Tongcheng Travel (780) Q4 2024 earnings summary

Executive summary

• Achieved record revenue and adjusted net profit in 2024, with revenue up 45.8% year-over-year to RMB 17.34 billion and adjusted net profit up 26.7% to RMB 2.8 billion, driven by strong domestic, outbound, and international travel demand.

• User base expansion, especially in non-first tier cities, led to annual paying users reaching 240 million and increased user engagement and purchase frequency.

• Outbound and international business saw exponential growth, with international air ticketing volume up over 130% year-over-year and international accommodation room night sales up over 110%.

• Continued investment in AI and technology, including proprietary generative AI systems, to enhance user experience and operational efficiency.

• Maintained "AA" MSCI ESG rating for third consecutive year and included in S&P Global Sustainability Yearbook China.

Financial highlights

• Full year 2024 net revenue: RMB 17.3 billion, up 45.8% year-over-year; adjusted net profit: RMB 2.8 billion, margin 16.1%.

• Q4 2024 net revenue: RMB 4.24 billion, up 34.8% year-over-year; adjusted net profit: RMB 660 million, margin 15.6%.

• Adjusted EBITDA for 2024: RMB 4.1 billion, up 29.7% year-over-year, margin 23.4%.

• Gross margin for 2024: 64.1% (down from 73.5% in 2023) due to tourism business integration; core OTA operating profit margin improved to 26.9%.

• ARPU rose 44% year-over-year to RMB 33 in 2024; DAU of standalone app more than doubled.

Outlook and guidance

• Optimistic for continued strong growth in 2025, with core OTA revenue growth outpacing the market and accommodation business leading.

• Margin expansion anticipated for core OTA business in 2025, supported by improved RPU, marketing efficiency, and margin programs.

• Outbound business expected to reach break-even or profitability in 2025.

• Focus on strengthening core OTA, expanding outbound business, and pursuing strategic investments for long-term growth.

• Emphasis on ESG, corporate governance, and delivering long-term stakeholder value.