CMB International released a research report saying6500pennslammer3, maintaining the "Buy" rating of Tongcheng Travel (00780), Tongcheng's share price experienced short-term fluctuations due to some positive cash cashing after the May Day holiday. The bank believes that its benign correction provides potential buying points and is optimistic about medium-and long-term travel resilience demand, overseas business expansion, merger and acquisition coordination and profit release, with a target price of 266500pennslammer3.1 Hong Kong dollar.
According to the report, Tongcheng 1Q24 performed strongly, with revenue increasing by 50% year-on-year (3% higher than consensus expectations) and adjusted net profit increasing by 11% year-on-year to 559 million yuan (4% higher than consensus expectations). Looking forward to 2Q24E, we expect revenue to achieve a year-on-year growth of 49%, benefiting from the high travel boom during multiple holidays and the accelerated recovery of overseas business. 2Q24E's core OTA business is expected to grow by 23.5% year-on-year, of which accommodation/transportation/other revenue will increase by 12%/17%/92% year-on-year respectively. It is estimated that overseas business 2Q24E revenue will account for 3%-4%.