New Stock Preview | Livelihood Group submits application again: Annual revenue exceeds 600 million, growth troubles still exist behind the "travel fever".

In the tourism market, there has always been a "crowded" effect domestically, and this also reveals the considerable development prospects of this industry. According to Frost & Sullivan data, as the economy continues to grow steadily and residents' income levels rise, future tourism demand will continue to increase. It is estimated that the total revenue of the tourism market will increase from RMB 6.4 trillion in 2024 to RMB 12.8 trillion in 2029, with a compound annual growth rate of 14.9% during that period. Behind the continuous intensification of travel, it is evident that related companies have confidence to sprint into the secondary market. On April 30th, the travel service platform, Vitality Group, from Shenzhen, once again submitted its listing prospectus to the Hong Kong Stock Exchange, planning to list on the Main Board of Hong Kong, with CMSC International and CMBC CAPITAL as joint sponsors. The company was founded in 2009, initially starting with the flight information application "Flight Butler", and later launching "High-speed Rail Butler", gradually developing into a one-stop comprehensive travel platform covering the entire travel chain from pre-travel, during travel, to post-travel. The company differs from traditional mobile platforms, mainly acting as a transaction intermediary between passengers and companies, seamlessly integrating various modes of transportation including airplane, train, and online car services. In 2017, Vitality Group was listed on the New Third Board as "Vitality Tianhui", and then officially delisted on February 18, 2021, shifting to the more internationally influential Hong Kong stock market. On October 29, 2024, Vitality Group submitted its first listing application to the Hong Kong Stock Exchange, but it was not successful due to invalid materials. So, behind this Hong Kong listing, what kind of "growth story" will impress investors for Vitality Group? Annual revenue exceeding 6 billion, but profits fluctuate As consumer upgrades accelerate and people's awareness of travel continues to strengthen, Vitality Group has gradually become an "upstream player" in the industry. According to Frost & Sullivan data, in 2024, the company ranked 8th in the national GMV among comprehensive travel service platforms, with a GMV of RMB 40.5 billion and a market share of 1.4%. Among them, the online flight ticket transactions were 25.7 billion yuan, ranking 5th in the country, accounting for 1.9%; and the online train ticket transactions were 14.5 billion yuan, ranking 3rd in the country, accounting for 2.4%. As of December 31, 2024, Vitality Group's services cover over 220 countries and regions, over 5,100 airports, over 3,500 domestic train stations, and provide booking options for over 800,000 hotels worldwide. At the same time, the registered user base of the company's platforms has exceeded 197 million, increasing by 42.6% since January 1, 2022. Furthermore, the company's paying users exhibit a high level of stickiness: according to the prospectus data, over 50% of Vitality Group's paying users in 2023 paid for the company's services again in 2024, compared to the industry average of about 40%, ranking among the highest levels on major platforms in China. In 2024, the majority of the paying users (over 30%) in the companys user group were frequent travelers who booked tickets on our platform at least once per quarter. It can be expected that with the steady increase in user data and the gradual improvement of market position, the revenue scale of Vitality Group will continue to expand. According to the prospectus data, from 2022 to 2024, Vitality Group achieved revenues of RMB 280 million, RMB 502 million, and RMB 647 million, with a compound annual growth rate of 52%, maintaining a high growth level. Looking at the revenue structure, the company's revenue mainly consists of three main sectors: travel-related services, online marketing services, and data and technology services. Among them, the travel-related services sector is the main pillar of the company, accounting for over 85% of revenue. In 2024, the company's travel-related services, online marketing services, data and technology services achieved revenues of 551 million yuan, 75 million yuan, and 21 million yuan, respectively, with year-on-year growth rates of 24.7%, 82.8%, and 16.67%, jointly driving the overall revenue growth scale of the company. However, it should be noted that although revenue has maintained a good growth rate, the actual profitability of the company has been fluctuating - from 2022 to 2024, the net profit of Vitality Group was 758 thousand yuan, 59.309 million yuan, and 51.152 million yuan, respectively; and the adjusted net profit (measured by non-Hong Kong financial reporting standards) was -67 thousand yuan, 61.642 million yuan, and 73.449 million yuan. In addition, the company's high level of debt may add a hint of "cloudiness" to its fundamentals. As of December 31, 2024, the company's total assets were 892 million yuan, cash and cash equivalents were approximately 468 million yuan, while total liabilities were as high as 420 million yuan, a year-on-year increase of 48.94%. Market size may exceed 10 trillion vs. inevitable development pressure It is well known that China's tourism market is a diversified market, including transportation, accommodation, sightseeing, dining, shopping, and other tourist activities. Among these, transportation is obviously an indispensable and important component. According to Frost & Sullivan data, with the significant increase in the public's travel demand, the comprehensive Internet travel service market in China has maintained a high growth rate and continued expansion in recent years. The market size has increased from RMB 670 billion in 2019 to RMB 992.2 billion in 2024, with a compound annual growth rate of 8.2%. It is expected that by 2029, the revenue of China's comprehensive Internet travel service market will reach RMB 1.7 trillion, with a compound annual growth rate of 11.7% from 2024 to 2029. Among them, the revenue of China's online travel booking market is expected to reach RMB 1.4 trillion, with a compound annual growth rate of 10.6% from 2024 to 2029. In this regard, Vitality Group, through deep binding in vertical scenarios, focusing on the "railway + aviation" vertical field, has a strong core competitive advantage in the industry. On the one hand, in the segmented field, Vitality Group has considerable market influence, ranking third in the online train ticket booking market (market share of about 2.4%) and fifth in the online flight ticket booking market (market share of about 1.9%)On the other hand, the user stickiness and repurchase rate of the product are relatively high. The repurchase rate of paying users exceeds 60%, and the ratio of paying users to monthly active users is 25.2%, higher than the industry average of 20%, showing a high level of user loyalty.However, even so, Vitality Group is also facing inevitable development pressure in the comprehensive Internet travel service track in China. Firstly, the market is highly concentrated, and ecological competition is significantly intensifying. The online travel market in China shows a clear oligopoly pattern, with the top three platforms (Ctrip, Meituan, Fliggy) collectively holding 88.2% of the market share, with Ctrip alone dominating (31.6%), while Vitality Group ranks eighth with a share of about 1.4%. The industry has shifted from single-ticket services to full-chain ecological competition, with leading companies integrating accommodation, transportation, local life, and other services to build a closed-loop ecosystem, squeezing the survival space of small and medium players. Secondly, the upgrading of user demand and technological changes driven by technology have also increased the company's development pressure. Users are demanding increased travel efficiency and intelligent experiences, while AI technology and big data analysis have become key to competition. For example, Ctrip is focusing on live broadcasting and community engagement, Meituan is integrating local life services, while Vitality Group is still mainly focused on utility, facing pressure from technological and service model iterations. In addition, official platforms (such as 12306) launching "waiting ticket purchase" functions have weakened the market space for third-party ticket-grabbing tools; meanwhile, user privacy and data compliance requirements are becoming stricter, with Vitality Group once being named by regulators for "excessive data access". In conclusion, Vitality Group has certain competitive advantages in terms of data density, user accumulation, and market share in the vertical field. However, the limitations of its utility-type platform put it in a passive position in ecological competition. Facing pressure from giants, whether it can achieve a second growth curve through technological upgrades, international expansion, and ecological cooperation will be the focus of the capital market after its Hong Kong IPO.