Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Thematic (Sector/Industry)

<ul>
<li>On Monday evening in the US, <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> reported Q422 results that beat low expectations, but shares in the US traded down about 3% in Tuesday's session</li>
<li>As for guidance, management offered few specifics but noted a sharp improvement in booking activity early in 2023, but also highlighted an outbound capacity bottleneck at the airlines</li>
<li>Just as Covid's negative impacts papered over the secular challenges facing Trip.com, the dramatic near-term recovery in travel activity also obscures longstanding threats</li>
</ul>


On Monday evening in the US, Trip.com (TCOM US) reported Q422 results that beat low expectations, but shares in the US traded down about 3% in Tuesday's session
As for guidance, management offered few specifics but noted a sharp improvement in booking activity early in 2023, but also highlighted an outbound capacity bottleneck at the airlines
Just as Covid's negative impacts papered over the secular challenges facing Trip.com, the dramatic near-term recovery in travel activity also obscures longstanding threats


Trip.com Q4/2022 Results: Back to Reality?

HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

China Travel International Investment Hong Kong / Equity Bottom-Up

China Travel International Investment Hong Kong

<ul>
<li>Share price of <a href="https://www.smartkarma.com/entities/china-travel-international-investment-hong-kong" target="_blank" data-smartkarma-citation="entities:3879:1" rel="noopener">China Travel International Investment Hong Kong (308 HK)</a> (CTII) rallied by 20% over the last 10 trading days but we see good room for more to come.</li>
<li>Our view is that HK-China border opening, revival in domestic tourism, supportive measures and upgrade in attractions are some key drivers for an increasing positive outlook.</li>
<li>At 0.45x 12-month forward P/B (1.5SD below average), there is significant potential for re-rating. Its net cash of HK$0.40/share, or 30% of share price, adds further comfort to us.</li>
</ul>


Share price of China Travel International Investment Hong Kong (308 HK) (CTII) rallied by 20% over the last 10 trading days but we see good room for more to come.
Our view is that HK-China border opening, revival in domestic tourism, supportive measures and upgrade in attractions are some key drivers for an increasing positive outlook.
At 0.45x 12-month forward P/B (1.5SD below average), there is significant potential for re-rating. Its net cash of HK$0.40/share, or 30% of share price, adds further comfort to us.


China Travel Intl Inv (308 HK): Here Comes My Turn!

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

<ul>
<li>Growth of outbound Chinese travel demand strong in May as HK, Macau slow</li>
<li>Domestic travel demand also showed solid growth in May and early June</li>
<li>Trip.com appears reasonably cheap now that it's dipped below US$50, BUY</li>
</ul>


Growth of outbound Chinese travel demand strong in May as HK, Macau slow
Domestic travel demand also showed solid growth in May and early June
Trip.com appears reasonably cheap now that it's dipped below US$50, BUY


Monthly Chinese Tourism Tracker | Outbound Recovery Expands | Domestic Solid Too | (June 2024)

Blue Lotus Research Institute

Andy Fu

China growth and global non-US Internet equities

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

<ul>
<li>Aging population, coupled with under-development of retirement pensions, is the major headwind against enhancing consumption; </li>
<li>The headroom of urbanization as a driver for enhanced consumption is not as big as depicted;</li>
<li>Residential housing has, over the years, become the social safety net for the Chinese. Therefore, the bust of the property market takes many years, if not decades, to heal. </li>
</ul>


Aging population, coupled with under-development of retirement pensions, is the major headwind against enhancing consumption; 
The headroom of urbanization as a driver for enhanced consumption is not as big as depicted;
Residential housing has, over the years, become the social safety net for the Chinese. Therefore, the bust of the property market takes many years, if not decades, to heal. 


How to Stimulate China's Consumption, Part II

<ul>
<li>During the upcoming Dragon Boat Festival, both flight and railway traffic seems sluggish, indicating a cooled-down enthusiasm for long-distance trips due to budget constraints.</li>
<li>Data points to booming short-distance travel with self-driving as the major means, helped by lower price;</li>
<li>Benefiting from hotel booking and catering, Meituan is the biggest beneficiary of such consumption downgrade.</li>
</ul>


During the upcoming Dragon Boat Festival, both flight and railway traffic seems sluggish, indicating a cooled-down enthusiasm for long-distance trips due to budget constraints.
Data points to booming short-distance travel with self-driving as the major means, helped by lower price;
Benefiting from hotel booking and catering, Meituan is the biggest beneficiary of such consumption downgrade.


Meituan Is the Biggest Beneficiary of China's Domestic Travel Recovery

China

Huazhu Group Limited operates a hotel operator and franchisor. The Company provides hotel leasing, directly hotel operation, and co-development services. Huazhu Group mainly conducts businesses in China.

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Huazhu Group (HTHT US)

Trip.com Q4/2022 Results: Back to Reality?

As China emerges from Covid, old challenges remain for Trip.com. After posting solid Q422 results and pointing to signs of a strong recovery, these...

Daniel Hellberg

China Travel Intl Inv (308 HK): Here Comes My Turn!

HK-China border opening, revival in domestic tourism, supportive measures and upgrade in attractions are some key drivers for an increasing...

Osbert Tang, CFA

Monthly Chinese Tourism Tracker | Outbound Recovery Expands | Domestic Solid Too | (June 2024)

May outbound Chinese travel demand was strong, apparently driven by tourists shifting flying outside the Asian region. Domestic demand growth also...

Tracking Traffic

How to Stimulate China's Consumption, Part II

The underdevelopment of China's pension system leads to reliance on the residential property market as social safety net. The headroom of...

Blue Lotus Research Institute

Meituan Is the Biggest Beneficiary of China's Domestic Travel Recovery

Consumer enthusiasm for long-distance trips during the Dragon Boat Festival has cooled. Short-distance tours are popular, benefiting low-cost...

Blue Lotus Research Institute

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Trip.com Q4/2022 Results: Back to Reality?

As China emerges from Covid, old challenges remain for Trip.com. After posting solid Q422 results and pointing to signs of a strong recovery, these...

Daniel Hellberg

China Travel Intl Inv (308 HK): Here Comes My Turn!

HK-China border opening, revival in domestic tourism, supportive measures and upgrade in attractions are some key drivers for an increasing...

Osbert Tang, CFA

Monthly Chinese Tourism Tracker | Outbound Recovery Expands | Domestic Solid Too | (June 2024)

May outbound Chinese travel demand was strong, apparently driven by tourists shifting flying outside the Asian region. Domestic demand growth also...

Tracking Traffic

How to Stimulate China's Consumption, Part II

The underdevelopment of China's pension system leads to reliance on the residential property market as social safety net. The headroom of...

Blue Lotus Research Institute

Meituan Is the Biggest Beneficiary of China's Domestic Travel Recovery

​Consumer enthusiasm for long-distance trips during the Dragon Boat Festival has cooled. Short-distance tours are popular, benefiting low-cost...

Blue Lotus Research Institute

Consumer enthusiasm for long-distance trips during the Dragon Boat Festival has cooled. Short-distance tours are popular, benefiting low-cost...