We expect Tongcheng Travel’s revenue to return to growth as China relaxes its reopening policies, which should allow its citizens to travel with fewer restrictions. We expect near-term revenue to increase modestly, driven by recovery of the travel industry. Assuming no return of lockdown headwinds in China, we expect Tongcheng’s revenue to increase 10%-15% per year in the near to midterm.
Tongcheng has very low penetration of Tier 3 cities and has less than 30% saturation rate in its target market.
Reopening may not be as smooth as expected, leading to a prolonged slump in travel.
|
Metric
|
00780
|
03690
|
TCOM
|
|---|---|---|---|
Price/Earnings (Normalized) | 13.49 | 27.20 | 15.20 |
Price/Book Value | 1.80 | 4.14 | 1.72 |
Price/Sales | 2.71 | 2.29 | 4.84 |
Price/Cash Flow | 10.43 | 23.90 | 16.60 |
|
Metric
|
00780
|
03690
|
TCOM
|
|---|---|---|---|
Quick Ratio | 0.94 | 1.57 | 0.96 |
Current Ratio | 1.25 | 1.82 | 1.15 |
Interest Coverage | 12.72 | 10.27 | 5.21 |
|
Metric
|
00780
|
03690
|
TCOM
|
|---|---|---|---|
Return on Assets (Normalized) | 7.74% | 8.68% | 6.64% |
Return on Equity (Normalized) | 13.15% | 16.49% | 12.07% |
Return on Invested Capital (Normalized) | 11.10% | 11.89% | 8.43% |
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