Global Mobility/Transport, Equity Long-Short

Mohshin Aziz

Equity Bottom-Up

<ul>
<li>4Q23 results beat expectations with record revenues and profits and announced a maiden cash dividend of USD8.75/share (0.35% yield)</li>
<li>But, share price plunged by 10% on soft guidance of 4-6% YoY growth in room-night booked in 1Q24, due to the impact of high-interest rates and the ongoing wars </li>
<li>Good opportunity to buy on dips, stock trading at ~20x FY24 PE, ~18% discount to LT mean. Plus, there is a balance USD7.5b (6.1% shares in issue) of share buybacks  </li>
</ul>


4Q23 results beat expectations with record revenues and profits and announced a maiden cash dividend of USD8.75/share (0.35% yield)
But, share price plunged by 10% on soft guidance of 4-6% YoY growth in room-night booked in 1Q24, due to the impact of high-interest rates and the ongoing wars 
Good opportunity to buy on dips, stock trading at ~20x FY24 PE, ~18% discount to LT mean. Plus, there is a balance USD7.5b (6.1% shares in issue) of share buybacks  


Booking.com (BKNG US): Buying Back Shares Until There Is None Left

HK/China Equity Long-Short

Osbert Tang, CFA

Tongcheng Travel Holdings  / Equity Bottom-Up

<ul>
<li>The upcoming Chinese New Year travel rush is expected to see air passenger volume reach 80m, a 9.8% increase vs. 2019. <a href="https://www.smartkarma.com/entities/tongcheng-travel-holdings-ltd" target="_blank" data-smartkarma-citation="entities:27363:1" rel="noopener">Tongcheng Travel Holdings (780 HK)</a> is a key beneficiary.</li>
<li>In addition to air ticket booking, Tongcheng can gain from demand for related services and products. The focus on lower-tier cities will make it better satisfy their demand. </li>
<li>Its FY24F PER of 15.2x is lower than sector average of 16.4x, yet 3-year EPS CAGR of 30.7% is higher. Its underperformance against <a href="https://www.smartkarma.com/entities/trip-com-group-ltd" target="_blank" data-smartkarma-citation="entities:180:1" rel="noopener">Trip.com (TCOM US)</a> can be reversed.</li>
</ul>


The upcoming Chinese New Year travel rush is expected to see air passenger volume reach 80m, a 9.8% increase vs. 2019. Tongcheng Travel Holdings (780 HK) is a key beneficiary.
In addition to air ticket booking, Tongcheng can gain from demand for related services and products. The focus on lower-tier cities will make it better satisfy their demand. 
Its FY24F PER of 15.2x is lower than sector average of 16.4x, yet 3-year EPS CAGR of 30.7% is higher. Its underperformance against Trip.com (TCOM US) can be reversed.


Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Last month, Reuters reported that activist-ish investor Value Act Capital Management had bought a stake in <a href="https://www.smartkarma.com/entities/recruit-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15070:1" rel="noopener">Recruit Holdings (6098 JP)</a> and separately in <a href="https://www.smartkarma.com/entities/expedia-group-inc" target="_blank" data-smartkarma-citation="entities:6669:1" rel="noopener">Expedia Group, Inc. (EXPE US)</a>). </li>
<li>It was "revealed" in a letter to its clients. And there were reasons stated why Value Act thought Recruit was worth a lot more than it was trading for. </li>
<li>Today, Recruit announced an on-market buyback for ¥200bn. That's nice. But it is not enormous, and it may signal other info, and it is worth understanding details and context.</li>
</ul>


Last month, Reuters reported that activist-ish investor Value Act Capital Management had bought a stake in Recruit Holdings (6098 JP) and separately in Expedia Group, Inc. (EXPE US)). 
It was "revealed" in a letter to its clients. And there were reasons stated why Value Act thought Recruit was worth a lot more than it was trading for. 
Today, Recruit announced an on-market buyback for ¥200bn. That's nice. But it is not enormous, and it may signal other info, and it is worth understanding details and context.


