稳健的二月业绩；核心远程升级收入增长按计划进行

Solid 2Q results; core OTA earnings growth ontrack Target PriceHK$24.00Up/Downside22.1%Current PriceHK$19.66 Tongcheng Travel (TC) reported2Q25 results: total revenue was RMB4.7bn, up10% YoY, and was1% better thanbothour forecastandBloomberg consensusestimates; adjusted NP was RMB775mn, up18% YoY, and was5/3% betterthan our forecast/consensus, driven by better-than-expected operating leverageof core OTA business. OPM of the core OTA business expanded to26.7% in2Q25 (2Q24:24.3%), 1.2ppts ahead of our forecast.Our 2025-2027E revenueforecastsremainlargely unchanged, while weliftnon-GAAP net profit forecastsby 1-2% to factor in better-than-expectedunleashing of operating leverage.Followingtheresultsannouncement, weremain positive that TC will deliver solidcorebusinessearningsgrowth, andweareanticipating24.3/22.1% YoY growth(was 24.0/20.0%)fromcore OTA OP/total non-GAAP NP in 2025E. Our DCF-based TP remains unchanged at HK$24.0, translating into 15.1x 2025E PE(non-GAAP). Maintain BUY. China Internet Saiyi HE, CFA(852)3916 1739hesaiyi@cmbi.com.hk Ye TAO, CFAfranktao@cmbi.com.hk Wentao LU, CFAluwentao@cmbi.com.hk Core OTA business revenue growthlargelyinline with expectation.In2Q25, TC’s core OTA businessrevenuereached RMB4.0bn (85.8% of totalrevenue), up13.7% YoY (1Q25:18.4% YoY), and was0.6% ahead ofconsensusdrivenbybetter-than-expectedrevenuegrowthinaccommodationreservation servicesandothers. In2Q25, transportationticketingservices/accommodation reservation services/other revenueachieved YoY growth of7.9%/15.2%/27.5% (1Q25:15.2/23.3/20.0%). Thenumber of12-month accumulatednumber of travellers served reached2.0bn byend-Jun, up7.2% YoY, compared to annual paying users (APU)increase of10.2% YoY duringthe same period. Joanna Ma(852) 3761 8838joannama@cmbi.com.hk Stock Data 3Q25 outlook:anticipating largely stable YoY revenue growth onsequential basis.For3Q25E, we estimate TC to ink total revenue ofRMB5.5bn, up9.5% YoY, driven by14.0% YoY revenuegrowthofcore OTAsegment, but offset by a9.5% YoY decline in Tourism revenue. Within thecore OTA business, we are looking for8/15/33% YoY revenue growth fortransportation ticketing/accommodation reservation (AR)/other business.Thetremendousrevenue growth for AR could be driven bythesolidgrowthin hotel room nights, in our view.Meanwhile, weare of the view thattheacceleration in YoY growth ofotherrevenue will be driven by robust growthof hotel management business, whilethegrowth of transportation ticketingbusiness shouldstay at a healthy pace. Expecting a stableOPMfor core OTAbusinessYoY for 3Q25E on highbase.TC’s overall OPM reached17.3% in2Q25, up from12.2% in2Q24,among which OPM of core OTA business improved to26.7% (2Q24:24.3%), thanks tosolidrevenue growth which helped unleash operatingleverage, as well as efficient marketingspending.WeforecastOPM ofcoreOTA toremain stable YoY at 31.1%in3Q25E,as TC faces high base andexpectsto slightly increase marketingspendingin a peak summer season.Fornon-GAAP net profit, we are anticipating 12% YoY growth to RMB1.0bndriven by revenuegrowth,translating into 18.7% non-GAAP net margin(2Q24: 18.2%). Source: FactSet Ourforecasts on2025-2027E revenueremainlargely unchanged, while weliftnon-GAAPnet profit forecastsby 1-2% to factor in better-than-expectedunleashing of operatingleverage. Disclosures& Disclaimers Analyst CertificationThe research analyst who is primary responsible for the content of this research report, in whole or in part, certifies thatwith respect to the securities or issuer that the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about the subject securities or issuer; and (2)no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in this report.Besides, the analyst confirms that neither the analyst nor his/her associates (as defined in the code of conduct issued by The Hong Kong Securities and Futures Commission) (1) have dealt in or traded in the stock(s) covered in this research report within 30 calendar days prior to the date of issue of this report; (2) willdeal in or trade in the stock(s) covered in this research report 3 business days after the date of issue of this report; (3)serve as an officer of any of the HongKong listed companies covered in this report; and (4) have any financial interests in the Hong Kong listed companies covered in this report. CMBIGM RatingsBUY : Stock with potential return of over 15% over next 12 monthsHOLD: Stock with potential return of +15% to-10% over next 12 monthsSELL: Stock with potential loss of over 10% over next 12 monthsNOT RATED: Stock is not rated byCMBIGM :Industry expected to outperform the relevant broad market benchmark over next 12 months:Industry expected to perform in-line with the relevant broad market benchmark over next 12 months:Industry expected to underperform the relevant broad market benchmark over ne