As an OTA platform under Ctrip, with Tencent behind it, Tongcheng Yilong has maintained a good profitability in recent years.
After the Hong Kong stock market on March 25, the “small program first share” was announced by Cheng Yilong in 2019. Fourth quarter and full year financial data. From the financial report point of view, whether in the whole year or the fourth quarter, Tongcheng Yilong’s revenue and net profit have achieved a good growth rate. It can be said that a dazzling financial report was handed over.
Thanks to the positive financial report, the share price of Tongyi Yilong continued to rise at the opening of the market today, up more than 6% as of press time, and was quoted at HK $ 11.02.
Source: Snowball
As an OTA platform under Ctrip, Tencent is behind it. Tongyi Yilong has maintained a good profitability in recent years. However, in recent years, with more and more participants in the online travel track, the market dividend is long gone. Behind the intensified competition, Tong Cheng Yilong has also been under more pressure.
The sudden epidemic in 2020 will take a heavy toll on the tourism industry, and Tong Yilong will be affected accordingly. However, judging from the recent big data, the tourism industry has embarked on a gradual recovery path. Can Tong Yilong take advantage of this opportunity to fight back? Let’s take a look at this earnings report first.
Revenue and net profit have increased sharply, the number of annual paying users hits a record high
From the perspective of revenue, in the fourth quarter, the revenue of Tongcheng Yilong increased by 24.4% year-on-year to RMB 1.956 billion yuan. In 2019, total revenue increased by 21.4% year-on-year to 7.393 billion yuan. Revenue growth in the four quarters of 2019 were 17.5%, 21%, 22.3%, and 24.4%, showing a continuous upward trend.
Specifically, in the fourth quarter, the revenue sources of Tongcheng Yilong mainly came from accommodation booking and transportation ticketing business. Among them, accommodation booking service income was 622 million yuan, accounting for 31.8% of the total revenue, which was higher than the 27% of the previous year; transportation ticketing service revenue was 1.182 billion yuan, accounting for 60.4% of the total revenue; other income was 153 million Yuan, accounting for 7.8% of the total revenue, higher than the proportion of 4.8% in the previous year.
Other income mainly includes advertising services, attractions tickets and membership cards. It is worth noting that Tongcheng Yilong started to develop advertising business in the second quarter, and its revenue exceeded 100 million yuan for the first time in the third quarter. This quarter continued to maintain rapid growth, which was mainly due to the sameThe cooperation between Cheng Yilong and Tencent in advertising, part of the former advertising space was digested by Tencent advertisers.
The steady development of various businesses resulted in the transaction volume of Tongyi Yilong increased by 19.7% year-on-year to 41.3 billion yuan in the fourth quarter, and the annual transaction volume was 166.1 billion yuan, an increase of 26.3% year-on-year.
From the perspective of net profit, the adjusted net profit in the fourth quarter was 331 million yuan, a year-on-year increase of 67.7%; the adjusted net profit for the year was 15.44 yuan, a year-on-year increase of 35.4%. It is worth mentioning that, as of September 30, Tongcheng Yilong’s net profit of 1.21 billion yuan in the first three quarters has exceeded 1.14 billion yuan in 2018.
In terms of user scale, in the fourth quarter, the MAU of Tongyi Yilong was 206 million, a year-on-year increase of 18.5%; the MPU reached 27.1 million, a year-on-year increase of 21.5%. It is worth noting that both of these figures were down from the previous quarter. Looking at the whole year, Yilong’s MAU in 2019 increased by 17.1% year-on-year to 205 million, and MPU increased by 34.5% year-on-year to 26.9 million. In the same year, Yilong’s annual paid user number in 2019 reached a record high, reaching 152 million, an increase of 35.1% over 2018. Its traffic entrances are mainly WeChat payment entrances, applets, and its own apps.
For the outlook for the next quarter, Tong Yilong said that its net revenue will decrease by 42% to 47% year-on-year, but adjusted profits may remain profitable.
To sum up, the performance of this financial report by Tong Yilong is dazzling. The rise of the stock price also shows investors’ confidence in it. As the epidemic situation gradually improves, the tourism industry is expected to usher in a new round of rebound. However, the uncertainties caused by the epidemic remain noteworthy. After all, after the outbreak of the global OTA giant Booking announced that it had withdrawn its first-quarter performance expectations, Expedia also announced that it would not provide specific performance prospects due to the huge uncertainty of the outbreak. Ctrip Chairman Liang Jianzhang said publicly that 2020 “The year that lost most, or at least one quarter.”
Although Tong Yilong is expected to be profitable in the next quarter, this may benefit from its advantages in efficiency, business structure, traffic and other advantages. However, combined with the financial report, there are still many problems that need to be faced with Cheng Yilong.
