Summary of Tongcheng Travel Conference Call Company and Industry Overview - **Company**: Tongcheng Travel - **Industry**: Online Travel Agency (OTA) Key Points and Arguments - **Strategic Cooperation**: Tongcheng Travel has formed a strategic partnership with Ctrip to share resources, aiming for mutual benefits and expanding beyond traditional OTA operations through acquisitions to deepen its presence in the entire travel industry chain, including travel agencies and tavern companies, to create new growth curves [2][3] - **Market Positioning**: The OTA industry is characterized by a relatively healthy competitive landscape, with Ctrip focusing on the mid-to-high-end market, Meituan expanding into lower-tier local life services, and Tongcheng concentrating on long-distance travel in lower-tier markets, allowing for differentiated competition and shared market growth while maintaining good profit margins [2][6] - **Resource Coverage**: By the end of 2024, Tongcheng Travel aims to cover 720 airlines, 460,000 routes, and 3.9 million hotels, indicating a high entry barrier due to the extensive supply chain it is building [2][8] - **Acquisition Strategy**: The company is actively acquiring upstream core tourism resources to build a competitive tourism supply chain ecosystem, including the establishment of the Yilong Hotel Technology Platform and a diversified tavern brand matrix [2][9] - **Financial Projections**: Revenue projections for Tongcheng Travel from 2025 to 2027 are estimated at 19.7 billion, 22.7 billion, and 26 billion yuan, with adjusted net profits of 3.3 billion, 3.9 billion, and 4.6 billion yuan respectively, suggesting a valuation level of approximately 14 times for 2025 [3][5] - **Investment Opportunity**: The current adjusted net profit is projected at around 3.3 billion yuan, with a price-to-earnings (PE) ratio of about 14 times, indicating that the stock is undervalued relative to its growth rate, presenting a good investment opportunity for potential returns [5][10] Additional Important Insights - **User Growth**: The daily active users of the company's app are continuously increasing, indicating a strong user engagement and potential for future growth in the lower-tier market for long-distance travel [8] - **Profitability Improvement**: Overall profitability is expected to improve as user marketing strategies are optimized and refined subsidy measures are implemented [9]