677pubcom| Ctrip's profit forecast is raised: Daiwa predicts a 1.4-fold increase in outbound travel revenue and a target price rise to HK$653

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Daiwa Securities significantly raises Ctrip Group Co., Ltd.'s 2023 and 2024 annual reports677pubcomEarnings per share forecast677pubcom, the increase is 14% to 25%. This forecast adjustment is based on the actual number of shares being less than expected and the expected decrease in operating expenses. The broker also maintained a "buy" rating on Ctrip and raised its price target from HK$487 to HK$653, which is based on 25 times the average non-GAAP earnings per share for 2024 and 2025.

Ctrip's outbound travel revenue showed a strong recovery in the first quarter and is expected to reach 7.9 billion yuan, a year-on-year increase of 1.1677pubcom.4 times. This marks that the company's outbound travel business has basically recovered to 90% of its 2019 level. Daiwa Securities believes that the implementation of the visa-free policy and the strong rebound in air capacity are key factors driving the growth of outbound travel demand.

The company's hotel business volume has fully recovered to pre-epidemic levels and exceeds that of competitors in the industry by 70% to 75%. The recovery of aviation business volume is also ahead of its peers. Despite price pressures, average daily hotel rents remained unchanged from the same period last year, while airfare prices fell by 15%, but are still 15% higher than before the epidemic. Daiwa Securities predicts that as domestic tourism demand shifts to high-end outbound travel, the impact on the company will be controllable.