Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 18, representing a potential upside of 37% from the current price of HKD 13.12 [2][4]. Core Insights - The company's 2Q24 revenue reached RMB 4.25 billion, a year-on-year increase of 48%, aligning with expectations. Adjusted net profit was RMB 660 million, exceeding market expectations by 4%, with an adjusted net profit margin of 15.5%, down 5.2 percentage points year-on-year, primarily due to the consolidation of vacation business [2]. - The core OTA segment showed steady growth, with a transaction volume of RMB 62.3 billion, up 4.4% year-on-year, driven by an increase in ARPPU. The average monthly paying users slightly increased by 0.7% to 42.5 million. Core OTA revenue was RMB 3.53 billion, a 23% year-on-year increase, with an operating profit margin of 24.3% [2]. - International business remains a strong growth driver, with international hotel night volume increasing by 140% and international ticket volume by 160% year-on-year in 2Q24. The company expects continued strong growth in international business, which currently accounts for less than 5% of total revenue [2]. Financial Summary - The company’s revenue forecast for FY24E is adjusted to RMB 17.3 billion, with FY25E projected at RMB 20.1 billion. The adjusted net profit for FY24E is estimated at RMB 2.56 billion, increasing to RMB 3.02 billion in FY25E [3][6]. - The financial model indicates a gradual improvement in profit margins, with the adjusted net profit margin expected to rise from 14.8% in FY24E to 16.2% in FY25E [7]. - The company’s total assets are projected to grow from RMB 38.15 billion in FY24E to RMB 47.79 billion in FY25E, reflecting a robust growth trajectory [7].

证券研究报告 | 2024年08月22日 核心观点 公司研究·财报点评 证券分析师：曾光 证券分析师：钟潇 0755-82150809 0755-82132098 zengguang@guosen.com.cn zhongxiao@guosen.com.cn S0980511040003 S0980513100003 证券分析师：张鲁 证券分析师：杨玉莹 010-88005377 zhanglu5@guosen.com.cn yangyuying@guosen.com.cn S0980521120002 S0980524070006 收盘价 13.90 港元 总市值/流通市值 32318/32318 百万港元 52 周最高价/最低价 22.34/12.38 港元 近 3 个月日均成交额 145.84 百万港元 | --- | --- | |----------|----------------| | 基础数据 | | | 投资评级 | 优于大市(维持) | | 合理估值 | | | 市场走势 | | | --- | --- | --- | --- | --- | --- | |---------------- ...

股价表现 2024 年 08 月 21 日 同程旅行（0780.HK） 业绩符合预期；核心 OTA 利润率下半年有望提升 同程旅行 2 季度业绩符合预期，收入增速快于 GMV 增速，整体变现率提升明 显。核心 OTA 收入同比增 23%，经营利润率 24.3%；度假业务贡献 8.6 亿收入增 量。展望下半年，我们预计核心 OTA 业务收入稳健增长，经营利润率或随营销 效率优化而提升，故维持全年净利润预测。考虑市场环境变化，下调估值倍数， 目标价调整至 18.8 港元，维持买入评级。 报告摘要 2 季度业绩符合预期：总收入 42.5 亿元，同比/环比增 48%/10%，符合我们及市 场预期，核心 OTA 业务收入同比增 23%（其中交通票务/住宿预订服务同比增 17%/13%），度假业务贡献收入增量 8.6 亿元，环比增 9%，收入占比环比持平在 17%。整体收入增速快于 GMV 增速（+4%），整体变现率提升至 6.8%，对比 2Q23/1Q24 为 4.8%/5.9%。营销/研发/行政费用占收入比同比降 3.3%/3.3%/ 0.8%， 受益于 ROI 导向营销策略及运营效率优化，带动经调整净利润同比增 1 ...

海 外 公 司 （ 中 国 香 港 ） 国泰君安版权所有发送给上海东方财富金融数据服务有限公司.东财接收研报邮箱.ybjieshou@eastmoney.com p1 补贴收紧关注利润，盈利能力有望改善 同程旅行(0780) [Table_Industry] 社会服务业 [Table_Invest] 评级： 增持 股票研究 /[Table_Date] 2024.08.21 同程旅行 2024Q2 业绩点评 | --- | --- | |----------|---------------------| | | 于清泰(分析师) | | | 021-38022689 | | | yuqingtai@gtjas.com | | 登记编号 | S0880519100001 | 本报告导读： 业绩符合预期，收益管理补贴收紧支撑业绩逆势稳定增长，盈利能力有望环比改善。 投资要点： [Table_Summary] 维持"增持"评级。考虑行业景气度，下调公司 24/25/26 年经调整 归母净利润至 26.17/30.93/36.17（-0.98/-1.98/-4.09）亿元人民币（下 同），给予 2025 年行业平均 1 ...

