Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Bottom-Up

<ul>
<li>Q124 showed solid top-line growth, impressive improvement in core margins</li>
<li>We are not too concerned about moderating domestic hotel, air pricing</li>
<li>After consensus EPS raised, TCOM a BUY below US$50 per ADS, in our view</li>
</ul>


Q124 showed solid top-line growth, impressive improvement in core margins
We are not too concerned about moderating domestic hotel, air pricing
After consensus EPS raised, TCOM a BUY below US$50 per ADS, in our view


Trip.com Q124 Review: Solid Top-Line Growth | Progress on Margins | BUY Below US$50

Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Atour Lifestyle Holdings / Equity Bottom-Up

<ul>
<li>Atour reported C1Q23 revenue 4.6%/6.8% higher than our est./cons., and non-GAAP NI 6.9%/8.8% higher than our est./ cons, driven by hotel expansion and new retail products.</li>
<li>The company raised total revenue guidance from 30% to 40% YoY for 2024 due to a strong retail sales trend. </li>
<li>We believe retail sales is a form of increase in Atour’s same store sales. We thus raise TP to US$39 to reflect this retail-driven increase of same store sales.</li>
</ul>


Atour reported C1Q23 revenue 4.6%/6.8% higher than our est./cons., and non-GAAP NI 6.9%/8.8% higher than our est./ cons, driven by hotel expansion and new retail products.
The company raised total revenue guidance from 30% to 40% YoY for 2024 due to a strong retail sales trend. 
We believe retail sales is a form of increase in Atour’s same store sales. We thus raise TP to US$39 to reflect this retail-driven increase of same store sales.


[Atour Lifestyle (ATAT US, BUY, TP US$39) TP Change]: Should Retail Profit Be Accorded a Multiple?

<ul>
<li>Chinese outbound travel demand continued its gradual recovery in April </li>
<li>Moderating domestic demand? It's not new, and outbound matters more </li>
<li>On a pullback to below US$50, we would again BUY Trip.com's ADRs</li>
</ul>


Chinese outbound travel demand continued its gradual recovery in April 
Moderating domestic demand? It's not new, and outbound matters more 
On a pullback to below US$50, we would again BUY Trip.com's ADRs


Monthly Chinese Tourism Tracker | Outbound Grinds Forward | Domestic Weakness Not New | (May 2024)

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>The hotel sector has been under pressure in 2Q24 QTD (post-holidays leisure demand is weak and business recovery is slow), and therefore, the outlook is still conservative.</li><li>However, Atour’s retail business has performed well to more than offset this drag. Hence with a healthy retail sales growth target upgrade, we maintain BUY and raise TP to US$27.72, based on 23x FY24E P/E (from 20x), which is still not demanding, given a 29% sales/ 31% adj. net profit CAGR during FY23-26E.</li><li>2Q24E outlook is still conservative. Management is still highly cautious about the hotel demand, because of the macro uncertainty (post-holidays and weekend orders have been week vs last year) and they are still foreseeing a potential YoY drop in RevPAR in 2Q24E. O</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

The hotel sector has been under pressure in 2Q24 QTD (post-holidays leisure demand is weak and business recovery is slow), and therefore, the outlook is still conservative.However, Atour’s retail business has performed well to more than offset this drag. Hence with a healthy retail sales growth target upgrade, we maintain BUY and raise TP to US$27.72, based on 23x FY24E P/E (from 20x), which is still not demanding, given a 29% sales/ 31% adj. net profit CAGR during FY23-26E.2Q24E outlook is still conservative. Management is still highly cautious about the hotel demand, because of the macro uncertainty (post-holidays and weekend orders have been week vs last year) and they are still foreseeing a potential YoY drop in RevPAR in 2Q24E. OContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Atour Lifestyle (ATAT US) - Guidance Raised, Backed by Robust Retail Sales

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

Thematic (Sector/Industry)

<ul>
<li>PDD US/SHEIN/AMZN US: Temu opens up platform to brand merchants (+/-/-)</li>
<li>TCOM US/3690 HK/ATAT US  :  Visa-free policy for 12 countries including France extended until December 31, 2025.(+/+/+)</li>
<li>700 HK: After the release of new limited skins for &lt;League of Legends: Wild Rift&gt;, there has been a noticeable rebound in grossing rankings.(+)</li>
</ul>


