Investment Rating - The report maintains a "Buy" rating for the company with a target price adjusted from HKD 605 to HKD 591, indicating a potential upside of 16.9% [1][13]. Core Insights - The company reported first-quarter results that exceeded market expectations, with a revenue of RMB 13.8 billion, reflecting a year-on-year growth of 16%. The adjusted net profit increased by 3% to RMB 4.2 billion, surpassing market forecasts by 10% [5][6]. - The demand for leisure travel remains strong, with expectations for a 14% revenue growth in the second quarter. The company anticipates stable growth in business volume as the competitive landscape improves [5][6]. - Adjustments to revenue and profit forecasts were made due to anticipated impacts from tariff disruptions on outbound business travel [1][5]. Financial Performance Summary - **Revenue Forecasts**: The total revenue for 2025 is projected at RMB 61.694 billion, with a growth rate of 15.6%. This is a slight decrease from previous estimates [4]. - **Profitability Metrics**: The adjusted operating profit for 2025 is expected to be RMB 18.084 billion, with an adjusted net profit of RMB 17.927 billion, reflecting a net profit margin of 29.1% [4][14]. - **Segment Performance**: The hotel accommodation segment is projected to generate RMB 25.946 billion in 2025, while transportation ticketing is expected to contribute RMB 22.261 billion [4][8]. Market Position and Trends - The company's market capitalization stands at approximately HKD 330.23 billion, with a 52-week high of HKD 586.00 and a low of HKD 310.20 [3]. - The average daily trading volume is reported at 3.20 million shares, indicating active market participation [3]. Future Outlook - The company expects continued growth in hotel and transportation segments, with hotel nights in mainland China projected to increase by 10-15% and outbound hotel nights by 15-20% in the upcoming quarters [5][8]. - The competitive landscape is expected to ease some pressure on monetization, allowing for more stable profit margins moving forward [5].

Investment Rating - The report maintains a "Buy" rating for the company with a target price adjusted from HKD 605 to HKD 591, indicating a potential upside of 16.9% [1][13]. Core Insights - The company reported first-quarter results that exceeded market expectations, with a revenue of RMB 138 billion, reflecting a year-on-year growth of 16%. The adjusted net profit increased by 3% to RMB 42 billion, surpassing market forecasts by 10% [5][6]. - The demand for leisure travel remains robust, with expectations for a 14% revenue growth in the second quarter. The company anticipates stable growth in business volume as the competitive landscape improves [5][6]. - Adjustments to revenue and profit forecasts were made due to anticipated impacts from tariff disruptions on business travel outbound demand [1][5]. Financial Performance Summary - **Revenue Forecasts**: - 2025E: RMB 61,694 million (down 1.0% from previous forecast) - 2026E: RMB 69,889 million (down 1.6%) - 2027E: RMB 78,816 million (down 2.2%) [4]. - **Profitability Metrics**: - Adjusted operating profit for 2025E is projected at RMB 18,084 million, with an adjusted operating profit margin of 29.3% [4]. - Adjusted net profit for 2025E is expected to be RMB 17,927 million, with a net profit margin of 29.1% [4]. - **Market Position**: - The company’s market capitalization is approximately HKD 330.23 billion, with a 52-week high of HKD 586.00 and a low of HKD 310.20 [3][6]. Earnings Performance Overview - The first quarter of 2025 showed a revenue increase in various segments: - Hotel accommodation: RMB 5,541 million (up 23% year-on-year) - Transportation ticketing: RMB 5,418 million (up 8%) - Vacation services: RMB 947 million (up 7%) - Corporate travel: RMB 573 million (up 12%) [6]. - The company’s gross profit for the first quarter was RMB 11,125 million, with a gross profit margin of 80.3% [6]. Future Outlook - For the second quarter of 2025, the company expects: - Hotel accommodation revenue to reach RMB 6,000 million (up 17%) - Transportation ticketing revenue to be around RMB 5,300 million (up 9%) - Total revenue projected at RMB 14,600 million (up 14%) [8]. - The company is also focusing on maintaining a competitive edge in the market, with expectations of stable growth in business volume as the industry recovers [5][6].

