Investment Rating - The investment rating for the company is "Outperform the Market" (maintained) [2][5][47] Core Views - The company has accumulated over 200 million paying users through its WeChat mini-program, with a significant focus on improving ARPU (Average Revenue Per User) in 2024, showing a 50% increase compared to 2019 [3][7] - The company is expected to benefit from the ongoing recovery in tourism, with domestic travel volume projected to increase by 6.3% during the Qingming holiday and a continued positive trend for the May Day holiday [4][12] - The company's domestic platform booking growth is anticipated to outperform the industry, with outbound travel expected to create a new growth curve [4][25] - The OTA (Online Travel Agency) business profit margin is entering an upward cycle, with a projected profit margin of 26.9% in 2024, indicating room for improvement compared to industry leaders [4][39] Summary by Sections Business Review - The company was formed by the merger of Tongcheng and Elong in March 2018, focusing on differentiated positioning in the market. The strategic shift from user acquisition to ARPU enhancement began in 2023, resulting in a doubling of paying users [3][6] - The company achieved a revenue of 1.734 billion yuan in 2024, with a CAGR of 22% from 2018 to 2024, and an adjusted net profit of 2.785 billion yuan, with a CAGR of 20.4% during the same period [7][54] Future Outlook - The tourism sector is expected to continue its recovery, benefiting from policies aimed at boosting service consumption. The domestic travel volume during major holidays is projected to account for 35.8% of the annual total, an increase of 8.7 percentage points compared to 2019 [4][16] - The company is actively expanding its outbound travel business, with a projected growth of 130% in outbound flight bookings and 110% in hotel bookings by the end of 2024 [4][36] - The OTA business is expected to see profit margins improve, with a focus on optimizing marketing ROI and enhancing user engagement through targeted subsidies [4][39] Financial Projections - The company maintains adjusted net profit forecasts of 3.30 billion, 3.89 billion, and 4.53 billion yuan for 2025, 2026, and 2027, respectively, corresponding to dynamic PE ratios of 14, 12, and 10 times [5][47] - The overall profitability is expected to support a CAGR of over 17% in adjusted profits over the next three years, with current valuations still considered attractive [5][47]

Core Insights - The latest report from Tongcheng Travel predicts that the tourism market during the "May Day" holiday in 2025 is expected to reach a new high compared to the same period in 2023, indicating a sustained benefit from the holiday economy [1] Group 1: Market Trends - The primary driver of tourism demand is the user base from non-first-tier cities, highlighting a shift in consumer behavior [1] - There is a significant trend towards quality leisure vacations, as evidenced by the higher booking rates for high-star hotels compared to budget hotels, indicating signs of consumption upgrading [1] Group 2: Travel Patterns - Tourist itineraries are expanding from domestic hotspots like Beijing, Chengdu, and Shanghai to overseas destinations such as Japan, South Korea, and Southeast Asia [1] - The overall market is expected to show a robust supply and demand dynamic, with travel peaks concentrated in the two days leading up to the holiday [1]

Core Viewpoint - The divergence in stock performance between domestic-focused Tongcheng Travel and internationally-oriented Ctrip highlights the current market sentiment favoring companies with a strong domestic presence amid global economic uncertainties [1][2]. Company Performance - Tongcheng Travel reported a revenue of 17.34 billion yuan in 2024, marking a year-on-year increase of 45.8%, with adjusted EBITDA reaching 4.05 billion yuan, up 29.7% [1]. - Ctrip's international business revenue accounted for approximately 10% of its total revenue in 2024, with a notable increase to 14% in Q4 2024 [1]. Market Trends - The ongoing "tariff war" initiated by the Trump administration has led to a decline in international tourism, particularly affecting travel from Canada to the U.S., with a 23% drop in land border crossings and a 13% decrease in air travel in February 2025 [2]. - Domestic tourism in China remains robust, with 501 million domestic trips taken during the 2025 Spring Festival, a 5.9% increase year-on-year, and total spending reaching 677 billion yuan, up 7.0% [3]. Investment Sentiment - The capital market is increasingly viewing companies like Tongcheng Travel, which focus on the domestic market, as safer investment options amid rising global economic risks [1][3].

