First Shanghai Securities·2024-09-04 08:48Investment Rating - The report assigns a "Buy" rating for the company with a target price of $61.52, indicating a potential upside of 30.0% from the current stock price of $47.33 [2][3]. Core Insights - The company demonstrated resilience in its domestic business while continuing to experience high growth in outbound and overseas markets. In Q2 2024, the company achieved revenue and adjusted net profit of RMB 127.9 billion and RMB 49.9 billion, respectively, representing year-on-year growth of 13.5% and 45.2% [1]. - The company’s domestic travel segment showed steady performance, with significant growth in accommodation bookings and travel management services. The international OTA platform also saw a revenue increase of approximately 70% year-on-year in Q2 2024 [1][2]. - The company’s profitability improved significantly, with an adjusted net profit margin of 39.0%, up 8.5 percentage points year-on-year, driven by cost optimization and increased income from joint ventures [1]. Summary by Sections Financial Performance - For H1 2024, the company reported revenues of RMB 247.1 billion and adjusted net profits of RMB 90.4 billion, reflecting year-on-year increases of 20.7% and 64.4%, respectively [1]. - The company’s Q2 2024 revenue and adjusted net profit were RMB 127.9 billion and RMB 49.9 billion, showing year-on-year growth of 13.5% and 45.2% [1]. Business Segments - In H1 2024, revenue from accommodation bookings, transportation tickets, vacation packages, business travel management, and other services were RMB 96.3 billion, RMB 98.7 billion, RMB 19.1 billion, RMB 11.4 billion, and RMB 21.5 billion, respectively, with year-on-year growth rates of 24.0%, 10.0%, 72.2%, 11.2%, and 34.5% [1]. - The company’s international OTA platform continued to expand rapidly, with Q2 2024 revenue growth of approximately 70% year-on-year [1][2]. Profitability Metrics - The overall gross margin for Q2 2024 was 81.8%, with R&D, sales, and management expense ratios of 23.4%, 22.2%, and 8.4%, respectively [1]. - The adjusted net profit margin improved to 39.0%, indicating a significant enhancement in profitability [1].