Morningstar: Maintains fair value of TONGCHENGTRAVEL (00780) at 27 Hong Kong dollars. In the long term, the proportion of international tourism revenue will exceed 15%.

Morningstar released a research report stating that it maintains TONGCHENGTRAVEL (00780) fair value at 27 Hong Kong dollars. The company's third-quarter revenue increased by 10% year-on-year, mainly due to strong growth in accommodation bookings, with revenue meeting expectations; operating profit margin exceeded expectations by 100 basis points; core revenue grew by 15%. The bank believes that its international business and profit margin expansion are still catalysts for long-term growth. The bank expects that the number of room nights at Tongcheng Hotels will increase by 23%, reflecting strong demand. The group expects core business revenue to increase by 15-20% in the fourth quarter, including the additional revenue brought by the recent acquisition of Wanda. Excluding this acquisition, the bank still expects revenue to achieve double-digit growth. The monetization rate of international tourism is around 10-15%, higher than domestic low-star hotels (5%-6%), which may indicate an increase in future profit margins. The bank predicts that in the long term, the proportion of international tourism revenue will exceed 15%.