Core Viewpoint - The report from Guotai Junan maintains an "overweight" rating for Tongcheng Travel (00780), citing a stable competitive landscape in the OTA industry and the company's ability to enhance profit margins through improved subsidy efficiency [1] Financial Performance - In Q2 2025, the company achieved revenue of 4.669 billion yuan, a year-on-year increase of 10%, with core OTA revenue reaching 4.008 billion yuan, up 13.66% [3] - Adjusted net profit for Q2 2025 was 777.5 million yuan, reflecting an 18% year-on-year growth, with an adjusted net profit margin of 16.6%, up 1.1 percentage points [3][4] - Core OTA operating profit was 1.07 billion yuan, a 24.69% increase, with an operating profit margin of 26.7%, up 2.4 percentage points [3] Market Dynamics - The competitive landscape remains stable, with no significant intensification of competition, as evidenced by a 2.2 percentage point decrease in sales expense ratio [4] - The improvement in marketing efficiency continues to drive profit growth, indicating strong certainty in profit growth despite the competitive environment [4] Growth Outlook - The company maintains adjusted net profit forecasts for 2025, 2026, and 2027 at 3.311 billion, 3.847 billion, and 4.402 billion yuan respectively [1] - The target market capitalization is set at 59.6 billion yuan, translating to a target price of 27.88 HKD based on an 18x PE valuation for 2025 [1]