Morgan Stanley has released a research report indicating that TONGCHENGTRAVEL's fourth-quarter revenue exceeded the firm's expectations by 2%. Revenue from its core OTA business grew 17.5% year-on-year, aligning with market forecasts. The gross profit margin reached 65.9%, an improvement of 2.4 percentage points compared to the previous year, primarily driven by an increased contribution from the higher-margin accommodation business. Adjusted net profit was RMB 780 million, surpassing the bank's estimate by 6% and representing an 18% increase year-on-year. Despite a significant 23% rise in marketing expenses during the quarter, the net profit margin expanded by 0.5 percentage points annually. The company declared an annual dividend of HK$0.25 per share, a 39% increase from the previous year. Morgan Stanley maintained its "Overweight" rating and a target price of HK$29.

The report noted that, benefiting from robust domestic travel demand, TONGCHENGTRAVEL guided for mid-teens percentage growth in core OTA revenue by 2026, with the net profit margin expected to expand by approximately 0.5 percentage points. Regarding the ongoing regulatory scrutiny affecting peers, TONGCHENGTRAVEL believes the impact on its own hotel commission rates will be limited. This is because the hotels potentially affected are mostly high-end properties, while TONGCHENGTRAVEL's primary presence is in lower-tier cities, minimizing the effect on its price competitiveness.