Investment Rating - The report assigns an "Outperform" rating to the company, indicating expected relative performance above the market benchmark over the next 12-18 months [3][12]. Core Insights - Domestic growth is stable while overseas growth continues to be high, with the company expanding its user share and influence. Adjusted net profit attributable to shareholders is projected to be RMB 31.86 billion, RMB 20.76 billion, and RMB 23.16 billion for the years 2025, 2026, and 2027 respectively [3][12]. - A valuation of 23x PE for 2026 is set, leading to a target market capitalization of RMB 476.4 billion, equivalent to HKD 523.3 billion, with a target price of HKD 733 [3][12]. Financial Summary - For Q3 2025, the company reported revenue of RMB 18.37 billion, a year-on-year increase of 15.52%. Adjusted EBITDA was RMB 6.35 billion, up 11.73%, and adjusted operating profit was RMB 6.13 billion, reflecting a 12.2% increase. Net profit attributable to shareholders surged to RMB 19.89 billion, a 194.01% increase, largely due to partial investment profit sales [3][13]. - The company’s revenue growth in transportation accelerated due to peak season and overseas demand, while hotel growth remained in double digits but showed signs of sequential slowdown. Group tours have seen a decline in growth since Q1 2025, attributed to a shift towards independent travel and regional risks [3][13]. Performance Metrics - The adjusted EBITDA margin is projected to be 30.5% in 2025, with a slight decline expected in subsequent years. The company has maintained stable profit margins despite increased competition in overseas markets [3][12][13]. - The report highlights that the company has increased its investment in Trip, leading to a rise in marketing expenses, which has contributed to rapid growth in overseas markets and an increase in user share [3][13].

Investment Rating - The report maintains a "Buy" rating for the company [6][11]. Core Insights - The company's revenue and profit have shown robust growth, driven primarily by hotel bookings and international business [11]. - The report highlights that the company's Q2 2025 performance exceeded expectations, benefiting from a stable competitive landscape and improved marketing efficiency [2][11]. - The company is projected to achieve adjusted net profits of 183.25 billion, 206.60 billion, and 227.21 billion RMB for the years 2025, 2026, and 2027 respectively [11]. Financial Summary - Revenue (in million RMB) is forecasted to grow from 44,562 in 2023 to 78,490 in 2027, reflecting a compound annual growth rate (CAGR) of approximately 12.28% [4]. - Adjusted net profit is expected to increase from 13,071 in 2023 to 22,721 in 2027, with a significant growth of 910.12% in 2023 [4]. - Adjusted EBITDA is projected to rise from 13,975 in 2023 to 23,342 in 2027, indicating a steady increase in profitability [4]. Performance Highlights - In Q2 2025, the company achieved a revenue of 14.864 billion RMB, representing a year-on-year growth of 16.23%, and a net profit of 4.864 billion RMB, up 26.4% [11]. - The breakdown of revenue sources shows hotel bookings growing by 21.2%, transportation tickets by 10.8%, and group tours by 5.3% [11]. - The company has maintained a stable profit margin, with adjusted EBITDA margin projected at 29.6% for 2025 [4][11]. Market Position - The company is positioned to outperform its competitors, with a target market capitalization of 476.4 billion RMB, translating to a target price of 731 HKD per share [11]. - The report notes that the company's market share is increasing, particularly in the hotel sector, despite a relatively stable performance in outbound travel [11].