- RE-ITEREATE Buy Entry – 15.5 Target – 17.5 Stop Loss – 14.5
- Tongcheng Travel Holdings Ltd, formerly Tongcheng-Elong Holdings Ltd, is a China-based holding company mainly providing online tourism products and services. The Company is mainly engaged in transportation ticketing services, accommodation reservation services and other services. The transportation ticketing services mainly include air ticket and train ticket booking, sales of tourism insurance and other transportation related services. The accommodation reservation services mainly provide accommodation booking services. Other services mainly include attraction ticketing, ancillary value-added user services and advertising services.
- Resumption of inter-provincial group tours. At the beginning of June, more than ten Chinese localities moved to restart inter-provincial group tours, after the Ministry of Culture and Tourism (MCT) announced more targeted anti-epidemic measures in an effort to boost tourism. Accordingly, the tourism sector picked up during the three-day Dragon Boat Festival holiday.
- Promising outlook of the upcoming summer holiday. According to the 2022 Summer Vacation Trend Forecast issued by Trip.com, as of 10th June, the air ticket bookings for summer vacation jumped by 162% WoW, tour group bookings jumped by 109% WoW, and hotel bookings jumped by more than 50% WoW. Meanwhile, the overall visitor traffic is expected to recover to 70% of the 2019 level during the same period.
- 1Q22 financials and operations review. Revenue grew by 6.5% YoY to RMB1.72bn. Adjusted net profit dropped by 18% YoY to RMB298.9mn. Average MAUs grew by 4.5% YoY to 234.2mn. Average MPUs grew by 16.1% YoY to 27.3mn.
- The updated market consensus of the EPS growth in FY22/23 is 21.2%/63.8% YoY, respectively, translating to 34.1×/20.8x forward PE. The current PER is 46.0x. Bloomberg consensus average 12-month target price is HK$17.22.