20260825-招银国际-同程旅行-00780.HK-Earnings_modestly_beat_extreme_weather_weighs_on_near-term_revenue_outlook_6页_1mb

Tongcheng Travel (780 HK) Summary

Core Content

Tongcheng Travel (TC) released its second-quarter 2026 financial results, reporting RMB5.0bn in revenue, a 6.8% YoY increase, which is broadly in line with estimates and 0.8% above Bloomberg consensus. Adjusted net profit (Adj. NP) reached RMB851mn, up 9.8% YoY, and 1.4% above estimate, 0.7% above consensus. The core OTA revenue grew 8.4% YoY, while the core OTA operating margin reached 26.4%, 0.4ppt above forecast.

The company remains cost-disciplined and continues to invest selectively in customer retention and user engagement. However, extreme weather disruptions during the summer peak travel season are expected to moderate near-term revenue growth. As a result, the analysts have lowered 2026E revenue and non-GAAP net profit forecasts by 1% and 4%, respectively.

Key Financials

Revenue

• 2Q26: RMB5.0bn (+6.8% YoY)
• FY26E: RMB20.8bn (+7.5% YoY)
• FY27E: RMB22.27bn (+6.8% YoY)
• FY28E: RMB23.36bn (+4.9% YoY)

Adjusted Net Profit

• 2Q26: RMB851mn (+9.8% YoY)
• FY26E: RMB3.7bn (+9.2% YoY)
• FY27E: RMB4.06bn
• FY28E: RMB4.367bn

Core OTA Revenue

• 2Q26: RMB4.3bn (87.1% of total revenue)
• FY26E: RMB14.194bn (+9.3% YoY)
• FY27E: RMB15.421bn
• FY28E: RMB16.226bn

Core OTA Operating Profit

• 2Q26: RMB1.1bn (+8.4% YoY)
• FY26E: RMB4.011bn
• FY27E: RMB4.495bn
• FY28E: RMB4.881bn

Core OTA Operating Margin

• 2Q26: 26.4% (up 0.4ppt from forecast)
• FY26E: 28.6%
• FY27E: 29.2%
• FY28E: 29.5%

Outlook

3Q26 Forecast

• Total Revenue: RMB5.8bn (+5.3% YoY)
• Core OTA Revenue: RMB4.3bn (+6.8% YoY)
• Tourism Revenue: RMB643mn (-2.5% YoY)
• Core OTA Operating Profit: RMB1.1bn (+3% YoY)
• Non-GAAP Net Profit: RMB1.13bn (+6.2% YoY)
• Core OTA Operating Margin: 30.0% (down 1.2ppt YoY)
• Non-GAAP Net Margin: 19.4%

2026E Forecast

• Core OTA Revenue Growth: 9.3% YoY (previously: 10.6%)
• Core OTA Operating Margin: 28.6% (previously: 29.0%)
• Group Revenue Growth: 7.5% YoY
• Group Non-GAAP Net Profit Growth: 9.2% YoY

Valuation

• Target Price (HK$): 23.70 (down 5% from previous TP of HK$25.00)
• 2026E Non-GAAP PE: 14x
• DCF-based Valuation (HK$): 23.70 per share
• P/E (Diluted): 7.3x (FY26E)
• P/B: 1.0x (FY26E)
• P/CFPS: 6.5x (FY26E)

Shareholding and Stock Data

• Market Cap (HK$): 31,408.6mn
• Avg 3 mths t/o (HK$): 174.8mn
• 52w High/Low (HK$): 25.32/11.99
• Total Issued Shares (mn): 2,397.6
• Shareholding Structure:
  • Tencent Holdings Ltd: 20.2%
  • Trip.com Group Ltd: 19.7%

Risk Factors

1. Greater-than-expected macro-economic headwinds
2. Slower-than-expected margin expansion
3. Consumption sentiment weaker than expected

Analyst Rating

• CMBIGM Rating: BUY
• Reasoning: Despite the challenges, travel demand remains resilient, and the company is expected to deliver 8%–9% YoY growth in core OTA operating profit and group-level non-GAAP net profit in 2026E.

Summary of Key Points

• TC's 2Q26 revenue and adjusted net profit modestly beat expectations, with core OTA performance stronger than forecast.
• Extreme weather is expected to hinder near-term growth, leading to revised forecasts for 2026E.
• The target price is HK$23.70, implying a 14x non-GAAP PE for FY26E.
• The analysts maintain a BUY rating, citing resilient travel demand and positive growth outlook.
• Share performance has been negative over the past 6 months, with a -40.8% decline.
• Valuation metrics are declining, with P/E at 7.3x for FY26E.
• Key risks include macroeconomic headwinds and margin pressures.