Investment Rating - The investment rating for the company is "Outperform the Market" [5] Core Views - The company demonstrated steady revenue growth in Q1 2025, with a revenue of 138.3 billion yuan, representing a year-on-year increase of 16.2%. However, the profit margin decreased compared to the previous year [1][9] - The company is strategically increasing investments in international platforms while maintaining flexibility in marketing strategies, which is expected to enhance growth opportunities [3][12] - The company is leveraging the recovery in inbound tourism and the growth of outbound travel, with significant increases in hotel bookings and international travel reservations [2][10] Revenue Breakdown - In Q1 2025, the company reported accommodation booking revenue of 55.4 billion yuan (+23.2%), transportation ticketing revenue of 54.2 billion yuan (+8.4%), and other income sources showing substantial growth [2][10] - Domestic hotel bookings continue to grow, with a double-digit increase in room nights, while outbound travel bookings have recovered over 120%, outpacing industry capacity growth [2][10] - The international platform saw a booking increase of over 60%, driven by favorable visa policies and a significant rise in inbound tourism [2][10] Profitability Analysis - The company's gross profit margin decreased by 0.8 percentage points year-on-year in Q1 2025, attributed to increased personnel costs and strategic investments in international expansion [3][11] - The sales expense ratio for Q1 was 21.4%, which is below the annual budget, indicating a flexible approach to marketing expenditures [3][11] - The company expects profit growth to lag behind revenue growth in the short term due to margin pressures, with a projected CAGR of 11% for profits versus 15% for revenue over the next three years [12] Financial Forecasts and Valuation - The company forecasts Non-GAAP net profits of 182 billion yuan, 209 billion yuan, and 244 billion yuan for 2025, 2026, and 2027 respectively, with corresponding dynamic PE ratios of 19, 16, and 14 times [12][19] - Revenue is expected to grow significantly, with projections of 61.6 billion yuan in 2025, 71.1 billion yuan in 2026, and 81.9 billion yuan in 2027, reflecting a robust growth trajectory [4][19] - The company maintains a strong cash flow position and is proposing an additional share buyback plan, indicating a commitment to shareholder returns [12]

Investment Rating - The investment rating for the company is "Outperform the Market" [5] Core Views - The company demonstrated steady revenue growth in Q1 2025, with a revenue of 138.3 billion yuan, representing a year-on-year increase of 16.2%. However, the profit margin decreased compared to the previous year [1][9] - The company is strategically increasing investments in international platforms while maintaining flexibility in marketing strategies, which is expected to enhance growth opportunities [3][12] - The company is leveraging the recovery in inbound tourism and the growth of outbound travel, with significant increases in hotel bookings and international travel reservations [2][10] Revenue Breakdown - In Q1 2025, the company reported accommodation booking revenue of 55.4 billion yuan (+23.2%), transportation ticketing revenue of 54.2 billion yuan (+8.4%), and other income sources showing substantial growth [2][10] - Domestic hotel bookings continue to grow, with a double-digit increase in room nights, while outbound travel bookings have recovered over 120%, outpacing industry capacity growth [2][10] - The international platform saw a booking increase of over 60%, driven by favorable visa policies and a significant rise in inbound tourism [2][10] Profitability Breakdown - The company's gross margin decreased by 0.8 percentage points year-on-year in Q1 2025, attributed to increased personnel costs and strategic investments in international platforms [3][11] - The sales expense ratio for Q1 was 21.4%, which is below the annual budget, indicating a flexible approach to marketing expenditures [3][11] - The company expects profit growth to lag behind revenue growth in the short term due to profit margin fluctuations, with a projected CAGR of 11% for profits versus 15% for revenue over the next three years [12] Financial Forecasts and Valuation - The company forecasts Non-GAAP net profits of 182 billion yuan, 209 billion yuan, and 244 billion yuan for 2025, 2026, and 2027, respectively, with corresponding dynamic PE ratios of 19, 16, and 14 [12][19] - The projected revenue for 2025 is 61.6 billion yuan, reflecting a 15.6% increase from the previous year [4][19] - The company maintains a strong cash flow position and is proposing an additional share buyback plan, indicating a positive outlook for shareholder returns [12][19]

Core Viewpoint - Company maintains revenue expectations for 2025/2026 while raising non-GAAP net profit forecasts by 3% for both years due to better-than-expected cost control [1] Group 1: Financial Performance - Company reported Q1 2025 revenue of 13.8 billion, a 16% year-on-year increase, meeting consensus expectations; non-GAAP net profit reached 4.2 billion, exceeding market expectations by 9% due to controlled marketing expenses and favorable foreign exchange gains [2] - Non-GAAP net profit forecasts for 2025 and 2026 are adjusted to 16.4 billion and 18.9 billion respectively [1] Group 2: Domestic Tourism Demand - Domestic hotel booking revenue for Q1 2025 was 5.54 billion, a 23% year-on-year increase, surpassing market expectations; domestic hotel booking volume increased nearly 20% [3] - Company anticipates mid to low double-digit year-on-year growth in domestic hotel night volume for Q2 2025 [3] Group 3: International Travel Trends - During the May Day holiday, outbound hotel and flight bookings increased by 30%, with demand for destinations like Japan and Europe compensating for the slow recovery in Thailand [4] - Company expects a 15-20% year-on-year increase in outbound hotel and flight bookings for Q2 2025, returning to 120% of 2019 levels [4] Group 4: Trip.com Growth Strategy - Trip.com achieved over 60% year-on-year growth in international OTA bookings, with its revenue share rising to 13%; inbound travel bookings surged by approximately 100% [5] - Company plans to maintain investment in Trip.com, focusing on marketing in low-penetration markets and enhancing brand presence in the Middle East and Europe, with an expected operating profit margin of 28% for 2025 [5]

