Citigroup: Raises TONGCHENGTRAVEL (00780) target price to HK$26, expects core OTA business revenue growth to accelerate in the second half of the fiscal year.

Citigroup released a research report stating that it is maintaining its performance forecast for TONGCHENGTRAVEL (00780) for the first quarter of the 2025 fiscal year, which is roughly in line with market expectations. Citigroup expects an acceleration in the second half of the 2025 fiscal year, mainly due to the high base in the second quarter of the 2024 fiscal year and the reduction of low-quality businesses since May last year. The bank has raised its target price for Tongcheng from 24 Hong Kong dollars to 26 Hong Kong dollars, maintaining a "buy" rating. The bank believes that its core online travel platform (OTA) business in the first quarter may still meet expectations, and its accommodation business maintains a good momentum due to its exposure to low-end hotels and more resilient ADR compared to the industry.