Guohai Securities·2024-05-23 16:01Investment Rating - The report maintains a "Buy" rating for the company [1][8]. Core Views - The company has shown impressive profit performance, with a focus on the recovery of outbound travel and international growth. The strong growth in net operating income and profit is attributed to heightened travel sentiment and the easing of supply constraints in the tourism industry [1][4]. Summary by Relevant Sections Financial Performance - In Q1 2024, the company achieved net operating income of 11.9 billion yuan, a year-on-year increase of 29%, and a net profit attributable to shareholders of 4.3 billion yuan, also up 28% year-on-year. The Non-GAAP net profit was 4.1 billion yuan, reflecting a significant year-on-year increase of 96% [4][6]. - The breakdown of revenue sources includes: - Transportation ticketing: 5 billion yuan (YoY +20%) - Accommodation bookings: 4.5 billion yuan (YoY +29%) - Travel vacation: 0.88 billion yuan (YoY +129%) - Business travel management: 0.51 billion yuan (YoY +15%) [4][6]. Outbound Travel Business - The company leads the industry in the recovery of outbound travel, with hotel and flight bookings returning to 90%-100% of pre-pandemic levels. The company reported over 100% year-on-year growth in outbound flight and hotel bookings for Q1 2024, with prices normalizing to 115% of 2019 levels [4][5]. - The company expects outbound travel to continue leading the market by 20-30 percentage points, with estimates suggesting that by the end of 2024, outbound travel from China could recover to 80% of 2019 levels [4][6]. Domestic Business - Domestic hotel and flight bookings grew by 20%-30% year-on-year in Q1 2024, driven by changing consumer preferences for personalized and high-quality travel experiences. The company anticipates double-digit growth in domestic travel bookings for Q2 2024 [5][6]. Global OTA Business - The Trip.com platform saw revenue growth of approximately 80% year-on-year in Q1 2024, contributing to 10% of the group's total revenue. The inbound travel segment experienced a remarkable 400% year-on-year increase in bookings, supported by visa-free policies for citizens from over 15 countries [6][7]. - The mobile booking ratio for Trip.com reached 65%, with major Asian markets exceeding 75%, indicating a strong focus on mobile platform investments [6][7]. Earnings Forecast and Valuation - The company is projected to benefit from the release of domestic travel demand, the recovery of outbound travel, and the expansion of its global OTA business. The revenue forecasts for 2024-2026 are 53.2 billion, 61.4 billion, and 67.7 billion yuan, respectively, with net profits of 14.8 billion, 17.5 billion, and 20 billion yuan [6][7]. - The target market capitalization for 2024 is set at 328.6 billion yuan, with a target price of 518 HKD, maintaining the "Buy" rating [6][7].