Macro Insights - In April, the general fiscal expenditure increased by 12.9% year-on-year, indicating a continued moderate easing of fiscal policy, although the momentum of fiscal expansion showed seasonal slowdown [2] - The general fiscal revenue turned positive with a 2.7% year-on-year increase, primarily driven by a significant rebound in government fund revenue [2] - The fiscal deficit recorded 336.7 billion yuan in April, an increase of 247.9 billion yuan compared to the same period last year, maintaining a loose fiscal stance [2] Strategy Insights - The market consensus remains fragmented, with domestic investors showing varied interest across different sectors, while foreign capital continues to flow into the A-share market, albeit with structural divergence [3] - The recent downgrade of the US sovereign credit rating by Moody's from Aaa to Aa1 reflects worsening long-term debt issues, which may influence global asset prices [3] - The recent interest rate cuts by major banks aim to support the real economy while maintaining reasonable bank interest margins, although ongoing rate declines may increase deposit-taking pressures [6] Fixed Income Insights - The recent adjustments in deposit and LPR rates indicate a comprehensive easing of policy rates, with the one-year LPR now at 3.0% and various deposit rates reduced [4] - The 2024 city investment report highlights structural improvements in local debt management, although inherent pressures remain, particularly regarding profitability and debt repayment capabilities [10] Technology Sector Insights - NVIDIA's recent announcements at Computex 2025 indicate a shift towards an open ecosystem for AI deployment, which may attract large cloud service providers [7] - The competitive landscape among global battery manufacturers is intensifying, with domestic firms like CATL leveraging supply chain integration and diverse technology paths for global expansion [11] Company-Specific Insights - Nanjing E-commerce is undergoing a brand transformation aimed at enhancing product quality and restoring brand image, with expected revenue growth in 2024 [12] - Ningde Times' recent listing on the Hong Kong Stock Exchange is anticipated to bolster its global market competitiveness and facilitate international business expansion [13] - Trip.com reported a 16.2% year-on-year revenue increase in Q1 2025, driven by resilient domestic travel demand and strong growth in cross-border business [14] - Three Life Health's collaboration with Pfizer on the 707 project is expected to unlock significant commercial potential, with a maximum milestone payment of $6.05 billion [15] - Leap Motor's Q1 2025 performance exceeded expectations, with a revenue increase of 187.1% year-on-year, driven by high sales growth [17]

Group 1 - Hong Kong stocks in the pharmaceutical and internet sectors saw significant gains, with companies like WanGuo Data-SW rising over 12%, and others such as 3SBio, CanSino Biologics, and MicroPort Medical gaining over 6% [1] - The Hong Kong Technology 50 ETF (159750), which covers high-tech industries including internet, new energy vehicles, and innovative pharmaceuticals, increased by 0.79% [1] - The first quarter holdings data from top Chinese private equity firms such as Hillhouse, Gaoyi, and Jinglin attracted market attention, revealing new investments in companies like Baidu and Li Auto, as well as increased stakes in Pinduoduo, NetEase, Beike, JD.com, and Trip.com [1] Group 2 - Analysts noted a "see-saw" effect in capital flows, indicating a global revaluation of assets, with funds moving from overvalued US tech stocks to Chinese assets as their value becomes more apparent [2] - Open Source Securities' overseas market team suggested that while short-term volatility remains due to policy dynamics, the mid-term outlook requires assessment of tariff policies' potential pressure on China's economic fundamentals, which may limit significant rebounds in the Hong Kong market [2] - The focus for the Hong Kong market is on the main themes of China's economic transformation, including sectors like internet, automotive, and semiconductors [2]

