HSBC Research upgraded TONGCHENGTRAVEL's rating to "Buy" with a target price raised to 24 yuan

HSBC Research published a report, upgrading TONGCHENGTRAVEL (00780.HK) from "Hold" to "Buy," with a target price raised from HKD 21 to HKD 24, indicating that the profit margin in the next quarter exceeded expectations, benefiting from precise marketing and cost efficiency. The management reiterated its focus on OTA, which is expected to alleviate concerns.

The bank stated that due to TONGCHENGTRAVEL's better profit margin in the second quarter, it has raised its net profit forecast for 2025 to 2027 by 1% to 2%. At the same time, it expects core OTA revenue in the third quarter to grow by 13% year-on-year, with an adjusted core OTA operating profit margin of 31.5%, an increase of 0.4 percentage points year-on-year, and an adjusted net profit of RMB 1.03 billion. The bank's net profit forecast for TONGCHENGTRAVEL from 2025 to 2027 is 2% to 5% higher than market expectations