Summary of Tongcheng Travel Holdings 3Q25 Earnings Call Company Overview - Company: Tongcheng Travel Holdings - Industry: Online Travel Agency (OTA) in Asia Pacific - Date of Earnings Call: November 25, 2025 Key Financial Results - 3Q25 Revenue: Revenue exceeded estimates by 1%, driven by a 15% growth in the core OTA business, outperforming peers in the domestic market [2][4] - Gross Profit Margin (GPM): Achieved 65.7%, 1 percentage point better than estimates due to a favorable mix shift towards core OTA [2][4] - Net Profit: Beat estimates by 3%, with a year-over-year margin improvement of 1 percentage point [2][4] M&A Activity - Wanda Hotel Management Acquisition: Closed in mid-October, expected to contribute approximately RMB 160-180 million in revenue and RMB 20 million in profit for 4Q25. This acquisition includes 239 hotels, primarily high-end in tier two or lower cities, and is seen as a future growth engine [3][4] 4Q25 Outlook - Revenue Growth Projection: Anticipated growth of 10-15% overall, with core OTA growth at 15-20%. Accommodations expected to be the main contributor with 12-17% revenue growth [4] - Transportation Revenue Growth: Projected at 6-11%, driven by improved take rates and value-added service (VAS) adoption [4] - Other Revenue Growth: Expected to accelerate to 45-50% due to M&A contributions [4] - Profit Guidance: Adjusted profit range for 4Q25 is RMB 720-780 million, with no change to full-year guidance [4] Long-term Projections - 2026 Revenue Growth: Management expects low to mid-teens organic core OTA revenue growth (13-18% including M&A) and a further 0.5 percentage point margin improvement [4] - Marketing Investments: Plans to increase marketing spending for emerging outbound business and its own app [4] Valuation Metrics - Current P/E Ratios: Trading at 13.6x for 2025 and 11.6x for 2026, considered attractive given the double-digit core OTA revenue growth and margin expansion [5] - Price Target: Set at HK$29.00, indicating a 34% upside from the current price of HK$21.62 [7] Risks and Considerations - Upside Risks: Strong pent-up demand and moderating competition in lower-tier cities could enhance margins [12] - Downside Risks: Softer macroeconomic growth in China and intensifying competition in lower-tier cities could impact performance [12] Additional Insights - Market Capitalization: Approximately RMB 45.203 billion [7] - Average Daily Trading Value: HK$253 million [7] - 52-Week Price Range: HK$24.90 - HK$17.02 [7] This summary encapsulates the key points from the earnings call, highlighting the company's performance, strategic initiatives, and market outlook.
同程旅行：2025 年第三季度业绩小幅超预期