MAU has increased sharply, but relies too much on WeChat diversion or a double-edged sword
The financial report shows that in the fourth quarter of the same period, Yilong’s MAU increased by 18.5% year-on-year to 260 million yuan, but decreased by 2.8 million quarter-on-quarter; MPU increased by 21.5% year-on-year to 27.1 million, and also decreased by 2.7 million. Looking at the whole year, according to the consolidation benchmark, in the same year, Yilong’s MAU in 2019 increased by 17.1% to 205 million, and MPU increased by 34.5% to 26.9 million.
It can achieve a good increase in both MAU and MPU, which is inseparable from the diversion of Tencent WeChat. At present, WeChat provides multiple entry channels for accessing Tongcheng Yilong WeChat applets, including WeChat payment portals, applets, etc. At the end of 2019, Tongyi Yilong launched the “Fun Fun Collection” applet, which focuses on surrounding fun scenes, starting from popular consumer products such as popular high-frequency foods, parent-child leisure, local fun, and surrounding vacations. A leisure and vacation service platform that gathers eating, drinking, and fun. In fact, this is another reappearance of Yilong Cheng through WeChat diversion.
At the same time, Tongcheng Yilong ’s sinking strategy is one of the key points of its layout, which is also inseparable from its WeChat diversion. According to the financial report, the proportion of registered users of Tongyi Yilong in non-first-tier cities in China remained at 85.6%, and about 62.4% of new WeChat paying users came from third-tier and below cities, which was higher than 61.1% in the same period in 2018. It can be said that the traffic pool of WeChat has contributed to the rapid development of Cheng Yilong.
However, Tong Yilong’s reliance on WeChat can be a double-edged sword. On the one hand, Tong Cheng’s reliance on social platforms is not a bad thing. how to say? After all, through social platforms such as WeChat, OTA can achieve traffic and technical empowerment, which has also been well verified by Tong Yilong. Especially for Tong Yilong, who now wants to expand the sinking market traffic, it needs to rely on the support of WeChat, a traffic pool, to ensure user stickiness.
But on the other hand, excessive reliance on Tencent has potential risks that deserve the attention of Cheng Yilong. For the OTA platform, its traffic sources include three aspects, namely the platform’s own traffic, external cooperation platform traffic and paid purchase traffic. OTA platform sharing with the cooperation platform traffic pool is an important source of traffic. If the cooperation between the two parties is broken, the traffic impact on the OTA platform will be very large.
From the perspective of Tencent’s OTA layout, in addition to investing in Yilong of Cheng, it also invested in the free travel service platform Ma Honeycomb in May last year. At the same time, he is also starting to build smart travel apps, such as the “Cross-Craft” The “Yunnan Tour” APP is a pilot for the layout of Tencent’s industrial internet strategy in the regional tourism industry. OTA has been very mature after the development from the PC to the mobile end. At this time, Tencent has accelerated its layout in the online travel market. In the name of the industrial Internet, it is not the rest of OTA play. Once there is a better cooperation target, it is hard to say whether Tencent will maintain long-term cooperation with Cheng Yilong. onceCan not continue to maintain, this will be a huge blow to the monthly number of Cheng Yilong, and then affect profitability.
The turmoil of the OTA market is posing pressure on potential revenue
The development of the OTA market is quite mature so far. Over the past 20 years, with the help of China’s economy and China’s Internet demographic dividend, online tourism has shown an explosive development almost every year. In 2019, the annual transaction scale of China’s online tourism market exceeded one trillion yuan, the market concentration was significant, and the leading manufacturers continued to operate at a high level. The characteristics of the tourism market have become standardized, quality, and industrial intelligence +. This has also accelerated the competition between the major OTA participants. The current peer Yilong can be said to be suffering from the enemy.
In recent years, Meituan and Feizhu have launched cross-border challenges to the online tourism market through the strategy of “high frequency and low frequency”. Meituan’s strategy is to drive the overall frequency and stickiness of users through high-frequency scenarios such as takeaway, which will attract more merchants to settle in, and drive Meituan’s relatively low-frequency but higher profit margin products, such as wine travel. In 2018, for the first time in a single month, Meituan Hotel surpassed the entire Ctrip department, not to mention Ctrip’s Tongcheng Yilong. According to Meituan data, 90% of its hotel users are takeaway or shoppers.
The analysis report on the development of China’s online hotel booking industry in the first half of 2019 published by Trustdata, an Internet big data monitoring platform, shows that in the first half of 2019, Meituan hotel orders accounted for 50.6% of the industry’s total orders, occupying the market More than half of the orders, together with Ctrip, the second largest shareholder of Cheng Yilong, also had only 21.3%. In the first half of the night, Meituan Hotels accounted for 47.3% of the industry, surpassing Ctrip, Where, and Cheng Yilong combined. It can be seen that the US group’s strategic play is fierce.
Alibaba ’s super-eco flying pig, which has wrestled with the US group, has risen rapidly in recent years. At the same time, new members are constantly influx. In April 2019, OYO capital surged to set up a hotel group. JD.com launched an offline travel agency in April after launching its travel platform. Didi also established tourism in April. The company is trying to nugget the travel industry.
