unrealengineblockchain| Essence International: Give Tongcheng Travel a buy rating target price of HK$23.3

Anxin International released a research report sayingUnrealengineblockchainWith a "buy" rating of the same trip (00780), the first-quarter results slightly exceeded expectations. It is considered that the release of the user value of the platform will support the core OTA business to maintain a higher growth prospect than the tourism industry, with a target price of 23.Unrealengineblockchain.3 Hong Kong dollars The bank expects revenue to rise 50 per cent year-on-year in the second quarter, and core OTA to rise 24 per cent year-on-year, with year-on-year growth in transportation ticketing / accommodation booking slowing to 18 per cent and 12 per cent on a year-on-year basis, and the holiday business is expected to rise 12 per cent month-on-month. In addition, the revenue forecast for 2024 will be slightly raised by 3%, leaving the adjusted net profit forecast for the whole year unchanged (2.7 billion yuan, corresponding to a profit margin of 14.9%).

The main points of Anxin International are as follows:

Results for the first quarter slightly exceeded expectations:

The total revenue was 3.87 billion yuan, an increase of 49% over the same period last year, slightly exceeding the bank / market expectation of 4%, 3%, of which the revenue from the core OTA business increased by 24% year-on-year (of which the transportation ticketing / accommodation booking service increased by 26% and 16%), and the holiday business contributed a revenue increase of 660 million yuan (total revenue accounted for 17%) since the beginning of the full quarter of 1Q24. The adjusted net profit was 560 million yuan, an increase of 11% over the same period last year, slightly exceeding market expectations of 4%, and a profit margin of 14.4%. In the first quarter, the core OTA's operating profit was 720 million yuan, with an operating profit margin of 22.6%; the operating profit of the holiday business was 44 million yuan, with an operating profit margin of 6.6%.

Core OTA business is robust and international layout is accelerated:

Overall GMV rose 15 per cent to 65.9 billion yuan in the first quarter compared with the same period last year, mainly driven by the increase in ticketing and accommodation bookings. 1) accommodation booking: the night volume between domestic hotels has increased by about 10% compared with the same period last year. The 15-day cross-selling rate has increased to 11%. 2) Transportation ticketing: domestic air ticket bookings increased by about 30% in the first quarter compared with the same period last year (a record high), and air ticket bookings during the May Day holiday increased by 20% compared with the same period last year, with a steady growth trend continuing to the second quarter. 3) International business: night volume / air ticket bookings in international hotels increased by more than 150% over the same period last year, while Southeast Asia, Japan and South Korea contributed the main bookings. The company aims to increase the proportion of outbound + international business income to more than 10% in the next 3-5 years.

The vacation business has the value of exploring the industrial chain:

In the first quarter, the domestic / outbound business of the same travel industry returned to 70% of the same period in 2019. It is expected that the visa-free policy and the resumption of flight supply will lead to the resumption of outbound tourism. The medium-and long-term operating profit margin of the holiday business is expected to be in the low and middle digits, which will have a downward impact on the company's overall profit margin. We believe that the value of holiday business layout is mainly reflected in: differentiated customer base expansion, offline channel construction, and the improvement of supply chain control capacity.

User value continues to be released, and the construction of multiple channels is promoted:

APU rose 14 per cent year-on-year (a net increase of 29 million) to 230 million, while MPU rose 3 per cent to 43 million. In addition to the ecology of Wechat, the DAU of independent App on the same trip exceeded 2 million, and MPU increased by more than 100% over the same period last year. The release of user value is reflected in the increase in the frequency of orders and annual expenses. The total number of users served in 12 months is 1.83 billion, with an implied average order frequency of 8.0 / APU, compared with the same period last year. The average annual cost of APU (12-month GMV/APU) increased to 1091 yuan, an increase of 48% compared with the previous year. In addition, the total number of Blackwhale members exceeded 55 million, a year-on-year / month-on-month net increase of 30 million / 8 million, and the expenditure of Blackwhale members was 2.5 times that of ordinary users, which played a certain role in supporting the increase in per capita spending.

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