【True Insight Hong Kong Stock Market Trends】Tongcheng Travel (00780.HK) maintained revenue growth in the third quarter of 2024, with continuous improvement in profitability.
China's leading integrated travel platform $TONGCHENGTRAVEL(00780.HK) Tongcheng Travel Holdings Limited (00780.HK) today announced its unaudited consolidated results for the three months ended September 30, 2024 ("the third quarter of 2024").
Third Quarter 2024 Performance Highlights with Year-on-Year Changes Quarterly Revenue and Adjusted Net Profit Reach Record Highs
Revenue increased by 51.3% to RMB 4,991.5 million, adjusted EBITDA increased by 51.6% to RMB 1,318.8 million, with an adjusted EBITDA margin of 26.4%. Adjusted net profit increased by 46.6% to RMB 910.0 million, with an adjusted net profit margin of 18.2%. Gross transaction value increased by 2.4% to RMB 72.8 billion. The large user base continues to see increased purchase frequency. Average annual paying users grew by 3.4%, reaching 232.4 million*. The cumulative number of services provided over 12 months increased by 19.9% to 1,882.5 million*, reflecting strong growth in user purchase frequency. Core online travel platform and international business are thriving. Core online travel platform business revenue increased by 21.6% to RMB 4,012.8 million.‣ Transportation ticketing service revenue increased by 20.6% to RMB 2,026.8 million, with international air ticket volume growing by over 110% year-on-year.‣ Accommodation booking service revenue increased by 22.2% to RMB 1,377.5 million, with international room nights growing by over 130% year-on-year. Core OTA business operating margin rose to 31.1%.
* For the 12 months ended September 30, 2024 .
1Mr. Ma Heping, Executive Director and CEO of Tongcheng Travel, said: "Driven by strong travel demand, the company achieved another outstanding performance in the third quarter of 2024, with both revenue and net profit reaching record highs. With effective customer acquisition strategies and exceptional operational capabilities, the Group continues to benefit from economies of scale and improved profitability. As China's tourism industry continues to grow in both domestic and outbound travel, the Group's domestic and international expansion strategies have yielded positive results. Leveraging our competitive advantages in execution and technology, we are committed to promoting industry development and creating a favorable environment for industry growth and our corporate progress."
Rooted in the Domestic Mass Tourism Market Cumulative Services Increased by Nearly 20% Year-on-Year
Tongcheng Travel, efficiency-oriented, leverages both online and offline channels to enhance user engagement and enrich its product and service offerings, covering domestic and outbound travel demand, continuously expanding its user base and increasing purchase frequency. In the third quarter of 2024, average annual paying users grew by 3.4%, reaching 232.4 million, while the cumulative number of services provided over 12 months increased by 19.9% to 1,882.5 million, reflecting strong growth in user purchase frequency. In the process of continuously expanding traffic acquisition through online and offline channels, the Group has particularly focused on improving operational efficiency, building key traffic scenarios such as the WeChat ecosystem, interest-based e-commerce, offline services, private domain ecosystems, manufacturer ecosystems, and tool ecosystems. The Group's proprietary applications continue to grow significantly, with daily active users reaching a record high before the National Day holiday. In the third quarter of 2024, average monthly paying users increased by 5.0% year-on-year to 46.4 million, also setting a new record. The Group has further consolidated its foothold in China's mass market. As of September 30, 2024, over 87% of the Group's registered users reside in non-tier-1 cities in China. In the three months ended September 30, 2024, approximately 71% of new paying users on the WeChat platform came from non-tier-1 cities in China.
Transportation and Accommodation Business Revenue Hit Record Highs Core OTA Business Operating Margin Shows Significant Growth
All segments under the Group's core online travel platform business recorded significant growth, with the overall core OTA business operating margin rising year-on-year to 31.1%. In the third quarter of 2024, driven by increased ticket volume and enhanced value-added products and services, transportation ticketing service revenue increased by 20.6% to RMB 2,026.8 million. Additionally, Tongcheng Travel continues to commit to providing users with more comprehensive travel solutions by improving its Huixing Smart Travel System, with the Group's train ticketing also achieving steady revenue growth. Tongcheng Travel's accommodation business also achieved outstanding results, with accommodation booking service revenue increasing by 22.2% to RMB 1,377.5 million. The Group remains focused on its target market, exploring various accommodation scenarios to capture growth opportunities, and continuously optimizing cross-selling strategies to better meet user needs. Other revenue under the Group's core online travel platform business also increased by 23.7% year-on-year to RMB 608.5 million.
Industrial Chain and Internationalization Strategies Yield Results Laying the Foundation for Future Development
As part of the strategic expansion of the travel industry chain, the Group's hotel management business has recorded rapid growth nationwide. As of the end of September 2024, the number of operating hotels has increased to over 2,100, with nearly 1,200 hotels under construction. Additionally, the Group has over 900 franchised travel agency stores nationwide. In the third quarter of 2024, against the backdrop of continued industry recovery, the Group's vacation business developed new revenue streams, recording revenue of RMB 978.7 million. In terms of internationalization, the Group's international air ticket volume reached a record high, growing by over 110% year-on-year, primarily due to the Group's strategic expansion of international products and price advantages. Tongcheng Travel's international room nights grew significantly by over 130% year-on-year, driven by the Group's continuous efforts to enrich hotel supply and innovative marketing campaigns targeting young travelers. 2 Additionally, the Group's new international online platform, HOPEGOO, is fully operational, offering booking services in six areas: flights, hotels, train tickets, tickets, boat tickets, and local experiences, supporting payments in 16 global currencies and multiple operating languages. Some brands under Tongcheng Travel's Yilong Hotel Technology platform have expanded to countries such as Japan, Malaysia, and Indonesia. These brands will provide global consumers with diversified, high-quality accommodation experiences.
Technological Innovation Enhances Efficiency, Supporting High-Quality Industry Development
Tongcheng Travel utilizes artificial intelligence technology to enhance operational efficiency. The Group's AI-driven customer service system plays a key role in improving operational efficiency and significantly reducing manual workloads for employees. Additionally, the Group has intensified efforts to improve its algorithm-driven Huixing System, aiming to provide users with more feasible and convenient travel options, especially for those with complex itineraries and lack of direct routes. In terms of industry development, the Group aims to revitalize the tourism industry by leveraging its extensive internet expertise and advanced technology to empower industry partners and enhance user experience. In the third quarter of 2024, Tongcheng Travel entered into strategic partnerships with Hainan Airport Group and Jilin Airport Group. Through these partnerships, the Group will assist in developing big data and marketing solutions. Additionally, the Group has developed customized air-rail intermodal technology for Nanning Airport to enhance its operational capabilities and efficiency.
Domestic Tourism as a Key Driver for Economic Growth
Entering the fourth quarter, the outlook for China's tourism industry remains optimistic, with consumers' enthusiasm for travel continuing to rise. Coupled with the Chinese government's recent series of economic support policies, which identify tourism as a major driver of national economic growth, consumer sentiment is further boosted. Driven by the continued recovery of international flights, relaxed visa policies, and growing consumer interest in exploring diverse and unique global destinations, the Group is confident about the prospects of China's outbound travel market. Looking ahead, Tongcheng Travel will prioritize enhancing user value by striving to improve products and services to elevate user experience and continually exceed their expectations. Additionally, the Group will consolidate its market position in the tourism industry while continuing to focus on expanding its outbound business to strengthen its global market influence. The Group will further develop its hotel management and vacation businesses, seeking investment opportunities aligned with strategic objectives to support future growth.
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