In a research report released by Pu Yin International, it is pointed out that the revenue of Tong Cheng Travel (00780.HK) in the second quarter will rise with the steady recovery of industry demand, and the company's revenue for the period is expected to increase by 48% YoY to 4.25 billion RMB, basically in line with expectations. Among them, the bank expects lodging revenue to grow by 14% YoY, transportation ticket revenue to increase by 16%, and vacation business revenue to reach 720 million RMB. Due to the lower profit margin of the vacation business and the company's increased investment in overseas business, the bank expects the second-quarter adjusted net profit to increase by 4.1% YoY to 620 million RMB, and the adjusted net profit margin to decrease by 6.2 percentage points to 14.5%. With the gradual reduction of the high base effect, it is expected that the core OTA of the company in the second half of the year will have a faster YoY growth rate than the first half of the year.

In addition, the bank pointed out that the demand for summer tourism remains strong, and it is believed that with the rapid improvement of the supply side, the average price of air tickets and hotels will decline YoY and gradually return to normal levels, which will help stimulate outbound travel demand and promote sustainable growth of the industry. Considering the recent changes in the average valuation of the industry, the group's target price is adjusted to 18 yuan, maintaining a "buy" rating.