Investment Rating - The report maintains an "Accumulate" rating for the company [1] Core Insights - The company's Q2 2024 performance met expectations, with total revenue reaching 4.245 billion yuan, a year-on-year increase of 48.1%. The net profit attributable to shareholders was 434 million yuan, up 21.9% year-on-year [3] - The core OTA segment showed steady growth, with transportation ticketing and accommodation booking revenues of 1.743 billion yuan and 1.191 billion yuan, respectively, reflecting year-on-year increases of 16.6% and 12.8% [3] - The company signed a three-year strategic cooperation and marketing agreement with Tencent, aiming to enhance user acquisition through various channels, particularly in lower-tier cities [3][4] Financial Performance Summary - For 2024Q2, the adjusted EBITDA was 914 million yuan, a year-on-year increase of 13.4%, while the adjusted net profit was 657 million yuan, up 10.9% year-on-year [3] - The gross margin for Q2 2024 was 64.6%, down 10.8 percentage points year-on-year, attributed to the lower margin from the newly added vacation business segment [3] - The company expects net profits for 2024-2026 to be 1.98 billion yuan, 2.77 billion yuan, and 3.46 billion yuan, respectively, with corresponding P/E ratios of 14, 10, and 8 times [4] Market Data - The closing price of the company's stock is 13.12 HKD, with a market capitalization of approximately 30.5 billion HKD [5] - The company has a price-to-book ratio of 1.65 and a total share capital of approximately 2.325 billion shares [5][6] User Engagement Metrics - As of the end of Q2 2024, the company had 228 million annual paying users and 1.856 billion annual service users, with a year-on-year increase of 4.8% and 29.9%, respectively [3]

[Performance Announcement Summary](index=1&type=section&id=Performance%20Announcement%20Summary) The company achieved strong revenue growth in Q2 and H1 2024, with increased adjusted EBITDA and net profit, though margins declined, alongside steady user expansion [Performance Summary for the Three Months Ended June 30, 2024](index=1&type=section&id=Performance%20Summary%20for%20the%20Three%20Months%20Ended%20June%2030%2C%202024) Tongcheng Travel achieved strong Q2 2024 growth with total revenue up 48.1% to **RMB 4.245 billion**, though adjusted EBITDA and net profit margins declined despite absolute increases Key Financial Indicators for Q2 2024 | Indicator | 2024 Q2 (RMB thousands) | 2023 Q2 (RMB thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 4,245,357 | 2,866,269 | 48.1% | | Adjusted EBITDA | 913,465 | 805,839 | 13.4% | | Adjusted Net Profit | 656,690 | 592,395 | 10.9% | | Adjusted EBITDA Margin | 21.5% | 28.1% | -6.6% | | Adjusted Net Profit Margin | 15.5% | 20.7% | -5.2% | | Average Monthly Paying Users (millions) | 42.5 | 42.2 | 0.7% | | Transaction Volume (RMB billions) | 62.3 | 59.7 | 4.4% | - The company updated its segment reporting structure starting Q1 2024, now divided into "**Core Online Travel Platform**" and "**Resort**" segments to better reflect business strategy and financial performance[7](index=7&type=chunk) Q2 2024 Segment Revenue and Operating Profit | Segment | 2024 Q2 Revenue (RMB thousands) | 2023 Q2 Revenue (RMB thousands) | 2024 Q2 Operating Profit (RMB thousands) | 2023 Q2 Operating Profit (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Core Online Travel Platform | 3,525,959 | 2,866,269 | 858,389 | 761,094 | | Resort | 719,398 | – | 673 | – | | Total | 4,245,357 | 2,866,269 | 517,025 | 417,141 | [Performance Summary for the Six Months Ended June 30, 2024](index=3&type=section&id=Performance%20Summary%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202024) In H1 2024, the company's revenue increased by 48.8% year-on-year to **RMB 8.112 billion**, with growth in adjusted EBITDA and net profit, but a decline in profit margins, alongside significant increases in annual paying users and cumulative serviced passenger trips Key Financial Indicators for H1 2024 | Indicator | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 8,111,635 | 5,452,412 | 48.8% | | Adjusted EBITDA | 1,733,693 | 1,538,044 | 12.7% | | Adjusted Net Profit | 1,215,178 | 1,095,986 | 10.9% | | Adjusted EBITDA Margin | 21.4% | 28.2% | -6.8% | | Adjusted Net Profit Margin | 15.0% | 20.1% | -5.1% | | Transaction Volume (RMB billions) | 128.2 | 116.9 | 9.7% | | Average Monthly Paying Users (millions) | 42.6 | 41.8 | 1.9% | | Annual Paying Users (millions) | 228.3 | 217.9 | 4.8% | | Cumulative Serviced Passenger Trips (millions) | 1,856.4 | 1,429.2 | 29.9% | [Business Review and Outlook](index=5&type=section&id=Business%20Review%20and%20Outlook) The company capitalized on China's tourism market growth in Q2 and H1 2024, achieving significant increases in total transaction volume and revenue, while maintaining robust adjusted net profit [Performance Highlights](index=5&type=section&id=Performance%20Highlights) The company capitalized on China's tourism market growth in Q2 and H1 2024, achieving significant increases in total transaction volume and revenue, while maintaining robust adjusted net profit - China's tourism industry maintained growth momentum in Q2 2024, with strong travel demand driven by the pursuit of diverse and unique travel experiences[15](index=15&type=chunk) Q2 and H1 2024 Core Performance | Indicator | 2024 Q2 | 2024 H1 | | :--- | :--- | :--- | | Total Transaction Volume | RMB 62.3 billion (YoY growth 4.4%) | RMB 128.2 billion (YoY growth 9.7%) | | Total Revenue | RMB 4,245.4 million (YoY growth 48.1%) | RMB 8,111.6 million (YoY growth 48.8%) | | Adjusted Net Profit | RMB 656.7 million | RMB 1,215.2 million | | Adjusted Net Profit Margin | 15.5% | 15.0% | [Business Review](index=5&type=section&id=Business%20Review) The company strengthened its mass market position, particularly in non-first-tier cities, through effective user acquisition and engagement strategies, while expanding online and offline traffic sources, enriching product offerings, and advancing international business and hotel management - For the twelve months ended June 30, 2024, annual paying users increased by **4.8%** year-on-year to **228.3 million**, and cumulative serviced passenger trips grew by **29.9%** to **1.86 billion**, with a significant increase in user purchase frequency[16](index=16&type=chunk) - Over **87%** of registered users reside in non-first-tier cities in China, and approximately **70%** of new paying users on the WeChat platform are from non-first-tier cities, solidifying the company's mass market position[16](index=16&type=chunk) - The company actively expanded scenarios within the WeChat ecosystem, achieved a record high in daily active users for its proprietary applications during the Labor Day holiday, deepened cooperation with mobile phone manufacturers, and advanced offline public transportation projects[17](index=17&type=chunk) - As a one-stop platform, it offers approximately **440,000 air routes**, over **3.1 million hotels** and non-standard accommodations, approximately **170,000 bus routes**, over **800 ferry routes**, and tickets for over **10,000 domestic tourist attractions**[18](index=18&type=chunk) - Revenue from