Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected relative price increase of over 20% compared to the market benchmark within the next six months [19]. Core Insights - The company has demonstrated robust growth in its core OTA revenue and adjusted net profit, with Q4 2025 revenue reaching 4.84 billion yuan, a 14.2% increase year-on-year, and core OTA revenue at 4.06 billion yuan, up 17.5% [3][5]. - The adjusted net profit for Q4 2025 was 780 million yuan, reflecting an 18.1% year-on-year growth, while the full-year revenue for 2025 was 19.4 billion yuan, marking an 11.9% increase [3][5]. - The company is positioned as a leading OTA in the lower-tier market, benefiting from strong backing by Tencent and Ctrip, which enhances its competitive advantage in domestic and international markets [7]. Financial Performance - In Q4 2025, the core OTA operating profit was 1.15 billion yuan, with an operating profit margin (OPM) of 28.4%, remaining stable year-on-year [5]. - The traffic business generated 1.84 billion yuan in revenue, a 6.5% increase, while accommodation revenue reached 1.31 billion yuan, up 15.4% [5]. - The company achieved a record high in annual service users, with 250 million paid users, a 6.0% increase year-on-year, and total service instances reaching 2.03 billion, a 5.5% increase [6]. Profit Forecast and Valuation - The company is expected to see continued profit improvement, with projected net profits for 2026, 2027, and 2028 at 3.3 billion, 4.0 billion, and 4.7 billion yuan respectively, corresponding to P/E ratios of 12, 10, and 8 times [7]. - The forecasted revenue growth rates for the upcoming years are 12.9% for 2026, 11.7% for 2027, and 10.8% for 2028, indicating a stable growth trajectory [13].

Core Viewpoint - UBS forecasts that Tongcheng Travel's core OTA revenue will continue to grow steadily in Q3, with a year-on-year increase of 14%, approaching the previous guidance range of 10-15% [1] Group 1: Revenue Growth - The travel demand during the National Day holiday has become normalized, and UBS believes that Tongcheng's hotel revenue will remain resilient, predicting accommodation revenue growth close to mid-teens level [1] - In terms of transportation business, UBS predicts that Tongcheng's revenue in Q3 will record high single-digit growth year-on-year [1] Group 2: Target Price and Rating - UBS has raised its target price for Tongcheng Travel from HKD 25.5 to HKD 26.5 and maintains a "Buy" rating [1]