Investment Rating - The investment rating for the company is "Buy" (maintained) for both US and Hong Kong stocks [7]. Core Views - The report expresses optimism about the company's long-term growth potential overseas, highlighting strong performance in both domestic and international travel sectors [1][3]. - The company's revenue for Q1 2025 was 13.9 billion RMB, representing a year-over-year increase of 16.2%, which aligns with market expectations [1][2]. - Adjusted net profit for Q1 2025 was 4.2 billion RMB, showing a year-over-year increase of 3.3%, exceeding expectations by 9.2% due to effective cost control [1][2]. Summary by Sections Q1 2025 Performance - The company reported a revenue of 13.9 billion RMB, which is a 16.2% increase year-over-year, meeting the consensus estimate of 13.8 billion RMB [1]. - Adjusted net profit was 4.2 billion RMB, a 3.3% increase year-over-year, surpassing expectations by 9.2% primarily due to better management of sales, research, and administrative expenses [1][2]. Domestic and International Travel Trends - Domestic travel demand remains resilient, with a double-digit growth in hotel bookings year-over-year, despite a slight decline in average daily rates [3]. - International business continues to grow, with inbound travel orders increasing over 100% year-over-year and outbound ticket and hotel orders exceeding 120% of 2019 levels [3]. Profit Forecast and Valuation - Revenue projections for 2025-2027 are estimated at 61.3 billion, 71.2 billion, and 82.3 billion RMB respectively, with adjusted net profits of 19.3 billion, 22.5 billion, and 26.0 billion RMB [4][11]. - The target price for the US stock is set at $78.00 and for the Hong Kong stock at HKD 559.40, based on a 19x PE ratio for 2025 [4][14].

Investment Rating - The report maintains a "BUY" rating for Trip.com Group (TCOM), with a target price of US$70.00, indicating a potential upside of 10.4% from the current price of US$63.38 [2][16]. Core Insights - Trip.com Group reported a total revenue of RMB13.9 billion for 1Q25, reflecting a 16% year-over-year growth, which aligns with forecasts and consensus estimates. The non-GAAP operating income was RMB4.0 billion, exceeding expectations by 7% due to optimized sales and marketing expenditures [1]. - The company is on track with its overseas expansion strategy, which is expected to enhance long-term value despite potential short-term earnings pressure from increased investments [1]. - The report anticipates resilient revenue growth in 2Q25, projecting a total revenue of RMB14.6 billion, representing a 15% year-over-year increase [7]. Financial Performance - For FY25E, total revenue is projected at RMB61.5 billion, with a year-over-year growth of 15.2%. The adjusted net profit is expected to be RMB17.8 billion, reflecting a slight decline of 1.3% compared to FY24A [8][10]. - The non-GAAP operating profit margin for 1Q25 was reported at 29.2%, which is 1.7 percentage points better than consensus estimates, driven by effective cost management [7][9]. - The company’s gross profit margin for 1Q25 was 80.3%, slightly below consensus expectations, indicating a need for continued focus on cost efficiency as revenue contributions from Trip.com increase [7][9]. Market Position and Growth - Trip.com’s domestic business showed strong booking volume growth, with hotel bookings increasing by approximately 10-15% year-over-year in 2Q25, while outbound bookings surpassed 120% of 2019 levels in 1Q25 [7]. - The international segment accounted for 13% of total revenue in 1Q25, with over 50% year-over-year growth, suggesting a robust recovery and expansion in overseas markets [7]. - The company is expected to maintain its investment strategy to support international growth, particularly in emerging markets like Japan, Malaysia, and Thailand, while also investing in new markets such as the Middle East and Europe [7].

Group 1: Ctrip Group (携程集团) - The first quarter revenue met expectations, while profit exceeded market expectations by 9%. The second quarter revenue is expected to grow by 14%, with adjusted operating profit remaining flat year-on-year. The demand for leisure travel continues to grow rapidly. Due to the impact of tariff disturbances on business travel outbound demand in the second quarter, revenue and profit forecasts have been slightly adjusted, with the target price lowered from HKD 605 to HKD 591, maintaining a buy rating [1] Group 2: QFIN Technology (奇富科技) - The first quarter Non-GAAP net profit was CNY 1.926 billion, a year-on-year increase of 59.9%, slightly exceeding the upper limit of the company's previous guidance. The company expects a second quarter Non-GAAP net profit of CNY 1.75-1.85 billion. The significant year-on-year profit growth is mainly attributed to the increase in platform service revenue and a decrease in provisioning expenses [2][3] - The company anticipates a slight decrease in funding costs and expects the net take rate to increase year-on-year for the full year of 2025. The forecast for 2025 Non-GAAP net profit is expected to grow by 15%. As an industry-leading credit technology platform, the company balances risk and growth with diversified business models, providing attractive shareholder returns [3] Group 3: Global Indices and Market Overview - The Hang Seng Index closed at 23,681, reflecting a 1.52% increase, with a year-to-date increase of 15.89%. The Hang Seng China Enterprises Index also rose by 1.52%, with a year-to-date increase of 17.82% [4] - Major commodities showed varied performance, with Brent crude oil at USD 65.52, down 14.32% over three months, while gold futures rose by 9.83% [5] Group 4: Economic Data Releases - Upcoming economic data releases include the US Markit Manufacturing PMI expected at 50.2 and the US initial jobless claims expected at 229K. For China, the industrial value-added year-on-year growth is expected to be 7.7% [6]