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) | 17.93 | 58.42 | 19.65 |
Price/Book Value | 2.43 | 7.05 | 2.43 |
Price/Sales | 3.05 | 3.73 | 6.69 |
Price/Cash Flow | 14.66 | 24.47 | 23.37 |
|
Metric
|
00780
|
03690
|
TCOM
|
|---|---|---|---|
Quick Ratio | 0.96 | 1.54 | 1.11 |
Current Ratio | 1.32 | 1.81 | 1.32 |
Interest Coverage | 12.19 | 17.66 | 6.47 |
|
Metric
|
00780
|
03690
|
TCOM
|
|---|---|---|---|
Return on Assets (Normalized) | 5.30% | 7.14% | 7.28% |
Return on Equity (Normalized) | 9.51% | 13.40% | 13.38% |
Return on Invested Capital (Normalized) | 7.68% | 9.89% | 9.26% |
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