Core views:
Ctrip Group announced 4Q23 results. (1) The company achieved revenue of 10.34 billion yuan in 2023Q4, up 24% year on year; gross margin increased by 5 pct to 81% year on year; non-GAAP net profit to mother was 2.68 billion yuan, profit margin 26%. (2) Revenue for the full year of 2023 was 44.56 billion yuan, up 25% year on year; gross margin increased 4.3 pct year over year to 81.8%; non-GAAP net profit to mother was 13.07 billion yuan, profit margin 29%.
According to the company's 4Q23 financial report, (1) 4Q23 lodging business revenue increased 131% year-on-year to 3.9 billion yuan, up 38% from 19Q4, accounting for 38% of revenue. The company's Q4 domestic hotel reservation volume increased 130% year over year. (2) 4Q23 transportation ticketing business revenue increased 86% year over year to 4.1 billion yuan, up 18% from 19Q4, accounting for 40% of revenue. (3) In 4Q23, tourism and vacation revenue increased 329% year-on-year to 700 million yuan, down 12% from 19Q4. (4) 4Q23 business travel service revenue increased 129% year-on-year to 600 million yuan, up 70% from 19Q4. Revenue from other businesses increased 42% year over year to 1 billion yuan.
The company emphasizes the increasing strategic position of OTA's global pure overseas business. According to the company's 4Q23 results conference, the total GMV of the company's 4Q23 overseas OTA brands increased by more than 70% year-on-year, and increased by more than 100% compared with 2019. The company aims to further expand its business scale and become a leader in the Asian and global markets within the next three to five years.
Profit forecast and investment advice: Ctrip Group's 2024-2026 revenue is estimated to be $527.618/72.5 billion, respectively, and non-GAAP net profit to mother is $134.8/17.50/ 20.58 billion yuan, respectively. Referring to comparable companies, we gave the company a 2024 23X PE valuation. The corresponding reasonable value for US stocks was $50.60/ADS, and the corresponding reasonable value for Hong Kong stocks was HK$395.82 per share. Both US stocks and Hong Kong stocks maintained a “buy” rating.
Risk warning: Competition in the domestic OTA industry is intensifying, affecting profit performance; supply recovery of cross-border cruise lines is slower than expected; macroeconomic weakness, consumer travel demand recovery is slower than expected, etc.