News summary
Newsletter text
[UBS raises its target price for same-trip travel to HK$25, optimistic about its profit growth potential]
The latest report from UBS revealed that same-trip travel (00780arcadegamesdownload.HK) first-quarter results met expectations, demonstrating that the company's domestic tourism business remained solid even during periods of macroeconomic turmoilarcadegamesdownloadgrowth momentum. The agency remains optimistic about the long-term development of same-trip travel, believing that it will benefit from increased online travel penetration in low-tier cities, steady improvement in international business, and steady growth in long-term profit margins, while also having the potential to realize monetization in the international and hotel management fields through profit growth.
UBS pointed out that although same trip travel continues to invest in outbound travel, including efforts to increase user recognition and enhance supply chain capabilities, based on the role of operating leverage, it is expected that the profit margin of the company's core online travel platform will remain at 18.3 this year. A relatively stable level, which is only a slight decrease from last year's 18.5%. The agency also expects that with the improvement of operating efficiency and the expansion of the scale of high-profit outbound travel business, the company's profits will gradually improve in the next few years.
Based on this forecast, UBS raised its forecast for Tongcheng Travel's earnings per share this year and next by 1.8% and 1.6% respectively, and raised its target price from HK$24 to HK$25 while maintaining its buy rating.