Recruit (6098 JP) Buyback - It's Big But Not THAT Big; Value Act Effect Vs Corp Selldown Vs Multiple

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

<ul>
<li>Down 66% from its 2021 IPO price, <a href="https://www.smartkarma.com/entities/full-truck-alliance" target="_blank" data-smartkarma-citation="entities:33429:1" rel="noopener">Full Truck Alliance (YMM US)</a> has been a loser for investors, though we would argue its underlying performance on fundamentals has been mixed</li>
<li>We believe FTA's narrow focus on expanding its lead in China's spot, inter-city FTL trucking market blinds management to the broader role it must pursue to ensure long-term growth</li>
<li>FTA should aggressively funnel users into its Transaction Commission segment and invest in building a Transportation Management Software offering to attract and retain customers</li>
</ul>


Down 66% from its 2021 IPO price, Full Truck Alliance (YMM US) has been a loser for investors, though we would argue its underlying performance on fundamentals has been mixed
We believe FTA's narrow focus on expanding its lead in China's spot, inter-city FTL trucking market blinds management to the broader role it must pursue to ensure long-term growth
FTA should aggressively funnel users into its Transaction Commission segment and invest in building a Transportation Management Software offering to attract and retain customers


Full Truck Alliance: Currently Less Than 'Full Loaded', but Issues Are Fully Fixable

<ul>
<li>While adjusted net profit of <a href="https://www.smartkarma.com/entities/tongcheng-elong-holdings-ltd" target="_blank" data-smartkarma-citation="entities:27363:1" rel="noopener">Tongcheng Travel Holdings Ltd (780 HK)</a> plummeted in 4Q22, the positive momentum in 1Q23 as revealed supports a sharp recovery in FY23.</li>
<li>Its huge exposure to lower-tier cities will fuel outlook while increase in monetisation will support profitability rebound. Success at Blackwhale membership program is another growth engine.  </li>
<li>Management is confident that revenue growth and better efficiency will lead the return of FY23 margin to pre-pandemic levels. Net cash position (12% of share price) is an added strength. </li>
</ul>


While adjusted net profit of Tongcheng Travel Holdings Ltd (780 HK) plummeted in 4Q22, the positive momentum in 1Q23 as revealed supports a sharp recovery in FY23.
Its huge exposure to lower-tier cities will fuel outlook while increase in monetisation will support profitability rebound. Success at Blackwhale membership program is another growth engine.  
Management is confident that revenue growth and better efficiency will lead the return of FY23 margin to pre-pandemic levels. Net cash position (12% of share price) is an added strength. 


Tongcheng Travel (780 HK): Best for Capturing Lower-Tier Cities' Growth

United States

Expedia Group, Inc. provides branded online travel services for leisure and small business travelers. The Company offers a wide range of travel shopping and reservation services, providing real-time access to schedule, pricing and availability information for airlines, hotels, and car rental companies.

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Expedia Group, Inc. (EXPE US)

Booking.com (BKNG US): Buying Back Shares Until There Is None Left

Booking.com's record 2023 results and cash dividend announcement was overshadowed by soft guidance, leading to a 10% share price drop. However,...

Mohshin Aziz

Tongcheng Travel (780 HK): We Are Back

CNY travel rush is expected to boost air passenger volume by 9.8% vs. 2019, benefiting Tongcheng. Its focus on lower-tier cities and strong EPS...

Osbert Tang, CFA

Recruit (6098 JP) Buyback - It's Big But Not THAT Big; Value Act Effect Vs Corp Selldown Vs Multiple

Recruit has announced a ¥200bn buyback. Last year's market buyback was ¥150bn. This is NOT "Value Act Effect" but it may be taken as such. That...

Travis Lundy

Full Truck Alliance: Currently Less Than 'Full Loaded', but Issues Are Fully Fixable

FTA's shares are down 66% vs their IPO price, but underlying performance has been mixed. To ensure long-term growth, FTA should follow our two-part...

Tracking Traffic

Tongcheng Travel (780 HK): Best for Capturing Lower-Tier Cities' Growth

Positive business momentum in 1Q23 supports a sharp recovery in FY23. Huge exposure to lower-tier cities and increase in monetisation will support...

Osbert Tang, CFA

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