transportation ticketing services increased by **16.6%** year-on-year to **RMB 1.7427 billion**, with international air ticket volume growing by over **160%** year-on-year[19](index=19&type=chunk) - Accommodation business revenue increased by **12.8%** year-on-year to **RMB 1.1909 billion**, with total room nights growing by **10%** year-on-year and international room nights increasing by nearly **140%** year-on-year[20](index=20&type=chunk) - Other revenue from the core online travel platform increased by **87.3%** year-on-year to **RMB 592.3 million**, and the hotel management segment now operates approximately **1,900 hotels**, with over **1,000 more** in preparation[21](index=21&type=chunk) - Strategic partnerships were established with Capital Airports Holding Company and Shandong Province tourism scenic areas, leveraging internet expertise and technology to empower industry digital transformation[22](index=22&type=chunk) - The company was recognized in S&P Global's "Sustainability Yearbook (China Edition)" for two consecutive years, affirming its leadership in ESG practices[22](index=22&type=chunk) [Business Outlook and Strategy](index=7&type=section&id=Business%20Outlook%20and%20Strategy) The company remains optimistic about China's tourism industry, anticipating continued growth in the domestic market and a recovery in outbound travel driven by international flight restoration and favorable visa policies, focusing on enhancing user value, expanding international business, strengthening hotel management and resort operations, and actively seeking investment opportunities - China's domestic tourism market has maintained growth momentum since last year, with significant increases in travel demand during the summer holiday period, indicating vast untapped potential[23](index=23&type=chunk)[25](index=25&type=chunk) - The company remains optimistic about the outbound tourism market, as the recovery of international flights and favorable visa policies reignite Chinese tourists' enthusiasm for overseas travel[25](index=25&type=chunk) - Future strategies include enhancing user value and expanding the user base of the core online travel platform, broadening the international business footprint, strengthening hotel management and resort operations, and actively seeking strategic investment opportunities[25](index=25&type=chunk) [Management Discussion and Analysis](index=9&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a detailed comparison of the financial performance for Q2 2024 versus Q2 2023, covering revenue composition, cost of sales, operating expenses, and other profit and loss items, revealing the specific reasons for changes in various indicators [Comparison of Q2 2024 and Q2 2023](index=9&type=section&id=Comparison%20of%20Q2%202024%20and%20Q2%202023) This section provides a detailed comparison of the financial performance for Q2 2024 versus Q2 2023, covering revenue composition, cost of sales, operating expenses, and other profit and loss items, revealing the specific reasons for changes in various indicators Key Items from Condensed Consolidated Income Statement for Q2 2024 and Q2 2023 | Indicator | 2024 Q2 (RMB thousands) | 2023 Q2 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 4,245,357 | 2,866,269 | | Cost of Sales | (1,501,022) | (703,284) | | Gross Profit | 2,744,335 | 2,162,985 | | Service Development Expenses | (494,281) | (427,826) | | Selling and Marketing Expenses | (1,501,710) | (1,107,860) | | Administrative Expenses | (272,193) | (207,641) | | Operating Profit | 517,025 | 417,141 | | Profit for the Period | 429,330 | 359,981 | | Profit Attributable to Equity Holders of the Company | 433,691 | 355,920 | Q2 2024 Revenue by Service Item and Segment | Service Item/Segment | 2024 Q2 (RMB thousands) | 2023 Q2 (RMB thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Core Online Travel Platform Total Revenue | 3,525,959 | 2,866,269 | 23.0% | | - Accommodation Reservation Services | 1,190,879 | 1,055,396 | 12.8% | | - Transportation Ticketing Services | 1,742,736 | 1,494,582 | 16.6% | | - Others | 592,344 | 316,291 | 87.3% | | Resort Revenue | 719,398 | – | N/A | | Total Revenue | 4,245,357 | 2,866,269 | 48.1% | - Cost of sales increased by **113.4%** year-on-year to **RMB 1.501 billion**, primarily due to increased costs for purchased travel-related products, value-added user services, and employee benefits expenses[33](index=33&type=chunk) - Selling and marketing expenses increased by **35.6%** year-on-year to **RMB 1.5017 billion**, mainly driven by higher advertising and promotion expenses, commission expenses, and sales employee benefits[35](index=35&type=chunk) - Other net losses decreased from **RMB 80.1 million** in Q2 2023 to **RMB 14.6 million** in Q2 2024, primarily due to reduced exchange losses[41](index=41&type=chunk) - Profit attributable to equity holders of the company increased by **21.8%** year-on-year to **RMB 433.7 million**[43](index=43&type=chunk) [Other Financial Information](index=14&type=section&id=Other%20Financial%20Information) This section covers non-IFRS financial measures, liquidity, and financial resources [Non-IFRS Financial Measures](index=14&type=section&id=Non-IFRS%20Financial%20Measures) The company uses adjusted EBITDA and adjusted net profit for the period as non-IFRS measures to provide a more comparable assessment of core business performance, excluding non-cash or non-core business-driven items - Adjusted EBITDA is defined as adjusted operating profit, excluding non-cash or non-core items such as share-based compensation, amortization of intangible assets, depreciation, and net exchange losses[45](index=45&type=chunk) - Adjusted net profit for the period is defined as adjusted profit for the period, excluding items such as net share-based compensation, amortization of intangible assets acquired, and net exchange losses[45](index=45&type=chunk) Reconciliation of Adjusted EBITDA to Operating Profit | Indicator | 2024 Q2 (RMB thousands) | 2023 Q2 (RMB thousands) | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Operating Profit for the Period | 517,025 | 417,141 | 972,050 | 882,562 | | Add: Total Share-based Compensation | 107,910 | 77,954 | 222,124 | 168,613 | | Add: Amortization of Intangible Assets | 170,092 | 168,771 | 346,770 | 336,747 | | Add: Depreciation of Property, Plant and Equipment and Right-of-Use Assets | 84,815 | 52,977 | 166,306 | 104,493 | | Adjusted EBITDA | 913,465 | 805,839 | 1,733,693 | 1,538,044 | Reconciliation of Adjusted Net Profit to Profit for the Period | Indicator | 2024 Q2 (RMB thousands) | 2023 Q2 (RMB thousands) | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Profit for the Period | 429,330 | 359,981 | 829,586 | 738,949 | | Add: Net Share-based Compensation | 124,001 | 79,400 | 211,817 | 184,467 | | Add: Amortization of Intangible Assets Acquired | 64,417 | 63,113 | 134,969 | 125,131 | | Adjusted Net Profit for the Period | 656,690 | 592,395 | 1,215,178 | 1,095,986 | [Liquidity and Financial Resources](index=17&type=section&id=Liquidity%20and%20Financial%20Resources) The company primarily meets its liquidity needs through net cash from operating activities and bank