Citi issued a research report noting that the Ministry of Transport announced the national passenger throughput for the first 17 days of the Spring Festival travel period (February 2 to March 13), with total volume increasing by 4% year-on-year. Specifically, railway, civil aviation, road, and waterway traffic grew by 2.8%, 5.2%, 4%, and 18.4% respectively. During the first four days of the nine-day Lunar New Year holiday, performance was even stronger, with total volume growing by 6.8% year-on-year. Railway, civil aviation, road, and waterway traffic increased by 3.5%, 7.7%, 6.8%, and 26.9% respectively.
The bank believes that domestic passenger traffic data is broadly in line with expectations, with civil aviation and road transport outperforming the broader market. However, railway data appears relatively weak, potentially due to a higher base effect. Regarding outbound travel, the National Immigration Administration estimates that the average daily cross-border passenger flow during the nine-day holiday will reach 2.05 million people, an increase of 14.1% year-on-year. This remains to be observed, as the administration's pre-holiday forecasts tend to be overly optimistic and may be impacted by events in Japan.
The bank maintains its "Buy" ratings for Trip.com Group (TCOM.US) and Tongcheng Travel (00780.HK), assigning a target price of $82 for Trip.com’s ADRs and HK$28 for Tongcheng’s H-shares.
However, the bank believes it is unlikely that Trip.com's share price will fluctuate significantly due to the Spring Festival data, as the State Administration for Market Regulation is still conducting investigations. Trip.com will announce its financial results after the U.S. market closes on February 25.
