According to reports, China International Capital Corporation has issued a research note indicating that it is maintaining its revenue and profit forecasts for TONGCHENGTRAVEL (00780) for 2025 and 2026. The firm has reiterated its outperform rating and set a target price of HKD 28, which corresponds to a non-IFRS P/E ratio of 18x for 2025 and 15x for 2026, suggesting an upside potential of 28%. Currently, the company is trading at a P/E ratio of 14x for 2025 and 12x for 2026.

CICC’s key points are as follows: It predicts that the core OTA revenue will increase by 14% year-on-year in Q3 2025. The firm expects the group revenue to increase by 9% year-on-year to RMB 5.45 billion in Q3 2025; of this, the core OTA revenue is expected to grow by 14% to RMB 4.59 billion, with a projection of a Non-IFRS net profit of RMB 1.02 billion.

CICC maintains its judgment of a 14% increase in core OTA revenue for Q3: 1) Accommodation: The firm anticipates a rise of 10-15% in room nights for Q3 2025, with the proportion of room nights from three-star hotels steadily increasing. The platform’s Average Daily Rate (ADR) is expected to have a low single-digit increase year-on-year, while the commission rate remains flat, leading to an anticipated 14% increase in accommodation revenue. 2) Transportation: The Civil Aviation Administration has disclosed a 3% year-on-year increase in domestic passenger volume for Q3 2025. The firm expects the company's domestic ticket volume increase to be similar to the overall market. Benefiting from rapid growth in international ticket sales and improvements in transportation revenue realization rates, the firm projects a 9% increase in transportation revenue. 3) Other: Driven by growth in hotel management and PMS revenue, other revenue is expected to rise by 34% year-on-year.

CICC largely maintains the annual revenue and profit guidance for 2025, forecasting a robust domestic growth in accommodation and transportation segments within the core OTA business, with overseas contributions providing incremental growth. Within other business segments, hotel management maintains substantial growth, with a merger of Wanda Hotels expected to complete in Q4. The firm continues to anticipate a 15% increase in core OTA revenue for 2025 and projects a Non-IFRS net profit attributable to shareholders of RMB 3.3 billion for the company.