Core Viewpoint - Ctrip Group has been selected as a core asset in the consumer tourism sector for 2026, reflecting its strong position in the recovering domestic consumption market and its structural transformation into a comprehensive tourism service provider [1] Company Analysis - Ctrip is transitioning from a "single booking platform" to a "full-domain tourism ecosystem service provider," leveraging its leadership in the online travel agency (OTA) sector [1] - The company reported a revenue of 47 billion yuan for the first three quarters of 2025, a year-on-year increase of 16%, and an adjusted operating profit of 13.29 billion yuan, up 11.5%, showcasing its resilience in a challenging consumption environment [1] - Ctrip's unique model combines a stable domestic base, international business expansion, comprehensive supply chain coverage, and technological empowerment, resulting in a profit structure characterized by both cyclical resilience and growth certainty [1] Industry Trends - The tourism service industry is experiencing growth, benefiting from an increase in domestic tourism service share and a significant recovery in inbound tourism due to favorable policies aimed at stimulating consumption [3] - The domestic tourism market is showing steady growth, with a year-on-year increase of 18% in tourist numbers and 11.5% in tourism revenue for the first three quarters of 2025 [8] - The OTA penetration rate in China reached 51.5% in 2024 and continues to rise, indicating a shift towards online booking as the mainstream mode of tourism consumption [8] Competitive Advantages - Ctrip has established significant barriers to entry through brand and traffic advantages, with a user repurchase rate exceeding 60% [4] - The company has a robust supply chain covering over 750,000 hotels in more than 600 cities domestically and 1.2 million hotels globally, providing a comprehensive one-stop service for diverse travel needs [4][5] - Ctrip's early global expansion through acquisitions has positioned it well in the international market, with substantial growth in international OTA bookings [5] Business Structure - Ctrip's domestic tourism business remains the core profit base, contributing over 80% of revenue in the first three quarters of 2025, supported by both high-end and budget travel segments [10] - The international tourism business is rapidly growing, with a significant increase in bookings for inbound and outbound travel, expected to become a core growth driver alongside domestic operations [10] - The company has diversified its service offerings beyond core travel bookings to include vacation products, scenic tickets, and business travel management, enhancing its revenue structure [11][12] Investment Outlook - Ctrip is viewed as an attractive investment opportunity due to its low valuation and strong growth potential, with expected revenue growth of 15%-17% in 2026 [13] - The company is anticipated to benefit from policy incentives, rising consumer income, and a recovering tourism market, positioning it as a key player in the consumption recovery cycle [14]

Core Viewpoint - Ctrip Group has been selected as a core asset in the consumer tourism sector for 2026, reflecting its strong position and potential for growth in the recovering tourism market [2][3]. Summary by Sections Selection Logic and Analysis - Despite pressures in the domestic consumption market in 2025, the tourism sector shows clear signs of recovery, supported by policies aimed at increasing consumer spending [3]. - Ctrip is transitioning from a "domestic OTA leader" to a "comprehensive tourism ecosystem service provider," leveraging its unique model of "stable domestic base + international business expansion + full supply chain coverage + technology empowerment" [3]. - In the first three quarters of 2025, Ctrip reported revenue of 47 billion yuan, a 16% year-on-year increase, and adjusted operating profit of 13.29 billion yuan, up 11.5%, demonstrating strong resilience in a challenging consumption environment [3]. Revenue Structure - Revenue breakdown for Q1-Q3 2024 and 2025 shows growth in various segments, including accommodation bookings increasing from 16.4 billion yuan to 19.8 billion yuan, and other services from 3.4 billion yuan to 4.5 billion yuan [5]. Competitive Advantages - Ctrip's leadership in the industry is attributed to over 20 years of accumulated competitive advantages, creating barriers for new entrants [8]. - The brand and traffic barrier is significant, with Ctrip and Qunar occupying the top two positions in the domestic tourism service industry, maintaining a user repurchase rate above 60% [8]. - Ctrip has a robust supply chain covering over 750,000 hotels in China and 1.2 million hotels globally, providing a comprehensive one-stop service for diverse travel needs [8]. - The company has established a global presence through acquisitions like Skyscanner and Trip.com, enhancing its international business matrix [9]. - Continuous investment in AI technology has improved operational efficiency, with an adjusted EBITDA margin of 34.6% in Q3 2025, showcasing significant cost reduction and efficiency gains [11]. Industry Trends - Ctrip benefits from three core trends in the domestic consumption and tourism industry, including policy support for service consumption upgrades, steady growth in the domestic tourism market, and increasing OTA penetration rates [12]. - The domestic tourism market saw an 18% year-on-year increase in tourist numbers and an 11.5% increase in tourism revenue in the first three quarters of 2025 [12]. - OTA penetration reached 51.5% in 2024, with Ctrip capturing a significant share of the market as the industry consolidates [12]. Business Layout - Ctrip has diversified beyond a single travel booking platform, developing three core business segments that work synergistically to create a stable and growing profit structure [14]. - Domestic tourism remains the core profit base, with Ctrip and Qunar catering to a wide range of customer needs, contributing over 80% of total revenue in the first three quarters of 2025 [15]. - International tourism is emerging as a high-growth engine, with Q3 2025 bookings for inbound travel doubling compared to pre-pandemic levels [15]. - Ctrip's diversified service offerings, including vacation products and business travel management, enhance its revenue ecosystem [16]. Investment Outlook for 2026 - Ctrip presents a compelling investment opportunity due to its attractive valuation and strong growth prospects, with an adjusted P/E ratio around 20, indicating a historical low [18]. - Revenue growth for 2026 is projected at 15%-17%, driven by domestic business growth and international expansion, with net profit growth expected to reach 18%-20% [18]. - Long-term trends such as policy support and rising consumer income will continue to benefit Ctrip, positioning it as a key player in the recovery of the tourism sector [18][20].