcheng Travel Building, 66 Yunhui Road, Suzhou Industrial Park, Jiangsu Province, China[8](index=8&type=chunk)[9](index=9&type=chunk) [Legal Advisers and Auditor](index=5&type=section&id=LEGAL%20ADVISERS%20AND%20AUDITOR) This section lists the company's legal advisors in Hong Kong, US, China, and Cayman Islands, along with its auditor and principal bankers - Legal advisers include **Davis Polk & Wardwell** (Hong Kong and US law), **Zhong Lun Law Firm** (Chinese law), and **Conyers Dill & Pearman** (Cayman Islands law)[10](index=10&type=chunk)[11](index=11&type=chunk) - The company's auditor is **PricewaterhouseCoopers**[12](index=12&type=chunk)[13](index=13&type=chunk) - Principal bankers include **China Merchants Bank Beijing East Third Ring Branch** and **Bank of China Suzhou Industrial Park Branch**[12](index=12&type=chunk)[13](index=13&type=chunk) Key Highlights [1. Key Financial Metrics for the Three Months Ended June 30, 2025](index=7&type=section&id=1.%20KEY%20FINANCIAL%20METRICS%20FOR%20THE%20THREE%20MONTHS%20ENDED%20JUNE%2030,%202025) The company achieved significant financial growth in Q2 2025, with total revenue up 10.0%, adjusted EBITDA up 29.7%, and adjusted net profit up 18.0% Q2 2025 Key Financial Metrics | Indicator | Q2 2025 (RMB thousands) | Q2 2024 (RMB thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 4,669,431 | 4,245,357 | 10.0% | | Profit before income tax | 785,745 | 539,128 | 45.7% | | Profit for the period | 642,105 | 429,330 | 49.6% | | Adjusted EBITDA for the period | 1,185,177 | 913,465 | 29.7% | | Adjusted net profit for the period | 775,103 | 656,690 | 18.0% | | Adjusted EBITDA margin | 25.4% | 21.5% | 3.9 percentage points | | Adjusted net profit margin | 16.6% | 15.5% | 1.1 percentage points | [2. Financial Information by Segment (Three months ended June 30, 2025)](index=9&type=section&id=2.%20FINANCIAL%20INFORMATION%20BY%20SEGMENT%20(Three%20months%20ended%20June%2030,%202025)) Core online travel platform revenue grew 13.7% in Q2 2025, driven by accommodation and transportation, while resort revenue declined 8.0% due to Southeast Asia safety concerns Q2 2025 Segment Revenue and Operating Profit | Segment | Q2 2025 Revenue (RMB thousands) | Q2 2024 Revenue (RMB thousands) | YoY Change | Q2 2025 Operating Profit (RMB thousands) | Q2 2024 Operating Profit (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Accommodation booking | 1,371,367 | 1,190,879 | 15.2% | - | - | | Transportation ticketing | 1,881,010 | 1,742,736 | 7.9% | - | - | | Other | 1,417,054 | 1,311,742 | 8.0% | - | - | | **Total Core Online Travel Platform Revenue** | **4,007,775** | **3,525,959** | **13.7%** | **1,070,334** | **858,389** | | **Total Resort Revenue** | **661,656** | **719,398** | **(8.0)%** | **4,427** | **673** | | **Total** | **4,669,431** | **4,245,357** | **10.0%** | **809,316** | **517,025** | - Unallocated items primarily include share-based compensation expenses, depreciation and amortization from acquisitions, fair value changes of financial investments, net other income/gains/losses, and certain corporate administrative expenses[21](index=21&type=chunk)[22](index=22&type=chunk) [3. Operating Metrics for the Three Months Ended June 30, 2025](index=10&type=section&id=3.%20OPERATING%20METRICS%20FOR%20THE%20THREE%20MONTHS%20ENDED%20JUNE%2030,%202025) Average monthly paying users (MPUs) grew 9.2% to 46.4 million in Q2 2025, indicating a continuously expanding user base Q2 2025 Operating Metrics | Indicator | Q2 2025 (million people) | Q2 2024 (million people) | YoY Change | | :--- | :--- | :--- | :--- | | Average Monthly Paying Users | 46.4 | 42.5 | 9.2% | [4. Key Financial Metrics for the Six Months Ended June 30, 2025](index=10&type=section&id=4.%20KEY%20FINANCIAL%20METRICS%20FOR%20THE%20SIX%20MONTHS%20ENDED%20JUNE%2030,%202025) For the six months ended June 30, 2025, the company showed strong financial performance, with total revenue up 11.5%, adjusted EBITDA up 35.2%, and adjusted net profit up 28.6% Key Financial Metrics for the Six Months Ended June 30, 2025 | Indicator | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 9,046,863 | 8,111,635 | 11.5% | | Profit before income tax | 1,590,807 | 991,458 | 60.5% | | Profit for the period | 1,320,606 | 829,586 | 59.2% | | Adjusted EBITDA for the period | 2,344,561 | 1,733,693 | 35.2% | | Adjusted net profit for the period | 1,563,271 | 1,215,178 | 28.6% | | Adjusted EBITDA margin | 25.9% | 21.4% | 4.5 percentage points | | Adjusted net profit margin | 17.3% | 15.0% | 2.3 percentage points | [5. Financial Information by Segment (Six months ended June 30, 2025)](index=12&type=section&id=5.