Citigroup has reiterated its "Buy" rating on TONGCHENGTRAVEL (00780) with a target price of HK$25.

This valuation is based on a forecast of 14 times non-IFRS earnings per share for 2026, representing a discount to the pre-pandemic historical average of 21 times, reflecting an anticipated slowdown in revenue growth.

Reports indicate that Tencent Holdings has begun testing a prototype of its AI agent within the WeChat application.

Given TONGCHENGTRAVEL's comprehensive "All-in-WeChat" strategy, the sophistication and breadth of its mini-program features, its relationship with Tencent, and its status as the sole online travel agency (OTA) service provider within the WeChat Wallet, the bank believes the company would be a primary beneficiary if Tencent launches an AI agent on WeChat.

The report states that TONGCHENGTRAVEL is confident AI will significantly enhance its platform through several key initiatives.

These include an AI assistant for recommending travel options and providing end-to-end planning, as well as AI-driven customer service.

Beyond its current collaboration with Tencent's "Yuanbao," the company is deepening its cooperation within the Tencent ecosystem while also deploying services on external AI platforms.