＜Research＞UBS Drops TONGCHENGTRAVEL TP to $23, Expects 2Q Results Roughly In Line with Consensus

　　UBS issued a report on TONGCHENGTRAVEL (00780.HK) -0.560 (-3.825%) Short selling $15.70M; Ratio 18.066% , which was expected to report 2Q24 results broadly in line with consensus, with revenue from its core online travel business forecast to grow 20.9% YoY in the quarter and 23.8% for the full year, roughly in line. Recent industry data suggested that demand for travel remains resilient, with positive growth in transportation ticket bookings, yet price pressure has persisted since 2Q24.

　　Based on the brokers industry survey, average ADR of local hotels have maintained high single-digit YoY declines in recent weeks, but pricing pressures are likely to impact mid- to low-end hotels, leading to lower ADR for hotels on the TONGCHENGTRAVEL platform.

　　Looking ahead to 2H24, UBS believed that TONGCHENGTRAVEL will continue to outperform the travel sector, on the back of improving online penetration and diversifying revenue streams. The broker cut its EPS forecast for 2024 and 2025 by 8.7% and 7.1% respectively, and trimmed its TP from $25 to $23. It expected EPS to grow at a CAGR rate of 20.5% from 2023 to 2025, and maintained a Buy rating on the company.

　　(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-07-18 16:25.)