%20FINANCIAL%20INFORMATION%20BY%20SEGMENT%20(Six%20months%20ended%20June%2030,%202025)) For the six months ended June 30, 2025, core online travel platform revenue grew 15.9%, driven by accommodation and transportation, while resort revenue declined 9.8% Six Months Ended June 30, 2025 Segment Revenue and Operating Profit | Segment | H1 2025 Revenue (RMB thousands) | H1 2024 Revenue (RMB thousands) | YoY Change | H1 2025 Operating Profit (RMB thousands) | H1 2024 Operating Profit (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Accommodation booking | 2,561,009 | 2,155,562 | 18.8% | - | - | | Transportation ticketing | 3,881,221 | 3,479,240 | 11.5% | - | - | | Other | 2,604,633 | 2,476,833 | 5.1% | - | - | | **Total Core Online Travel Platform Revenue

Group 1 - The "anti-involution bull" is seen as a crucial opportunity for the market to switch between the two halves of the bull market, with the first half driven by financial re-inflation and the second half by real asset re-inflation, leading to a return of blue-chip stocks driven by both valuation and performance [2][11][12] - The recent policy shift from the central government marks a significant turning point for "anti-involution," which is expected to drive inflation recovery and facilitate the transition between the two halves of the bull market [2][11][14] - The improvement in local government finances has provided the central government with the confidence to implement policies effectively, as evidenced by the recovery in land auction activities and the narrowing decline in land transfer revenues [2][11][14] Group 2 - The recent two months have seen a strengthening of policy determination from the top down, alongside an increase in corporate willingness to cooperate from the bottom up, alleviating previous market concerns regarding the execution of "anti-involution" policies [3][28][29] - The central government's intervention has shifted from industry association-led self-regulation to more direct involvement, with significant policy announcements aimed at curbing irrational competition in key sectors such as photovoltaics and new energy vehicles [3][29][32] - Corporations, particularly in the photovoltaic sector, have begun to respond positively to "anti-involution" initiatives, with major companies committing to production cuts and inventory control to align with industry-wide efforts [3][33][34] Group 3 - Industries that are expected to benefit from "anti-involution" include glass fiber, coal, energy metals, cement, commercial vehicles, and wind power equipment, identified through various criteria such as state-owned enterprise ratios and industry concentration [3][38] - The report emphasizes the importance of monitoring price elasticity and tax implications in identifying potential beneficiaries of the "anti-involution" strategy, with a focus on cyclical resource products [3][38]

Group 1 - The upcoming "Golden Week" during the National Day and Mid-Autumn Festival will last for 8 days, leading to a surge in travel bookings, with some popular routes already sold out [1] - Consumers are planning their trips earlier than in previous years, with a preference for domestic long-distance travel products, and a diverse range of travel experiences such as deep experience tours and cultural exploration tours are emerging to meet varied consumer demands [1] - The United Nations World Tourism Organization forecasts a 5% year-on-year increase in global international tourist arrivals in the first half of 2025, with approximately 690 million outbound trips recorded in the first half of this year, an increase of about 33 million compared to the same period last year [1] Group 2 - Morgan Stanley projects that China's inbound tourism retail market will grow over threefold in the next decade, from $14 billion in 2024 to $60 billion by 2034, increasing its share of the overall tourism retail market from 10% to 25% [2] - The rise of globally recognized brands and improved shopping experiences are key drivers for this growth, with Chinese consumer electronics and brands like Pop Mart attracting tourists and stimulating shopping demand [2] - Policy support is expected to enhance duty-free and tax refund shopping, benefiting domestic retailers, shopping centers, and duty-free operators [2] Group 3 - Relevant Hong Kong-listed travel-related stocks include online travel agencies like Trip.com Group and Tongcheng Travel, as well as companies in the tourism supply chain such as Macau sector stocks, China Travel International Investment Hong Kong, and China Duty Free Group [3]