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].
同程旅行：核心业务预计稳健增长，暑期出游呈现量涨价跌