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同程旅行:Resilient travel consumption to continue

Investment Rating - The report maintains a "BUY" rating for Tongcheng Travel with a target price of HK$26.1, implying a 23.1% upside from the current price of HK$21.20 [4][2]. Core Insights - Tongcheng Travel ("TC") reported a strong performance in 1Q24, with revenue increasing by 50% year-over-year (YoY) and adjusted net profit rising by 11% YoY, both exceeding consensus estimates [2][3]. - The company is expected to continue gaining market share in 2Q24, driven by robust travel demand during holidays and recovery in international business [2][3]. - For 2Q24, total revenue is forecasted to grow by 49% YoY, with core OTA revenue projected to increase by 23.5% YoY [2][3]. Financial Performance - In 1Q24, TC's revenue reached RMB 3,866 million, reflecting a 50% YoY growth and a 23% quarter-over-quarter increase [12][2]. - Adjusted net profit for 1Q24 was RMB 559 million, up 11% YoY, with a net profit margin of 14.4% [12][2]. - The company expects adjusted net profit to rise to RMB 621 million in 2Q24, indicating a slight improvement in net profit margin to 14.6% [2][3]. Revenue Breakdown - In 1Q24, revenue from transportation increased by 26% YoY, hotel revenue grew by 16% YoY, and other revenue surged by 36% YoY, driven by advertising and hotel management [2][3]. - International business is anticipated to contribute 3%-4% of total revenue in 2Q24, with international air ticketing volume and hotel room nights increasing significantly [2][3]. Future Outlook - The report projects continued strong momentum for TC, with expectations of robust growth in both domestic and international segments [2][3]. - The full-year financial forecasts for FY24-26 remain unchanged, with a DCF-based target price of HK$26.1, reflecting a P/E ratio of 21x for FY24E [2][3].