目前，大部分OTA平台和航司在机票预订页面会显示"退改签规则"的内容，建议消费者预订前仔细查看。 新京报贝壳财经讯（记者王真真）高先生今年2月份在同程旅行平台花1.5万元购买了日本航空8月北京往返东京的 机票，因情况变化退票时被扣除了高额手续费，后经协调，平台最终退款5221元，近万元的扣费让高先生无法接 受。4月1日，针对这一问题，日本航空相关工作人员向新京报贝壳财经记者表示，每张机票都有每张机票的（退 改）规则，（日本航空）也有不能退改的舱位。平台在售卖相关机票的时候都会显示相关的退改签规则。 另外，上述日本航空工作人员还表示，平台售卖的机票，平台有权对此作出解释。新京报贝壳财经记者联系的同 程旅行相关工作人员表示，高先生的机票退订手续费是按照航司规定收取的。 收取高额退票费的机票预订显示"不得退改" 据报道，2025年2月27日，因孩子在日本留学，山西省运城市夏县的高先生在同程旅行购买了日本航空8月3日-11 日北京往返东京的家庭机票，包括4张成人票、1张儿童票，含税总价15113元。之后因情况变化，准备改签机票， 结果误操作成"退票"，被扣除了14263元的手续费。他随即联系同程旅行希望恢复订单或改签 ...

Core Insights - The demand for flower viewing trips is rapidly increasing, with a 39% year-on-year rise in related search interest, indicating a shift from simple photo opportunities to more curated social media content [1][5][8] Group 1: Popular Flower Viewing Destinations - Luoyang is the top destination for peony viewing, with a 37% month-on-month increase in tourism search interest in March [5] - Other popular peony viewing spots include Caozhou Peony Garden in Heze and Daming Palace Ruins Park in Xi'an [5][6] - For cherry blossoms, the highest search interest is in Wuhan East Lake Cherry Blossom Garden, Wuxi Yuantouzhu, and Gui'an Cherry Blossom Garden, with Wuxi's ticket bookings increasing over threefold in March [8][9] Group 2: Seasonal Trends and User Engagement - The spring season has seen a rise in themed travel activities, such as the "Spring Flower Viewing Festival" organized by Tongcheng Travel, which includes self-driving tours and local culinary experiences [10][12] - The introduction of special effects and filters by Meitu Xiuxiu enhances the photo-taking experience, encouraging users to engage more with the platform [8][9][10] Group 3: Marketing Strategies - Tongcheng Travel and Meitu Xiuxiu are collaborating to provide users with tailored photo-taking tips and themed content, such as "National Style" and "Dreamy Girl" aesthetics [6][9][11] - The launch of promotional activities, including blind boxes and discounts on travel products, aims to attract more users to participate in flower viewing events [23]

Investment Rating - The report maintains an "Accumulate" rating for the company [2][7]. Core Insights - The company's performance exceeded expectations, supported by strong monetization capabilities driving high revenue growth. The focus on refined subsidies and continuous efficiency improvements is enhancing profitability. The international business is expected to contribute as a second growth curve [3][7]. Financial Summary - Revenue for 2024 is projected to reach 17.34 billion RMB, reflecting a year-on-year increase of 49.12%. Adjusted net profit is expected to be 2.79 billion RMB, up 26.66% year-on-year. The adjusted EBITDA is forecasted at 4.05 billion RMB, with an adjusted EBITDA margin of 29.65% [6][7]. - The company achieved revenue of 4.24 billion RMB in Q4 2024, a year-on-year increase of 34.76%. The core OTA segment generated revenue of 3.46 billion RMB, up 20.2% year-on-year. Adjusted net profit for Q4 was 660 million RMB, reflecting a year-on-year increase of 36.82% [7]. Market Performance - The current stock price is 19.12 HKD, with a 52-week price range of 12.70 to 22.30 HKD. The target price is set at 25.97 HKD, based on a 16x PE valuation for 2025, leading to a target market capitalization of 54.3 billion RMB [2][7].

