Tongcheng Travel stock rating upgraded by HSBC on improving outlook

Published 19/08/2025, 05:30
Tongcheng Travel stock rating upgraded by HSBC on improving outlook

Investing.com - HSBC upgraded Tongcheng Travel Holdings Ltd (HK:780) from Hold to Buy and raised its price target to HK$24.00 from HK$21.00.

The upgrade comes as HSBC analyst Parash Jain expressed encouragement about management’s commentary on improving hotel average daily rate (ADR) outlook, which is being driven by a positive mix shift.

HSBC also cited Tongcheng Travel’s ability to boost take rates and its continued upward margin trajectory, which is benefiting from narrowing losses in the outbound business and operational efficiencies.

The analyst highlighted the company’s strategic priorities, which include focusing on domestic online travel agency (OTA) operations, international expansion, hotel management, and refraining from entering the offline travel business.

These strategic choices "are reassuring, and should ease investor concerns," according to HSBC’s research note, which also mentioned that the higher price target reflects increased estimates and a lower weighted average cost of capital (WACC).

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