At the same time, foreign OTA brands are also strengthening the layout of the Chinese market. Airbnb has madly advertised. Airbnb, which had hardly advertised before, has invested tens of millions of yuan in monthly advertising in 2019. Priceline has invested in Meituan to lay out the Chinese market again. There is no doubt that the competition is intensifying.
In addition, it is worth mentioning that in the past two years, the weak consumption caused by the increasing downward pressure on the economy has also affected the tourism industry. In the National Day Golden Week in 2019, a total of 782 million domestic tourists were received nationwide, an increase of 7.81% year-on-year; domestic tourism revenue reached 649.71 billion yuan, an increase of 8.47% year-on-year. The growth rate has fallen to single digits, and the situation is grim. In this economic context, OTA will inevitably sufferSlowed down due to the impact of the local government.
According to the financial report, in 2019, the revenue of Tongyi Yilong increased by 21.4% year-on-year to 7.393 billion, an increase of 4.9 percentage points from the year-on-year growth rate of 16.5% in 2018. However, under the background of increasingly fierce competition in the future and increasing downward pressure on the economy, it remains to be further verified by the market whether Tongyi Yilong can continue to maintain upward growth.
Epidemic strikes tourism industry How did Tong Yilong rebirth?
The sudden new crown pneumonia epidemic in 2020 will sweep across the country, and it will have different impacts on all walks of life. Among them, the tourism industry in the whole country has almost stopped. Ctrip, one of the shareholders of Tongyi Yilong, stated in the first quarter of 2020’s performance expectations that if it did not include equity compensation expenses, operating losses in the first quarter of 2020 were 1.75 billion to 1.85 billion yuan, and net operating income fell 45% to 50%. In the face of the epidemic, OTA bosses can not escape.
Tongcheng Yilong’s main business comes from hotel and ticket reservations. In very rare times, there is very little travel and accommodation demand, and the business is the first. This has caused its stock price to fall continuously since mid-January. The transaction fell below the issue price on the 16th of this month. According to STR’s preliminary data analysis, on January 14, the hotel occupancy rate in mainland China reached 70%, and in less than two weeks, it fell to 17% on January 26, leading to the closure or maintenance of many hotels. Dismal operation.
On the other hand, although the epidemic situation has had a great impact on the development of Tongyi Yilong’s various businesses, from the beginning of February, Tongyi Yilong has launched a series of lines, including epidemic hotel operation skills, income skills, etc. Taking courses and practicing internal skills may be regarded as Tong Yilong’s recharge for the industry recovery. Data show that the current audience of this series of measures has reached more than 10,000 person-times.
In addition, data from Tongyi Yilong shows that after the May 1 holiday plan was announced, the peak value of flights from May 12 to March 18 when users searched for flights around May 1 increased by 80% week-on-week, and the seven-day average month-on-month growth rate exceeded same time last year. On the 18th, the “Civil Aviation Passenger Market Recovery Trend Report for the First Half of 2020” jointly issued by Tongyi Yilong and Zhuan Zhuan pointed out that since the beginning of March, the average number of days between the booking time and the departure time of domestic air tickets has widened significantly, and the number of forward bookings Significant growth. Among them, the weekly bookings for domestic air tickets departing in April from February 27 to March 5 increased 77% month-on-month. Weeks departing in JuneBookings increased by 250% month-on-month, which directly indicates that consumer confidence is recovering. On the day of the report’s announcement, Yilong Yilong rose more than 5% in the intraday session, also revealing the confidence of the capital market.
Data verification in 2003 showed that after the SARS outbreak in June, the tourism industry experienced retaliatory growth. In August, the data returned to the same level as the previous year. All indicators hit a record high. This means that after the epidemic gradually improves, the tourism industry is expected to rebound sharply. The financial report shows that the company still maintains optimistic expectations for the next quarter’s profit, which also brings more reverie to the market.
Anyway, with the continuous change of the current overall environment, people ’s demand for tourism is not the same, which means more opportunities and rebound potential, which is also a good opportunity for Yilong to stage a Jedi counterattack. On the 20th of this month, Morgan Stanley is expected to outperform the market with Cheng Yilong in the next 60 days and give it an “overweight” rating. It is worth mentioning that on the 12th of this month, Tong Yilong has been included in the Hong Kong Stock Connect and became effective. The capital market has also responded by the stock price rising by more than 11%. It is conceivable that this will bring more possibilities for it.
However, it is worth noting that Tongcheng Yilong has a large number of user complaints on Black Cat complaints, indicating that it still needs to improve its customer experience, because the online tourism industry is already a service industry. Good reputation, in the context of a highly competitive market, even the best opportunities will be quickly divided up. As for the performance of Tongyi Yilong in the next quarter, the Hong Kong Stock Research Institute will continue to pay close attention to it.
Source of this article: Hong Kong Stock Research Institute (public number: ganggushe) aims to help Chinese investors understand the world, focus on reporting Hong Kong stock companies, and friends who are interested in Hong Kong stocks should follow us quickly.