Tongcheng Travel (780) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue grew 48.1% year-over-year to RMB4,245.4 million, and H1 2024 revenue rose 48.8% to RMB8,111.6 million, driven by strong travel demand and strategic execution.

• Adjusted net profit for Q2 2024 was RMB656.7 million (up 10.9% YoY, 15.5% margin); H1 2024 adjusted net profit was RMB1,215.2 million (up 10.9% YoY, 15.0% margin).

• Adjusted EBITDA for Q2 2024 was RMB913.5 million (up 13.4% YoY, 21.5% margin); H1 2024 adjusted EBITDA was RMB1,733.7 million (up 12.7% YoY, 21.4% margin).

• User engagement remained strong, with average monthly paying users (MPUs) at 42.5 million in Q2 and accumulated travelers served in the past 12 months up 29.9% to 1.86 billion.

• International air ticketing volume grew over 150% year-over-year in Q2 2024.

Financial highlights

• Core OTA revenue for Q2 2024 was RMB3,526.0 million (up 23.0% YoY); accommodation reservation revenue was RMB1,190.9 million (up 12.8% YoY); transportation ticketing revenue was RMB1,742.7 million (up 16.6% YoY).

• Other core OTA revenue (advertising, hotel management, membership) surged 87.3% YoY to RMB592.3 million.

• Tourism segment contributed RMB719.4 million in Q2 2024, reflecting new offline travel agency and scenic park operations.

• Gross profit for Q2 2024 was RMB2,744.3 million, with gross margin at 64.7%.

• Cash and cash equivalents as of June 30, 2024, stood at RMB7,748.0 million.

Outlook and guidance

• Management remains optimistic about China's travel industry, citing government support, infrastructure improvements, and evolving consumer preferences.

• Focus on enhancing user value, expanding user base, refining products and services, and broadening international presence.

• Strategic emphasis on hotel management, tourism business, and sustainable ESG practices.

• Expectation of higher net margin in Q3, surpassing pre-COVID levels for OTA business.

• International business expected to contribute less than 5% of core OTA revenue in 2024, but rapid growth anticipated in coming years.