Tongcheng Travel (00780.HK) shares are soaring 9.36% in intraday trading on Friday, significantly outperforming the broader market. The surge comes on the heels of the company's impressive fourth-quarter financial results and optimistic analyst projections for its future growth.
The Chinese travel company reported a 13% year-on-year increase in net profit to 350.85 million yuan (US$48.4 million) for the fourth quarter, while revenue jumped 35% to 4.24 billion yuan. Tongcheng Travel attributed the strong performance to improved operational efficiency and optimized marketing strategies, which have led to enhanced profit margins.
Analysts have responded positively to the results, with several major firms expressing confidence in Tongcheng Travel's outlook. J.P. Morgan Securities highlighted the company's potential to outgrow the travel market by two- or three-fold this year, noting that the stock still trades at a discount that appears "too cheap to ignore." Citi Research analysts pointed out that the company's outbound business could break even this year, while the strong growth of its Tongcheng travel app is expected to further boost margins. Jefferies analysts also predict continued market share gains for the company in the coming year.
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