According to a research report released by Anxin International, maintaining the "buy" rating of Ctrip Group-S (09961), due to the record high domestic and outbound bookings of Ctrip during the May Day holiday, double-digit growth in domestic travel bookings, outbound air tickets and hotel bookings are more than 20% higher than in 2019, and revenue is expected to increase by 15% in the second quarter compared with the same period last year, of which accommodation booking / transportation ticketing revenue increased by 15%. The revenue forecast for 2024 will remain unchanged (52.7 billion yuan, an increase of 18% over the same period last year), and the annual adjusted net profit will be raised by 13% to 14.8 billion yuan (previous value: 13.1 billion yuan), with a corresponding profit margin of 28%.Arcade81.1%. Optimistic about the steady growth and efficiency optimization prospects of Ctrip's domestic business, and the medium-and long-term growth potential of outbound + international business, the target price has been raised to HK $519.
The main points of Anxin International are as follows:
Profit in the first quarter exceeded expectations:
The net income was 11.9 billion yuan, a year-on-year / month-on-month increase of 29% / 15%, slightly exceeding the bank / market expectation of 2% / 3%, of which accommodation booking / transportation ticket revenue increased by 29% / 20% year-on-year, and the contribution to net income was 38% / 42%. The adjusted net profit was 4.1 billion yuan, exceeding the bank / market expectation by 41% and 45%, mainly because the marketing efficiency was better than expected, the adjusted profit margin was 34%, and the year-on-year / month-on-month increase of 12 / 8 percentage points, benefiting from strong revenue growth and operational efficiency optimization.
Domestic air tickets and hotels maintain a higher growth rate than the industry, and users operate meticulously:
Domestic hotel and air ticket bookings increased by more than 20% in the first quarter compared with the same period last year (compared with the 17% increase in domestic tourism revenue and passenger trips in the first quarter). Domestic hotel ADR declined compared with the same period last year, affected by the industry trend, mainly due to the recovery of hotel supply, outbound tourism diversion and sinking market share. During the normal period of the tourism market, Ctrip strengthened the fine operation on the user side, launching "concert + hotel accommodation" package products for young users, and "Ctrip Friends Club" brand for silver-haired users (accounting for 10%).
Outbound travel maintains a rapid growth trend:
Outbound hotel and air ticket bookings increased by more than 100% in the first quarter compared with the same period last year, and outbound hotel and air ticket bookings during the Spring Festival and May Day holidays have fully returned to the level of the same period in 2019, and the recovery is still faster than that of the industry (civil aviation outbound passenger traffic returned to 78% of 1Q19 in the first quarter). Outbound ticket prices fell year-on-year due to the resumption of supply (estimated at-12%), but still increased by 15% over the same period in 2019.Arcade81ADR of outbound hotels is stable compared with the same period last year. The Ministry of Culture and Tourism predicts that outbound travel will return to 80% of 2019 by the end of 2024, and the company will guide that the degree of outbound travel recovery will exceed 20% and 30% of the industry.
The revenue and profit potential of the international OTA business still need to be released:
In the first quarter, the total revenue of Trip.com on the international OTA platform increased by about 80% compared with the same period last year, contributing about 10% to the total revenue, with the Asian market being the main region (revenue accounted for more than 70%). Future growth is mainly driven by: 1) the increase in cross-sales of air tickets and hotels (the proportion of hotel booking revenue has increased to 35%); 2) the continued release of inbound travel potential (inbound travel bookings increased by more than 4 times year-on-year in the first quarter, accounting for 20% of Trip.com revenue); and 3) one-stop booking services to get new customers and increase the frequency of orders. The realization rate of international business is basically the same as that of outbound travel, and the profit at the marginal income level (income minus variable cost) has been realized, and the future profit level depends on the scale effect.