Morningstar issued a research report maintaining TONGCHENGTRAVEL's (00780) fair value at HK$27. The company's Q3 revenue grew 10% YoY, primarily driven by strong growth in accommodation bookings, meeting expectations. Operating margin exceeded the bank's forecast by 100 basis points, while core revenue rose 15%. The report highlights international business and margin expansion as long-term growth catalysts.

Morningstar projects a 23% increase in TONGCHENGTRAVEL's hotel room nights, reflecting robust demand. The group expects Q4 core business revenue to grow 15-20%, including incremental revenue from the recent acquisition of Wanda. Excluding this acquisition, the bank still anticipates double-digit growth.

International tourism's monetization rate stands at 10-15%, higher than domestic low-tier hotels (5-6%), suggesting potential margin improvement. Morningstar forecasts that international tourism revenue will surpass 15% of total revenue in the long run.