borrowings; in H1 2024, cash and cash equivalents significantly increased, but net cash from operating activities decreased, and cash flows from investing and financing activities shifted - As of June 30, 2024, cash and cash equivalents amounted to **RMB 7.748 billion**, a significant increase from **RMB 5.4047 billion** at the end of 2023[53](index=53&type=chunk) H1 2024 Cash Flows | Cash Flow Type | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | | :--- | :--- | :--- | | Net Cash Flows from Operating Activities | 1,294,712 | 2,271,243 | | Net Cash Flows from/(used in) Investing Activities | 576,752 | (103,243) | | Net Cash Flows from/(used in) Financing Activities | 688,029 | (317,825) | | Net Increase in Cash and Cash Equivalents | 2,559,493 | 1,850,175 | | Cash and Cash Equivalents at End of Period | 7,747,983 | 5,404,726 | - Net cash from operating activities decreased, primarily due to changes in working capital, including increases in trade receivables and prepayments[55](index=55&type=chunk) - Investing activities shifted from a net outflow to a net inflow, mainly due to increased net cash received from wealth management products and time deposits, offsetting expenditures for long-term equity investments and purchases of property, plant and equipment[56](index=56&type=chunk) - Financing activities shifted from a net outflow to a net inflow, primarily due to increased proceeds from bank loans, partially offset by repayment of bank borrowings[57](index=57&type=chunk) - As of June 30, 2024, the capital gearing ratio was approximately **20.3%**[58](index=58&type=chunk) [Capital Expenditures and Investments](index=19&type=section&id=Capital%20Expenditures%20and%20Investments) This section details capital expenditures, long-term and short-term investments, and the absence of significant acquisitions or disposals [Capital Expenditures](index=19&type=section&id=Capital%20Expenditures) In H1 2024, the company's total capital expenditures significantly increased, primarily for the acquisition of property, plant and equipment, and long-term investments Total Capital Expenditures for H1 2024 | Item | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | | :--- | :--- | :--- | | Purchase of Property, Plant and Equipment | 372,679 | 137,765 | | Purchase of Intangible Assets | 6,607 | 806 | | Long-term Investments | 574,201 | 588,022 | | Total Capital Expenditures | 953,487 | 726,593 | [Long-term Investments](index=19&type=section&id=Long-term%20Investments) As of June 30, 2024, total long-term investments increased, primarily due to a rise in investments accounted for using the equity method, reflecting the company's strategic investments in ecological tourism, biotechnology, resort real estate, and hotel management services Composition of Long-term Investments | Item | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Investments Accounted for Using the Equity Method | 1,629,738 | 1,429,800 | | Investments Measured at Fair Value Through Profit or Loss | 930,476 | 1,039,294 | | Investments Measured at Amortized Cost | 1,209,082 | 683,879 | | Total Long-term Investments | 3,769,296 | 3,152,973 | - The increase in investments accounted for using the equity method is mainly due to more investments in private companies with significant influence, primarily engaged in ecological tourism, biotechnology, resort real estate, and hotel management services[63](index=63&type=chunk) - The overall strategy for long-term investments is to invest in or acquire businesses that can foster the company's operations and bring benefits[63](index=63&type=chunk) [Short-term Investments](index=20&type=section&id=Short-term%20Investments) Total short-term investments decreased, with a significant reduction in short-term investments measured at amortized cost and an increase in those measured at fair value through profit or loss, as the company opts for highly liquid, secure, and reasonably yielding financial products Composition of Short-term Investments | Item | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Short-term Investments Measured at Amortized Cost | 236,901 | 2,316,753 | | Short-term Investments Measured at Fair Value Through Profit or Loss | 1,837,676 | 1,631,715 | | Total Short-term Investments | 2,074,577 | 3,948,468 | - Short-term investments measured at amortized cost primarily consist of time deposits within one year, while short-term investments measured at fair value through profit or loss include wealth management products with expected returns ranging from **1.90% to 4.58%**[64](index=64&type=chunk) [Significant Acquisitions and Disposals](index=20&type=section&id=Significant%20Acquisitions%20and%20Disposals) For the six months ended June 30, 2024, the company did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures - For the six months ended June 30, 2024, there were no significant acquisitions or disposals of subsidiaries, associates, or joint ventures[65](index=65&type=chunk) [Foreign Exchange Risk and Employees](index=21&type=section&id=Foreign%20Exchange%20Risk%20and%20Employees) This section addresses the company's foreign exchange risk management and details its employee structure, recruitment, training, and welfare programs [Foreign Exchange Risk](index=21&type=section&id=Foreign%20Exchange%20Risk) The company manages foreign exchange risk by regularly reviewing its net foreign exchange exposure and entering into derivative contracts with financial institutions for economic hedging purposes - Foreign exchange risk arises from commercial transactions or assets and liabilities denominated in non-functional currencies, managed by the company through regular review of its net foreign exchange exposure[66](index=66&type=chunk) - The company enters into derivative contracts with financial institutions for economic hedging purposes, measured at fair value[66](index=66&type=chunk) [Employees](index=21&type=section&id=Employees) As of June 30, 2024, the company had 10,241 full-time employees, primarily located in Suzhou, Beijing, and other regions of China, implementing various recruitment, training, and incentive programs, complying with statutory employee benefits, and maintaining good employee relations - As of June 30, 2024, the company had a total of **10,241 full-time employees**, with approximately **32.4%** in Suzhou, **7.3%** in Beijing, and **60.3%** in other regions of China and overseas[67](index=67&type=chunk) - The company recruits through campus recruitment, recruitment agencies, and online channels, and provides management, technical, and other training[67](index=67&type=chunk) - The company implements various share incentive schemes and share option schemes, and participates in various statutory employee welfare plans[67](index=67&type=chunk) - For the six months ended June 30, 2024, the company did not experience any significant labor disputes or recruitment difficulties[67](index=67&type=chunk) [Condensed Consolidated Financial Statements](index=22&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the interim condensed consolidated income statement, comprehensive income statement, statement of financial position, and cash flow statement [Interim