Key Takeaways:
Tongcheng Travel Holdings Limited (0780.HK) reported a 14.4 percent increase in first-quarter revenue to RMB 5.01 billion, but its shares fell in the subsequent trading session.
The results, released after market hours, detailed broad growth as the Chinese online travel agency saw continued recovery in its core business lines. The company serves hundreds of millions of users through its digital platforms.
For the quarter ended in March, Tongcheng's adjusted net profit climbed 19.4 percent year-over-year to RMB 941.1 million, according to the announcement. Adjusted EBITDA rose 19.8 percent to RMB 1.39 billion, lifting the adjusted EBITDA margin to 27.7 percent from 26.5 percent in the prior-year period. Net profit attributable to shareholders was RMB 779 million.
The company's stock dropped 4.39 percent in Hong Kong, a negative reaction that contrasts with the solid top- and bottom-line growth. The results underscore the competitive landscape in China's online travel market, even as user engagement for Tongcheng remains robust. The company reported a stable 46.4 million average monthly paying users and a 2.7 percent increase in annual paying users to 253.9 million.
The negative stock reaction, despite the double-digit growth in revenue and profit, may suggest investor concerns about the company's future guidance or the broader macroeconomic environment in China. Investors will be looking for further details from management on the outlook for the upcoming peak travel seasons.
This article is for informational purposes only and does not constitute investment advice.
