Investment Rating - Buy (First Coverage) [2] Core Views - The company is a leading player in China's online travel industry, focusing on lower-tier markets and leveraging innovative marketing strategies to capture post-pandemic recovery opportunities [2] - The online travel market is recovering strongly, with lower-tier markets being a significant growth driver [2] - The company benefits from its strategic partnerships with Tencent and Ctrip, which provide traffic and hotel inventory, respectively [2] - The company is actively expanding its traffic sources and building its own supply chain, including through acquisitions and international expansion [2] Revenue and Profit Forecast - Revenue for 2024-2026 is projected to be RMB 17.34 billion, RMB 20.36 billion, and RMB 23.37 billion, respectively [2] - Net profit attributable to shareholders for 2024-2026 is expected to be RMB 1.90 billion, RMB 2.45 billion, and RMB 2.91 billion, respectively [2] - The company's PE ratio for 2024-2026 is estimated at 15x, 12x, and 10x, respectively [2] Market Position and Competitive Advantage - The company holds a 14.8% market share in China's online travel market, ranking third after Ctrip and Meituan [2] - The company's traffic is primarily sourced from Tencent's ecosystem, with over 80% of monthly active users coming from WeChat Mini Programs [2] - The company shares hotel inventory with Ctrip, which accounts for 60%-70% of its hotel supply [2] - The company is expanding its supply chain through acquisitions and technology solutions for small and medium-sized hotels in lower-tier cities [2] Industry Trends - China's online travel market is highly concentrated, with the top three players (Ctrip, Meituan, and the company) holding a combined market share of 71.7% [2] - The online travel market is expected to grow from RMB 1.8 trillion in 2019 to RMB 2.6 trillion by 2025, driven by increasing online penetration and lower-tier market growth [2] - Post-pandemic, there is a shift towards short-distance travel and tourism in lower-tier cities, which benefits the company's focus on these markets [2] Traffic and User Growth - The company's traffic from its own app increased from 4.0% to 4.7% between August 2023 and March 2024 [2] - The company is expanding its traffic sources by investing in platforms like Douyin and strengthening its independent app operations [2] - The company is also tapping into offline channels, such as music festivals and local travel opportunities, to capture new users [2] International Expansion - The company is accelerating its global supply chain layout, particularly in North America, through app development and offline store openings [2] - The company has launched a "Destination Global Plan" to expand its international presence, with partnerships in countries like South Korea, Singapore, and Hungary [2] - The company's international hotel bookings have fully recovered to 2019 levels, with a 330% year-on-year increase in international hotel room nights in 2023 [2] Valuation and Target Price - The target price for the company is set at HKD 16.71, representing a potential upside from the current price of HKD 13.58 [2] - The valuation is based on the company's strong position in China's lower-tier travel market, its self-built traffic channels, and its global supply chain layout [2] Key Catalysts for Stock Price - Short-term catalysts include the growth in travel demand during the Mid-Autumn Festival and National Day holidays, particularly in lower-tier cities [2] - Long-term catalysts include the company's international expansion and its ability to capture the growth in China's outbound tourism market [2]
同程旅行：投资价值分析报告：两大股东赋能+自建供应链体系，助力公司疫后强劲复苏