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected relative price increase of over 20% within the next six months [22]. Core Insights - The adjusted net profit for the company exceeded Bloomberg consensus expectations, with a significant improvement in core OTA profitability [2][3]. - The company achieved a revenue of 4.24 billion yuan in Q4 2024, representing a year-on-year growth of 34.8%, and an adjusted net profit of 660 million yuan, up 36.8% year-on-year, with an adjusted net profit margin of 15.6% [3]. - The core OTA business showed a notable increase in operating profit margin, rising by 6.8 percentage points to 28.4% [3][5]. Revenue Breakdown - The transportation business generated 1.72 billion yuan in revenue, growing 17.0% year-on-year, with international ticket market share expanding significantly, showing over 130% growth in annual business volume [5]. - Accommodation revenue reached 1.14 billion yuan, up 28.6% year-on-year, with international hotel business maintaining industry-leading growth, also showing over 110% growth in annual business volume [5]. - Other business segments contributed 600 million yuan in revenue, growing 14.8%, with the Yilong hotel technology platform expanding to nearly 2,300 hotels [5]. - The vacation business generated 780 million yuan, driven by product and service value, supporting over 1,000 travel agency stores [5]. User Metrics - The company achieved a record high average monthly paying user base of 43.1 million, a year-on-year increase of 4.4%, with an annual paying user base of 240 million, up 1.5%, and total service users reaching 1.93 billion, up 9.3% year-on-year [6]. Profit Forecast and Investment Recommendations - The company is positioned as a leading OTA in the lower-tier market, benefiting from Tencent and Ctrip's traffic and inventory resources, with competitive advantages in domestic business and active international market expansion expected to drive long-term revenue and performance growth [7]. - The adjusted net profit forecasts for 2025-2027 are raised to 3.4 billion, 4.0 billion, and 4.7 billion yuan respectively, with corresponding P/E ratios of 13, 11, and 9 times [7].

Investment Rating - The investment rating for the company is "Buy" [7][19]. Core Insights - The adjusted net profit exceeded Bloomberg consensus expectations, with significant improvement in core OTA profitability [2][3]. - In Q4 2024, the company achieved revenue of 4.24 billion yuan, a year-on-year increase of 34.8%, and an adjusted net profit of 660 million yuan, up 36.8% year-on-year, with a net profit margin of 15.6% [3]. - The core OTA business showed a notable improvement in operating profit margin, which increased by 6.8 percentage points to 28.4% year-on-year [3][5]. Revenue Breakdown - The transportation business generated revenue of 1.72 billion yuan, a year-on-year increase of 17.0%, with international ticket market share expanding rapidly, and annual business volume growing over 130% [5]. - Accommodation business revenue reached 1.14 billion yuan, up 28.6% year-on-year, with international hotel business maintaining industry-leading growth, and annual business volume increasing over 110% [5]. - Other business revenue was 600 million yuan, a year-on-year increase of 14.8%, with the Yilong hotel technology platform expanding to nearly 2,300 hotels [5]. - Vacation business revenue was 780 million yuan, driven by product and service value, supporting over 1,000 travel agency stores [5]. User Metrics - The average monthly paying user count reached a historical high of 43.1 million, up 4.4% year-on-year, with an annual paying user count of 240 million, an increase of 1.5% [6]. - The total service user count for the year reached 1.93 billion, a year-on-year increase of 9.3% [6]. Profit Forecast and Investment Suggestion - The company is positioned as a leading OTA in the lower-tier market, benefiting from Tencent and Ctrip's traffic and inventory resources, with competitive advantages in domestic business and active international market expansion [7]. - The adjusted net profit forecast for 2025-2027 is raised to 3.4 billion, 4.0 billion, and 4.7 billion yuan respectively, with corresponding P/E ratios of 13, 11, and 9 times [7].

Investment Rating - The report maintains a "Buy" rating for the company [1][9]. Core Insights - The core online travel agency (OTA) platform shows strong growth momentum, with notable performance in international business. In Q4 2024, the core OTA achieved revenue of 3.46 billion yuan (up 20% year-on-year) and an operating profit margin of 28.4% (up 4.8 percentage points year-on-year) [5]. - The company reported a total revenue of 4.24 billion yuan in Q4 2024, representing a year-on-year increase of 34.8%, and an adjusted net profit of 660 million yuan (up 36.8% year-on-year) [4][5]. - The company is focusing on vertical expansion in the vacation business, which contributed additional revenue, achieving 780 million yuan in Q4 2024 [5]. Financial Performance - For the fiscal year 2024, the company achieved a total transaction volume of 54.7 billion yuan (up 2.2% year-on-year) [4]. - The average monthly paying user count reached 41 million in Q4 2024, a year-on-year increase of 9.3%, with the total annual paying user count reaching 238 million (up 1.5% year-on-year) [5]. - The company’s revenue projections for 2025-2027 are adjusted to 19.5 billion, 22.8 billion, and 25.8 billion yuan respectively, with corresponding net profits of 2.56 billion, 3.08 billion, and 3.61 billion yuan [8]. Market Position - The company is positioned as a leading OTA platform in the lower-tier market, benefiting from the release of domestic travel demand, increased penetration in lower-tier markets, and the recovery of international business [8]. - The company’s market capitalization target for 2025 is set at 49.9 billion yuan, with a target price of 23 HKD per share [8].

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**: HK$25.00, representing a 36% upside from the current price of HK$18.38 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.