Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

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Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Equity Bottom-Up

Chinese online travel agency (OTA) <a href="https://www.smartkarma.com/entities/tongcheng-elong-holdings-ltd" target="_blank" data-smartkarma-citation="entities:27363:1" rel="noopener">Tongcheng-Elong Holdings Ltd (780 HK)</a> released Q3 results on Monday evening in HK. Revenue and adjusted EBITDA were still below year-ago levels, but both metrics were significantly improved from Q2 levels. Notably, purchasing users in Q3 were flat YoY.
Market leading OTA <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> will report its Q3 results on Tuesday, December 1st after the US close. We expect Trip.com to report a sequential improvement, but we believe Q3 results will show its recovery lags Tongcheng-ELong's, mainly due to Trip.com's international exposure.
The expected availability of Covid19 vaccines in 2021 should eventually open up cross-border travel for Chinese tourists next year, but Trip.com and other travel service providers may still be facing a difficult start to 2021, including the long Lunar New Year holiday in February.
As such, we retain a negative view of Chinese tourism demand in the medium-term, anticipating that even a return to the modest demand growth seen pre-Covid19 will require another few quarters, at least.

Chinese online travel agency (OTA) Tongcheng-Elong Holdings Ltd (780 HK) released Q3 results on Monday evening in HK. Revenue and adjusted EBITDA were still below year-ago levels, but both metrics were significantly improved from Q2 levels. Notably, purchasing users in Q3 were flat YoY.
Market leading OTA Trip.com (TCOM US) will report its Q3 results on Tuesday, December 1st after the US close. We expect Trip.com to report a sequential improvement, but we believe Q3 results will show its recovery lags Tongcheng-ELong's, mainly due to Trip.com's international exposure.
The expected availability of Covid19 vaccines in 2021 should eventually open up cross-border travel for Chinese tourists next year, but Trip.com and other travel service providers may still be facing a difficult start to 2021, including the long Lunar New Year holiday in February.
As such, we retain a negative view of Chinese tourism demand in the medium-term, anticipating that even a return to the modest demand growth seen pre-Covid19 will require another few quarters, at least. 

Tough Times (Still) In Chinese Tourism | Trip.com Q3 Preview | TongCheng-ELong Q3 Review