Anxin International said that due to the low year-on-year base effect in January, it is expected that Ctrip Group-S (09961) will continue to show impressive year-on-year growth in the first quarter results.
The Zhitong Finance App learned that Anxin International released a research report stating that it maintained the Ctrip Group-S (09961) “buy” rating, raised the target price to HK$437, purchased ADS of US$224 million from September 2023 to now, and announced a US$300 million shareholder reward plan (repurchase/cash dividend, etc.) to provide additional support for stock prices. Ctrip's domestic hotel reservations/air ticket reservations during the Spring Festival holiday increased by 60%/50% year-on-year, and outbound hotel and air ticket reservations surpassed 2019 levels. In view of the low year-on-year base effect in January, it is expected that the year-on-year growth rate of the first quarter results will still be impressive. The company's performance in 2024 is expected to take advantage of Dongfeng in the domestic tourism year and overseas expansion, and large-scale model and content marketing are expected to continue to optimize costs.
Anxin International's main views are as follows:
The fourth quarter results continued to recover strongly, and profits greatly exceeded expectations due to optimized marketing efficiency:
Total revenue was 10.3 billion yuan, up 105%/24% year over year in 19Q4, in line with market expectations. Among them, accommodation reservation/transportation ticketing revenue accounted for 38%/43%, up 131%/86% year on year, and 32%/18% over 19Q4, continuing the strong recovery trend in the previous 3 quarters. The adjusted net profit was 2.7 billion yuan, which greatly exceeded market expectations of 1.6 billion yuan (70% higher), and the profit margin was 26%. It exceeded expectations due to improved marketing efficiency, and benefited from increased conversion rates, cross-selling rates, content strategies, etc.
The transaction volume for the full year of 2023 reached a record high, ranking first in the world:
In 2023, the GMV of the core OTA business reached a record high of 1.1 trillion yuan (160 billion US dollars), an increase of 130% over the previous year, and an increase of nearly 30% over 2019 (865 billion yuan), reflecting steady business expansion. Compared with the overseas OTA platform GMV during the same period, Booking was US$150.3 billion (agencies agreed expectations) and Expedia was US$104.1 billion (actual value). The company was in the first tier of GMV in the world, benefiting from domestic tourism recovery and global market business expansion.
Accommodation+transportation continued to grow steadily compared to 2019, and tourist vacations are in the process of recovery:
Judging from business data, 1) Domestic: Domestic hotel reservations increased 130% year on year in the fourth quarter, 100%/170%/90% year on year compared to the 1/2/3 quarter, and 60% increase from 19Q4. 2) Departure: Outbound hotel and air ticket reservations resumed in the fourth quarter to 80% + in the same period in 2019, in line with the recovery progress during the peak summer season in the 2nd and 3rd quarters. Compared with the recovery of international passenger traffic of civil aviation, it recovered to 57% (Civil Aviation Administration). 3) Travel and vacation: Revenue recovered to 88% in the fourth quarter, the number of partner merchants increased 54% throughout the year, and GMV increased more than 3 times over the same period last year.
The international business layout is accelerating:
The GMV of the international OTA platform Trip.com increased by more than 70% year-on-year in the fourth quarter, up 100% + over the same period in 2019, benefiting from increased product supply richness, increased marketing investment, and Skyscanner traffic conversion. Currently, Trip.com covers 39 countries/regions, with user mentality and market share in the Asia-Pacific region (Hong Kong, Singapore, Japan, South Korea, Thailand, etc.) continuing to increase. The company indicates that the compound annual growth rate of Trip.com's revenue over the next 3-5 years will be high in double digits, accounting for 15% to 20%. Profit inflection points may appear as scale effects appear.
Risk: Weak domestic spending power or impact on travel spending; international business overseas giants compete fiercely.