Company Coverage
Tongcheng Travel Holdings (780 HK): 2Q26: Solid Results; Better-than-feared 2H26 Outlook
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
HK$13.10
HK$18.00
37.4%
HK$21.00
Analyst
Highlights
- TT’s 2Q26 results are largely in line with expectations. Revenue grew 6.8%yoy to Rmb5.0b, broadly in line with our and street expectations. Adjustednet profit increased 9.8% yoy to Rmb851m, also in line with forecasts, whileadjusted net margin expanded 0.5ppt yoy to 17.1%, supported by grossmargin improvement and operating leverage. 3Q26 revenue is guided togrow 3-8% yoy, while adjusted net profit should come in at Rmb1.1b-1.15b.
- Maintain BUY with a lower target price of HK$18.00.
Analysis
- Resilient top-line growth despite transportation headwinds. Tongcheng Travel’s (TT) 2Q26 revenue increased 6.8% yoy to Rmb5.0b (1Q26:
+14.5%), with core OTA revenue rising 8.4% yoy to Rmb4.3b (1Q26: +14.7%). Transportation ticketing revenue declined 2.3% yoy to Rmb1.8b,
reflecting weaker ticketing demand amid higher airfares. Accommodation reservation revenue grew 8.0% yoy to Rmb1.5b, supported by stable growth= in both ADR and hotel room nights sold. Revenue from other businesses surged 35.7% yoy to Rmb1.0b, led by hotel management, advertising, valueadded services and attraction ticketing. Tourism revenue declined 2.9% yoy to Rmb642.8m, mainly due to weaker outbound package-tour demand amid geopolitical uncertainties and higher airfares.
- Operating metrics and margin performance. Average monthly active users rose 0.9% yoy to 253.9m and paying users deceased 6% yoy to 43.7m,
representing a paying ratio of 17.2% vs 18.4% in 2Q25. Gross profit margin edged up 1.7ppt yoy to 66.7% on improved cost efficiency. Despite gross margin expanding 1.7ppt yoy, adjusted operating margin remained broadly flat at 19%, as higher administrative expenses, including Rmb58m of one-off restructuring costs, offset the gains; excluding these, service development and G&A expenses would have accounted for 16.4% of revenue.
Highlights
- TT’s 2Q26 results are largely in line with expectations. Revenue grew 6.8%yoy to Rmb5.0b, broadly in line with our and street expectations. Adjustednet profit increased 9.8% yoy to Rmb851m, also in line with forecasts, whileadjusted net margin expanded 0.5ppt yoy to 17.1%, supported by grossmargin improvement and operating leverage. 3Q26 revenue is guided togrow 3-8% yoy, while adjusted net profit should come in at Rmb1.1b-1.15b.
- Maintain BUY with a lower target price of HK$18.00.
Analysis
- Resilient top-line growth despite transportation headwinds. Tongcheng Travel’s (TT) 2Q26 revenue increased 6.8% yoy to Rmb5.0b (1Q26:
+14.5%), with core OTA revenue rising 8.4% yoy to Rmb4.3b (1Q26: +14.7%). Transportation ticketing revenue declined 2.3% yoy to Rmb1.8b,
reflecting weaker ticketing demand amid higher airfares. Accommodation reservation revenue grew 8.0% yoy to Rmb1.5b, supported by stable growth= in both ADR and hotel room nights sold. Revenue from other businesses surged 35.7% yoy to Rmb1.0b, led by hotel management, advertising, valueadded services and attraction ticketing. Tourism revenue declined 2.9% yoy to Rmb642.8m, mainly due to weaker outbound package-tour demand amid geopolitical uncertainties and higher airfares.
- Operating metrics and margin performance. Average monthly active users rose 0.9% yoy to 253.9m and paying users deceased 6% yoy to 43.7m,
representing a paying ratio of 17.2% vs 18.4% in 2Q25. Gross profit margin edged up 1.7ppt yoy to 66.7% on improved cost efficiency. Despite gross margin expanding 1.7ppt yoy, adjusted operating margin remained broadly flat at 19%, as higher administrative expenses, including Rmb58m of one-off restructuring costs, offset the gains; excluding these, service development and G&A expenses would have accounted for 16.4% of revenue.
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
HK$13.10
HK$18.00
37.4%
HK$21.00
Analyst
IMPORTANT NOTICE - DISCLOSURES AND DISCLAIMERS
This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at this link, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
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