Summary of Tongcheng Travel Conference Call Company Overview - Company: Tongcheng Travel - Industry: Online Travel Agency (OTA) Key Points and Arguments 1. Strategic Partnerships: Tongcheng Travel has formed a strategic partnership with Ctrip to share resources, aiming for mutual benefits and expanding beyond traditional OTA business through acquisitions to deepen its presence in the entire tourism industry chain, including travel agencies and tavern companies, to create new growth curves [2][3] 2. Market Positioning: The OTA industry is characterized by a relatively healthy competitive landscape, with Ctrip focusing on mid-to-high-end markets, Meituan expanding into lower-tier local life services, and Tongcheng concentrating on lower-tier markets for long-distance travel. This differentiation allows companies to share market growth while maintaining good profit margins [2][6] 3. 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] 4. Acquisitions and Growth: Tongcheng Travel 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. The acquisition of Tongcheng Travel Industry is expected to accelerate product layout and capitalize on the recovery of outbound tourism [2][9] 5. 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. The estimated valuation for 2025 is approximately 14 times earnings [3][5] 6. Investment Opportunity: The current adjusted net profit for the year is projected at 3.3 billion yuan, with a price-to-earnings (PE) ratio of about 14 times, indicating that the current valuation is significantly undervalued relative to the company's growth rate. This presents a good investment opportunity for potential returns [5][10] Additional Important Insights 1. User Growth: The daily active users of Tongcheng'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] 2. Competitive Advantages: Tongcheng Travel's deep focus on lower-tier markets, combined with the support from major shareholders like Ctrip and Tencent, enhances its resource supply at low costs, making it a formidable player in the OTA space [8] 3. Profitability Improvement: The overall profitability of Tongcheng Travel is expected to improve as user marketing strategies are optimized and refined subsidy measures are implemented [9]
同程旅行 (1)