Condensed Consolidated Income Statement](index=22&type=section&id=Interim%20Condensed%20Consolidated%20Income%20Statement) This income statement presents the company's revenue, costs, expenses, and ultimate profit for Q2 and H1 2024, reflecting year-on-year changes in various financial indicators Q2 and H1 2024 Condensed Consolidated Income Statement | Indicator | 2024 Q2 (RMB thousands) | 2023 Q2 (RMB thousands) | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 4,245,357 | 2,866,269 | 8,111,635 | 5,452,412 | | Gross Profit | 2,744,335 | 2,162,985 | 5,259,129 | 4,103,846 | | Operating Profit | 517,025 | 417,141 | 972,050 | 882,562 | | Profit for the Period | 429,330 | 359,981 | 829,586 | 738,949 | | Profit Attributable to Equity Holders of the Company | 433,691 | 355,920 | 830,325 | 733,832 | | Basic Earnings Per Share (RMB) | 0.19 | 0.16 | 0.37 | 0.33 | | Diluted Earnings Per Share (RMB) | 0.19 | 0.16 | 0.36 | 0.32 | [Interim Condensed Consolidated Statement of Comprehensive Income](index=23&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) This comprehensive income statement lists the company's profit for the period and other comprehensive income, including currency translation differences, for Q2 and H1 2024, to present overall financial performance Q2 and H1 2024 Condensed Consolidated Statement of Comprehensive Income | Indicator | 2024 Q2 (RMB thousands) | 2023 Q2 (RMB thousands) | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Profit for the Period | 429,330 | 359,981 | 829,586 | 738,949 | | Other Comprehensive Income for the Period (net of tax) | 1,748 | 51,233 | 1,118 | 37,966 | | Total Comprehensive Income for the Period | 431,078 | 411,214 | 830,704 | 776,915 | | Total Comprehensive Income Attributable to Equity Holders of the Company | 435,439 | 407,153 | 831,443 | 771,798 | [Interim Condensed Consolidated Statement of Financial Position](index=24&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement of financial position presents the company's assets, liabilities, and equity as of June 30, 2024, and December 31, 2023, reflecting changes in asset structure and liability levels Key Items from Condensed Consolidated Statement of Financial Position as of June 30, 2024, and December 31, 2023 | Indicator | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Total Assets | 34,638,271 | 31,716,609 | | Non-current Assets | 17,650,218 | 16,816,963 | | Current Assets | 16,988,053 | 14,899,646 | | Total Equity | 19,547,247 | 18,546,289 | | Total Liabilities | 15,091,024 | 13,170,320 | | Non-current Liabilities | 2,185,590 | 1,283,226 | | Current Liabilities | 12,905,434 | 11,887,094 | [Interim Condensed Consolidated Cash Flow Statement](index=26&type=section&id=Interim%20Condensed%20Consolidated%20Cash%20Flow%20Statement) This cash flow statement presents the company's cash flows from operating, investing, and financing activities, as well as the net increase in cash and cash equivalents, for H1 2024 H1 2024 Condensed Consolidated Cash Flow Statement | Cash Flow Type | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | | :--- | :--- | :--- | | Net Cash Flows from Operating Activities | 1,294,712 | 2,271,243 | | Net Cash Flows from/(used in) Investing Activities | 576,752 | (103,243) | | Net Cash Flows from/(used in) Financing Activities | 688,029 | (317,825) | | Net Increase in Cash and Cash Equivalents | 2,559,493 | 1,850,175 | | Cash and Cash Equivalents at End of Period | 7,747,983 | 5,404,726 | [Notes](index=27&type=section&id=Notes) This section provides general information, segment reporting, expense breakdown, other net losses, income tax, earnings per share, dividends, investments, receivables, payables, and derivative financial instruments [General Information](index=27&type=section&id=General%20Information) This section introduces basic information about Tongcheng Travel Holdings Limited, including its place of incorporation, listing status, principal business activities, and the basis of preparation and accounting policies adopted for these interim financial statements - Tongcheng Travel Holdings Limited was incorporated in the Cayman Islands, and its shares have been listed on the Main Board of the Hong Kong Stock Exchange since November 26, 2018[78](index=78&type=chunk)[79](index=79&type=chunk) - The Group is primarily engaged in providing travel-related services in China, including accommodation reservation, transportation ticketing, online advertising, hotel management (Core Online Travel Platform), and offline travel agency and resort-related services[79](index=79&type=chunk) - The interim condensed consolidated financial information is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and has adopted amendments to International Accounting Standard 1, which did not result in changes to the classification of borrowings[79](index=79&type=chunk)[80](index=80&type=chunk) [Revenue and Segment Information](index=28&type=section&id=Revenue%20and%20Segment%20Information) Effective January 1, 2024, the company adopted a new internal reporting structure, dividing its operations into "Core Online Travel Platform" and "Resort" as two reportable segments, to more accurately assess the performance and resource allocation of each business - Effective January 1, 2024, the company established a new internal reporting structure, dividing its operations into the "**Core Online Travel Platform Segment**" and the "**Resort Segment**"[84](index=84&type=chunk) - The chief operating decision maker assesses the performance of operating segments based on their revenue and operating profit/loss[85](index=85&type=chunk) Q2 and H1 2024 Segment Revenue and Operating Profit | Segment | 2024 Q2 Revenue (RMB thousands) | 2024 Q2 Operating Profit (RMB thousands) | 2024 H1 Revenue (RMB thousands) | 2024 H1 Operating Profit (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Core Online Travel Platform | 3,525,959 | 858,389 | 6,729,303 | 1,582,592 | | Resort | 719,398 | 673 | 1,382,332 | 44,587 | | Total | 4,245,357 | 517,025 | 8,111,635 | 972,050 | [Expenses by Nature](index=30&type=section&id=Expenses%20by%20Nature) This section details the company's expenses by nature for Q2 and H1 2024, including employee benefits, advertising and promotion, and travel product costs Q2 and H1 2024 Expenses by Nature | Expense Item | 2024 Q2 (RMB thousands) | 2023 Q2 (RMB thousands) | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Employee Benefit Expenses | 1,002,817 | 747,303 | 1,955,878 | 1,437,020 | | Advertising and Promotion Expenses | 971,271 | 709,308 | 1,871,552 | 1,324,486 | | Cost of Purchased Travel-related Products | 712,662 | 58,484 | 1,270,586 | 105,554 | | Order Processing Costs | 336,624 | 325,788 | 705,212 | 641,193 | | Depreciation and Amortization Expenses | 254,907 | 221,748 | 513,076 | 441,240 | | Commission Expenses | 143,920 | 157,537 | 252,867 | 282,635 | | Procurement Costs | 142,462 | 90,262 | 269,951 | 169,570 | | Total | 3,769,206 | 2,446,611 | 7,240,971 | 4,661,535 | [Other Net Losses](index=30&type=section&id=Other%20Net%20Losses) This section analyzes the company's other net losses for Q2 and H1 2024, primarily influenced by net exchange