In "The Big Banks," Citigroup: TONGCHENGTRAVEL is unlikely to benefit from the Ctrip antitrust investigation, maintaining a "Hold" rating

Citi published a research report stating that agency-style artificial intelligence surpassing online travel agencies (OTAs) and other trading platforms is quite common in the United States. However, due to the strict control of the supply chain by Chinese OTAs, this is not an imminent risk in the mainland. The bank expects that TONGCHENGTRAVEL (00780.HK) will play a more significant role in the revenue growth of its hotel management business by 2026. The bank maintains a target price of 22 yuan for TONGCHENGTRAVEL and continues to give it a "Hold" rating.

Regarding market concerns about the antitrust investigation of Ctrip (09961.HK), Citi believes that since TONGCHENGTRAVEL and Ctrip share hotel inventory in the domestic market, and 60% to 70% of hotel transaction volume in the same city comes from Ctrip's inventory, TONGCHENGTRAVEL will not benefit if Ctrip needs to give up hotel commissions and exclusive supply rights. If the relevant investigation of Ctrip comes to a conclusion, and the drivers of TONGCHENGTRAVEL's margin expansion become clearer and more sustainable, the bank may be more optimistic about TONGCHENGTRAVEL's prospects