CICC International: Raises TONGCHENGTRAVEL (00780) target price to 25.9 Hong Kong dollars, maintains "outperform" rating.

Bank of China International released a research report stating that it has raised the target price of TONGCHENGTRAVEL (00780) from 23.7 Hong Kong dollars to 25.9 Hong Kong dollars, an increase of 9%, and maintained a "outperform" rating. Before the announcement of the financial results, the bank maintained its adjusted profit forecast for TONGCHENGTRAVEL in the second quarter of 2025 largely unchanged. It is currently expected that core OTA revenue will increase by 13% year-on-year, and adjusted net profit will increase by 14% to 750 million RMB, with a profit margin of 16.2%, an increase of 0.8 percentage points year-on-year. The bank stated that the key challenge lies in supply chain construction, with limited competition risk expected and TONGCHENGTRAVEL's hotel commission rate expected to remain stable in the short term. The bank expects that, given the high base number, the growth of airline ticket sales will slow to low single digits, but the increase in commission rates will help offset this gap and may help alleviate the impact on sales.