losses, investment income, and gains from derivative financial instruments Q2 and H1 2024 Other Net Losses | Item | 2024 Q2 (RMB thousands) | 2023 Q2 (RMB thousands) | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Net Exchange Losses | (29,259) | (131,023) | (46,932) | (98,914) | | Investment Income from Investments Measured at Amortized Cost | 12,498 | 23,271 | 32,526 | 48,291 | | Net Gains from Derivative Financial Instruments | 106 | 28,510 | 1,980 | 34,254 | | Total Other Net Losses | (14,569) | (80,147) | (14,006) | (17,430) | [Income Tax Expense](index=31&type=section&id=Income%20Tax%20Expense) This section explains the composition of the company's income tax expense for Q2 and H1 2024, including current and deferred income tax, and clarifies the applicable corporate income tax rates in China and tax incentives for high-tech enterprises Q2 and H1 2024 Income Tax Expense | Item | 2024 Q2 (RMB thousands) | 2023 Q2 (RMB thousands) | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Current Income Tax | 93,592 | 70,037 | 184,359 | 125,326 | | Deferred Income Tax | 16,206 | (3,465) | (22,487) | 6,375 | | Total Income Tax Expense | 109,798 | 66,572 | 161,872 | 131,701 | - Three directly held subsidiaries incorporated in China are recognized as high-tech enterprises, enjoying a preferential corporate income tax rate of **15%**[93](index=93&type=chunk) - Other Chinese subsidiaries are subject to the general corporate income tax rate of **25%** in China[93](index=93&type=chunk) - As of June 30, 2024, no provision for deferred tax liabilities on withholding tax has been made, as the company has no plans to distribute retained earnings from its Chinese subsidiaries[93](index=93&type=chunk) [Earnings Per Share](index=32&type=section&id=Earnings%20Per%20Share) This section provides the company's basic and diluted earnings per share data for Q2 and H1 2024, explaining the calculation methods and potential dilutive factors Q2 and H1 2024 Earnings Per Share | Indicator | 2024 Q2 (RMB) | 2023 Q2 (RMB) | 2024 H1 (RMB) | 2023 H1 (RMB) | | :--- | :--- | :--- | :--- | :--- | | Basic Earnings Per Share | 0.19 | 0.16 | 0.37 | 0.33 | | Diluted Earnings Per Share | 0.19 | 0.16 | 0.36 | 0.32 | - Basic earnings per share are calculated by dividing the profit attributable to equity holders of the company by the weighted average number of ordinary shares outstanding[94](index=94&type=chunk) - Diluted earnings per share are calculated by adjusting the weighted average number of ordinary shares outstanding, assuming the conversion of all potential dilutive ordinary shares, such as share options and restricted share units[96](index=96&type=chunk) [Dividends](index=32&type=section&id=Dividends) This section outlines the company's dividend distribution for H1 2024, including final dividends declared and paid - On March 19, 2024, the company declared a final dividend of **HK$0.15 per share** for the year ended December 31, 2023, which was paid on July 19, 2024[98](index=98&type=chunk) - For the six months ended June 30, 2024, the company did not pay or declare any dividends[98](index=98&type=chunk) [Investments](index=33&type=section&id=Investments) This section details the composition and accounting treatment of the company's short-term and long-term investments, including types measured at amortized cost and at fair value through profit or loss Composition of Investments as of June 30, 2024 | Investment Type | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Current Assets: Total Short-term Investments | 2,074,577 | 3,948,468 | | - Measured at Amortized Cost | 236,901 | 2,316,753 | | - Measured at Fair Value Through Profit or Loss | 1,837,676 | 1,631,715 | | Non-current Assets: Total Long-term Investments | 2,139,558 | 1,723,173 | | - Measured at Amortized Cost | 1,209,082 | 683,879 | | - Measured at Fair Value Through Profit or Loss | 930,476 | 1,039,294 | - Short-term investments measured at amortized cost are time deposits within one year, bearing fixed interest rates[99](index=99&type=chunk) - Short-term investments measured at fair value through profit or loss are wealth management products with expected returns ranging from **1.90% to 4.58%**[100](index=100&type=chunk) - Long-term investments measured at amortized cost are time deposits with maturities of **2 to 3 years**, bearing fixed annual interest rates ranging from **2.70% to 3.56%**[101](index=101&type=chunk) - Long-term investments measured at fair value through profit or loss include equity interests in private and listed companies and wealth management products with maturities over one year, with expected returns ranging from **3.43% to 8.00%**[102](index=102&type=chunk) [Prepayments and Other Receivables](index=35&type=section&id=Prepayments%20and%20Other%20Receivables) This section presents the detailed composition of the company's non-current and current prepayments and other receivables as of June 30, 2024, and December 31, 2023 Prepayments and Other Receivables as of June 30, 2024 | Item | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Non-current, Total | 322,633 | 792,970 | | Current, Total | 5,300,889 | 4,369,903 | | - Designated Deposits with Restricted Use | 2,684,051 | 2,007,597 | | - Amounts Due from Related Parties | 561,552 | 428,738 | | - Prepayments to Ticketing Suppliers | 982,377 | 779,802 | [Trade Receivables](index=36&type=section&id=Trade%20Receivables) This section provides an aging analysis of the company's trade receivables, showing the amounts within different aging brackets Aging Analysis of Trade Receivables as of June 30, 2024 | Aging | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Up to Six Months | 1,501,791 | 1,209,113 | | Over Six Months | 300,089 | 132,606 | | Total (net of impairment allowance) | 1,691,953 | 1,218,288 | [Derivative Financial Instruments](index=36&type=section&id=Derivative%20Financial%20Instruments) This section describes the company's derivative financial instruments, primarily capped foreign exchange forward contracts, and presents their fair value and net gains recognized in profit or loss - The company holds capped foreign exchange forward contracts as derivative financial instruments, with a fair value of **RMB 18.19 million** as of June 30, 2024[106](index=106&type=chunk) Q2 and H1 2024 Net Gains from Derivative Financial Instruments | Item | 2024 Q2 (RMB thousands) | 2023 Q2 (RMB thousands) | 2024 H1 (RMB thousands) | 2023 H1 (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Realized Net Gains from Foreign Exchange Forward Contracts Recognized in Other Net Losses | – | 2,167 | 8,624 | 2,167 | | Unrealized Gains/(Losses) from Foreign Exchange Forward Contracts Recognized in Other Net Losses | 106 | 26,343 | (6,644) | 32,087 | | Total | 106 | 28,510 | 1,980 | 34,254 | [Borrowings](index=37&type=section&id=Borrowings) This section details the composition of the company's non-current and current borrowings as of June 30, 2024, and December 31, 2023, including unsecured and secured bank borrowings Composition of Borrowings as of June 30, 2024 | Borrowing Type | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Total Non-current Liabilities | 760,784 | 10,942 | | - Unsecured Long-term Bank Borrowings | 406,063 | 1,442 | | - Secured Long-term Bank Borrowings | 354,721 | 9,500 | | Total Current Liabilities | 2,357,718 | 2,540,095 | | - Unsecured Short-term Bank Borrowings | 2,217,405 | 634,136 | | - Current Portion of Unsecured Long-term Bank Borrowings | 45,533 | 1,814,969 | | Total Borrowings | 3,118,502 | 2,551,037 | - The company entered into a loan agreement on March 20, 2024, borrowing **RMB 500 million** for acquisition refinancing, which is an unsecured loan[109](index=109&type=chunk) - The company entered into a loan agreement on January 9, 2024, borrowing **RMB 410 million** for acquisition refinancing, secured by **100%** equity interest in a subsidiary[109](index=109&type=chunk) [Trade Payables](index=37&type=section&id=Trade%20Payables) This section provides an aging analysis of the company's trade payables, showing the amounts within different aging brackets Aging Analysis of Trade Payables as of June 30, 2024 | Aging | June 30, 2024 (RMB thousands) | December 31, 2023 (RMB thousands) | | :--- | :--- | :--- | | Up to Six Months | 4,832,766 | 3,916,065 | | Over Six Months | 278,657 | 214,917 | | Total | 5,111,423 | 4,130,982 | [Corporate Governance and Other Information](index=38&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section covers interim dividends, securities transactions, compliance with governance codes, audit committee review, post-reporting events, and report publication details [Interim Dividend](index=38&type=section&id=Interim%20Dividend) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2024 - The Board of Directors does not recommend the payment of a dividend for the six months ended June 30, 2024[110](index=110&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=38&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) For the six months ended June 30, 2024, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - For the six months ended June 30, 2024, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[111](index=111&type=chunk) [Standard Code for Securities Transactions and Corporate Governance Code](index=38&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20and%20Corporate%20Governance%20Code) The company has adopted and complied with the Standard Code for Securities Transactions and the Corporate Governance Code as set out in the Listing Rules, ensuring directors and employees with inside information adhere to relevant regulations - The company has adopted and complied with the Standard Code for Securities Transactions as set out in Appendix C3 to the Listing Rules, and directors have confirmed compliance[113](index=113&type=chunk) - The company has adopted and applied the principles and code provisions set out in the Corporate Governance Code and has complied with them for the six months ended June 30, 2024[114](index=114&type=chunk) [Audit Committee](index=38&type=section&id=Audit%20Committee) The Audit Committee has reviewed the Group's accounting principles, internal controls, and financial reporting matters, deeming the financial results for the six months ended June 30, 2024, to be in compliance with relevant standards and appropriately disclosed - The Audit Committee comprises three members, including two independent non-executive directors and one non-executive director, in compliance with the Listing Rules' terms of reference[115](index=115&type=chunk) - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial results for the six months ended June 30, 2024, and considers them to be in compliance with relevant accounting standards, rules, and regulations[115](index=115&type=chunk) [Events After the Six Months Ended June 30, 2024](index=38&type=section&id=Events%20After%20the%20Six%20Months%20Ended%20June%2030%2C%202024) This section discloses significant events that occurred after the reporting period, including the termination of a letter of intent and the refund of earnest money - On August 5, 2024, the investor and the seller entered into an agreement to terminate the letter of intent, and the earnest money of **RMB 100 million** was refunded to the investor on August 7, 2024[116](index=116&type=chunk) [Publication of Results Announcement and Interim Report](index=39&type=section&id=Publication%20of%20Results%20Announcement%20and%20Interim%20Report) This announcement has been published on the HKEX website and the company's website, and the interim report will be dispatched or made available electronically to shareholders in due course - This announcement is published on the HKEX website (www.hkexnews.hk) and the company's website (www.tongchengir.com)[117](index=117&type=chunk) - The interim report, including all information required by Appendix D2 of the Listing Rules, will be dispatched or made available electronically to shareholders in due course[117](index=117&type=chunk) [Definitions](index=39&type=section&id=Definitions) This section provides definitions for key terms and terminology used in the announcement to ensure readers' understanding of the report content - This section provides definitions for key terms and terminology used in the announcement, such as "Cumulative Serviced Passenger Trips," "Annual Paying Users," and "Corporate Governance Code"[118](index=118&type=chunk)[119](index=119&type=chunk)[121](index=121&type=chunk) [Acknowledgements and Board of Directors](index=41&type=section&id=Acknowledgements%20and%20Board%20of%20Directors) The Board of Directors expresses gratitude for the support and contributions of shareholders, management team, employees, business partners, and customers, and lists the members of the Board as of the announcement date - The Board of Directors extends its sincere gratitude for the support and contributions made by the company's shareholders, management team, employees, business partners, and customers[120](index=120&type=chunk) - The Board of Directors includes Executive Directors Wu Zhixiang (Co-Chairman) and Ma Heping (CEO), Non-executive Directors James Jianzhang Liang (Co-Chairman), Jiang Hao, Xie Qinghua, and Brent Richard Irvin, and Independent Non-executive Directors Yang Jiahong, Dai Xiaojing, and Han Yuling[120](index=120&type=chunk)[121](index=121&type=chunk)

