Lyon: Tongcheng Travel (00780) OTA business grew 15% in the third quarter, with a target price raised to HK$22.

Lyon released a research report stating that it is expected that TONGCHENGTRAVEL (00780) will see a year-on-year growth of 15% in the third quarter of its core online travel platform (OTA) business, reaching 4.6 billion RMB. The adjusted net profit is expected to reach 1.03 billion RMB, with a profit margin of 19%. It is anticipated that the revenue from the accommodation business and transportation ticketing business will increase by 14% and 10% respectively. The bank has raised its adjusted net profit forecast due to improved sales and marketing efficiency; the target price has been raised from 20 Hong Kong dollars to 22 Hong Kong dollars, and the "buy" rating has been maintained. In addition, Tongcheng's performance during the National Day holiday met internal expectations. The bank believes that the performance of outbound tourism during the peak season in the fourth quarter will be crucial to the group's growth prospects for 2026. The group recently announced the completion of the acquisition of WANDA HOTEL DEV (00169), and the bank believes that as the group still needs time to establish a development strategy, with only two months left this year, the impact of the acquisition on this year's financial performance is limited. However, the bank believes that the acquisition will enhance the brand value of the group's existing hotel management business and increase earnings per share.