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
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