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 18, representing a potential upside of 29% from the current price of HKD 13.98 [3][4][12]. Core Insights - The company's core business is expected to achieve steady growth, with a projected revenue increase of 48% year-on-year to RMB 4.25 billion in Q2, aligning with previous expectations. Accommodation revenue is anticipated to grow by 14%, while transportation ticketing revenue is expected to rise by 16%. The vacation business revenue is projected to reach RMB 720 million [3]. - The adjusted net profit for Q2 is forecasted to grow by 4.1% year-on-year to RMB 620 million, with an adjusted net profit margin declining by 6.2 percentage points to 14.5% due to lower profit margins in vacation services and increased investment in overseas operations [3]. - The summer travel demand remains strong, with the Civil Aviation Administration predicting a total passenger transport volume of 133 million during the summer, a 10% increase compared to 2019. International travel demand is robust, and the supply chain for international hotels has largely recovered to 2019 levels [3]. - The report highlights that average prices for flights and hotels have decreased year-on-year, which is expected to stimulate travel demand and support sustainable growth in the industry [3]. Financial Projections - Revenue projections for the company have been slightly adjusted, with 2024E revenue estimated at RMB 17.509 billion, reflecting a minor decrease of 0.37% from previous forecasts. The gross profit is projected at RMB 11.883 billion, with a gross margin of 67.9% [6]. - The adjusted net profit for 2024E is forecasted at RMB 2.507 billion, with a net profit margin of 14.3% [6]. Market Context - The report notes that the recent changes in industry average valuations have led to the adjustment of the target price to HKD 18, corresponding to a price-to-earnings ratio of 15x for 2024E and 12x for 2025E [3][4].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 26.10, indicating a potential upside of 56.1% from the current price of HKD 16.72 [4][5]. Core Insights - The company has shown resilient growth during the Dragon Boat Festival period, with hotel and transportation growth rates exceeding the market average. The management remains optimistic about the financial guidance for the entire year, expecting a positive performance in Q2 2024 and accelerated revenue growth in the second half of 2024 [2][3]. - The report suggests that the market has overreacted to concerns about profit margin dilution due to international business investments, which are expected to diminish in impact by the second half of 2024. The company's hotel Average Daily Rate (ADR) remains stable, contrasting with broader market pressures [2][3]. - The company is actively expanding its international business, aiming to increase its revenue contribution from 3%-4% to 10%-15% over the next 2-3 years, particularly in the Southeast Asian market [2][3]. Financial Summary - The company’s revenue is projected to grow from RMB 11,896 million in FY23A to RMB 17,607 million in FY24E, representing a year-on-year growth of 48.0% [3][11]. - Adjusted net profit is expected to increase from RMB 2,199.1 million in FY23A to RMB 2,606.8 million in FY24E, reflecting an 18.5% growth [3][11]. - The diluted earnings per share (EPS) is forecasted to rise from RMB 0.98 in FY23A to RMB 1.16 in FY24E, indicating a significant recovery from previous declines [3][11]. Market Position and Performance - The company has seen a significant increase in market share, with domestic travel during the Dragon Boat Festival increasing by 6.3% year-on-year, and total spending rising by 8.1% [2][3]. - The hotel ADR is expected to remain stable, with a projected year-on-year hold in the first half of 2024, attributed to a higher proportion of budget hotels in the company's portfolio [2][3]. - The company’s stock has shown a relative performance decline of 8.2% over the past six months, while the overall market has seen a larger drop of 18.8% [5].

Investment Rating - The report assigns a "Buy" rating for the company, marking the first coverage of the stock [1]. Core Insights - The company has shown robust performance in its core business, with outbound travel operations beginning to gain momentum. In Q1 2024, the company achieved revenue of 3.9 billion RMB, a year-on-year increase of 50%, and a net profit of 400 million RMB, up 5% year-on-year [1]. - The company benefits from the recovery of domestic travel demand, with its core OTA business generating revenue of 3.2 billion RMB, a 24% increase year-on-year. The traffic ticketing segment reached a record high with revenue of 1.7 billion RMB, up 26% year-on-year [1][4]. - User base expansion and value release are evident, with the company serving 1.8 billion users, a 57% increase year-on-year, and a monthly active user count of 42.6 million, up 3% year-on-year [1][4]. Financial Performance - The company reported a significant recovery in financial metrics, with 2023 revenue reaching 11.9 billion RMB, an 81% increase year-on-year, and a net profit of 1.6 billion RMB, compared to a loss of 200 million RMB the previous year [4][19]. - The gross margin for Q1 2024 was 65%, down 10 percentage points year-on-year, primarily due to the different business models between online platforms and offline travel agencies [1][4]. - The adjusted net profit for 2024-2026 is projected to be 2.6 billion RMB, 3.3 billion RMB, and 4.2 billion RMB, respectively, with the current stock price corresponding to an adjusted PE of 15X, 12X, and 10X [1][17]. Market Position and Strategy - The company focuses on the lower-tier market, with 86.9% of its registered users residing in non-first-tier cities, and aims to attract younger consumers through creative marketing strategies [7][11]. - The partnership with Tencent provides a stable flow of users, with significant traffic sourced from WeChat, contributing to the company's user growth [11][12]. - The company is actively expanding its overseas business, with outbound travel revenue showing strong growth, particularly in international ticketing and hotel bookings, which increased by 260% and 150% year-on-year, respectively [15][16].

Investment Rating - The report maintains an "Accumulate" rating for the company [1][4]. Core Insights - The company's Q1 2024 performance met expectations, with total revenue of 3.881 billion yuan, a year-on-year increase of 45.3%, and a net profit attributable to shareholders of 397 million yuan, up 5.0% year-on-year [3]. - The company is experiencing robust growth in its other business segments, with Q1 2024 revenue from these segments totaling 1.165 billion yuan, driven by advertising, membership services, and hotel management [3]. - The company is actively enhancing its cross-selling strategies and increasing investments in international ticketing, which has led to a significant rise in international ticket sales, up 260% year-on-year [3]. Financial Forecasts - The company forecasts total revenue to grow from 11.896 billion yuan in 2023 to 24.115 billion yuan by 2026, reflecting a compound annual growth rate (CAGR) of approximately 15.30% [2][4]. - Net profit attributable to shareholders is expected to increase from 1.554 billion yuan in 2023 to 3.540 billion yuan by 2026, with a projected CAGR of 25.00% [2][4]. - The report anticipates earnings per share (EPS) to rise from 0.68 yuan in 2023 to 1.56 yuan by 2026, indicating a strong growth trajectory [2][4]. Market Performance - The company's stock closed at 17.60 HKD, with a market capitalization of approximately 40.05 billion HKD [5]. - The stock has seen a 52-week range between 13.12 HKD and 22.55 HKD, indicating volatility in market performance [5]. User Engagement and Market Strategy - As of Q1 2024, the company reported 229 million annual paying users, with a purchase frequency of 8.0 times per user, reflecting an increase in user engagement [3]. - The company is focusing on penetrating lower-tier markets, with 87% of registered users residing outside first-tier cities, and over 70% of new paying users from these areas [3].