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].
同程旅行：端午韧性增长持续，憧憬2H24E利润率回升