PDD US/SHEIN/AMZN US: Temu opens up platform to brand merchants (+/-/-)
TCOM US/3690 HK/ATAT US  :  Visa-free policy for 12 countries including France extended until December 31, 2025.(+/+/+)
700 HK: After the release of new limited skins for &lt;League of Legends: Wild Rift&gt;, there has been a noticeable rebound in grossing rankings.(+)


[Blue Lotus Daily - TMT Update]:PDD US/SHEIN/AMZN US/TCOM US/3690 HK/ ATAT US/700 HK

China

Atour Lifestyle Holdings Limited operates as a holding company. The Company, through its subsidiaries, owns and manages midscale hotel chain through offline and online channels, including mobile application and weixin-wechat mini program. Atour Lifestyle Holdings serves customers in China.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Atour Lifestyle Holdings (ATAT US)

Trip.com Q124 Review: Solid Top-Line Growth | Progress on Margins | BUY Below US$50

Trip.com's Q124 earnings results showed solid top-ine growth and strong core margin improvement. We believe the company's ADSs are attractive below...

Tracking Traffic

[Atour Lifestyle (ATAT US, BUY, TP US$39) TP Change]: Should Retail Profit Be Accorded a Multiple?

Atour's Q1 revenue and non-GAAP NI beat estimates, driven by hotel expansion and new retail products. Raised 2024 revenue guidance to 40% YoY due...

Blue Lotus Research Institute

Monthly Chinese Tourism Tracker | Outbound Grinds Forward | Domestic Weakness Not New | (May 2024)

Outbound Chinese travel demand continued its recovery in April. Chinese travel-linked shares have pulled back over concerns about hotel and air...

Tracking Traffic

Atour Lifestyle (ATAT US) - Guidance Raised, Backed by Robust Retail Sales

The hotel sector has been under pressure in 2Q24 QTD (post-holidays leisure demand is weak and business recovery is slow), and therefore, the...

CMB International

[Blue Lotus Daily - TMT Update]:PDD US/SHEIN/AMZN US/TCOM US/3690 HK/ ATAT US/700 HK

Temu allows brand merchants on platform, visa-free policy extended for 12 countries, limited skins boost grossing rankings for League of Legends:...

Blue Lotus Research Institute

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Trip.com Q124 Review: Solid Top-Line Growth | Progress on Margins | BUY Below US$50

Trip.com's Q124 earnings results showed solid top-ine growth and strong core margin improvement. We believe the company's ADSs are attractive below...

Tracking Traffic

[Atour Lifestyle (ATAT US, BUY, TP US$39) TP Change]: Should Retail Profit Be Accorded a Multiple?

​Atour's Q1 revenue and non-GAAP NI beat estimates, driven by hotel expansion and new retail products. Raised 2024 revenue guidance to 40% YoY due...

Blue Lotus Research Institute

Monthly Chinese Tourism Tracker | Outbound Grinds Forward | Domestic Weakness Not New | (May 2024)

Outbound Chinese travel demand continued its recovery in April. Chinese travel-linked shares have pulled back over concerns about hotel and air...

Tracking Traffic

Atour Lifestyle (ATAT US) - Guidance Raised, Backed by Robust Retail Sales

The hotel sector has been under pressure in 2Q24 QTD (post-holidays leisure demand is weak and business recovery is slow), and therefore, the...

CMB International

[Blue Lotus Daily - TMT Update]:PDD US/SHEIN/AMZN US/TCOM US/3690 HK/ ATAT US/700 HK

​Temu allows brand merchants on platform, visa-free policy extended for 12 countries, limited skins boost grossing rankings for League of Legends:...

Blue Lotus Research Institute

Atour's Q1 revenue and non-GAAP NI beat estimates, driven by hotel expansion and new retail products. Raised 2024 revenue guidance to 40% YoY due...

Temu allows brand merchants on platform, visa-free policy extended for 12 countries, limited skins boost grossing rankings for League of Legends:...