01179 Overview

Goldman Sachs Ratings: Goldman Sachs reiterated a Buy rating for HWORLD-S, forecasting a 4Q25 revenue increase of 8% YoY and full-year revenue growth of 6%, with EBITDA expected to reach RMB8.4 billion.

Atour Lifestyle Holdings Outlook: The broker predicts a significant 57% YoY increase in Atour Lifestyle Holdings' 4Q25 EBITDA to RMB700 million, aligning with full-year estimates of RMB2.5 billion.

TONGCHENGTRAVEL Projections: Goldman Sachs anticipates TONGCHENGTRAVEL's 4Q25 revenue to grow by 13% YoY, driven by an 18% increase in its core OTA business, slightly outperforming TRIP.COM-S.

Cautious View on CTG DUTY-FREE: While maintaining a cautious stance on CTG DUTY-FREE due to uncertain sales momentum, Goldman Sachs projects a 20% YoY revenue increase for 4Q25, following previous declines.

Spring Festival Tourism Growth: Domestic tourist volume in Mainland China increased by 19% YoY to 596 million trips, with tourism spending also rising by 19% YoY to RMB803 billion, while outbound tourist volume grew by 24% YoY to 4.8 million trips.

Hotel and Airline Performance: The hotel industry saw mid to high single-digit percentage growth in RevPar, and airline ticket prices exceeded expectations, with domestic routes up 7% YoY and international routes up 15% YoY.

Macau's Gaming Revenue: Macau's average daily gross gaming revenue (GGR) was MOP786 million, a 5% YoY increase, but fell short of the expected MOP850-900 million due to a lower-than-normal VIP win rate.

Investment Outlook: Goldman Sachs highlighted favorable fundamentals for Buy-rated hoteliers and Macau casinos, as well as airlines, indicating potential growth in these sectors.

Citi's Optimism on Chinese Consumption: A Citi research report indicates strong expectations for the growth of Chinese experiential consumption, particularly during the upcoming Chinese New Year holiday.

Leisure Travel Demand: The nine-day CNY holiday from February 15 to 23 is anticipated to drive significant leisure travel demand, benefiting duty-free sales in Hainan and hotel revenues for companies like Atour Lifestyle and HWORLD-S.

Top Picks in Consumer Sector: Citi has identified Atour Lifestyle as a top pick within the China consumer sector, reflecting confidence in its performance amid the recovering tourism landscape.

Market Activity: The report includes details on short selling activities and stock performance, highlighting the dynamics in the market related to these companies.

Tourism Industry Growth: The tourism sector is increasingly aligned with China's goals for enhancing well-being and happiness, with projections indicating domestic tourism consumption will rise from 13% in 2023 to 18% by 2030, contributing significantly to GDP growth.

Revenue Projections: Morgan Stanley forecasts that the tourism industry's revenue will reach RMB12 trillion by 2030, with its GDP contribution increasing from 4.8% in 2024 to 6.7%.

Investment Recommendations: Investors are encouraged to capitalize on the growing tourism demand, with Morgan Stanley highlighting five key stocks, including AIR CHINA and TRIP.COM-S, as potential beneficiaries.

Market Insights: The report also notes the short selling activity and market performance of the recommended stocks, indicating investor sentiment and market dynamics within the tourism sector.

Antitrust Investigation Impact: China's State Administration for Market Regulation is investigating TRIP.COM-S, leading to significant short selling and concerns about its effects on the hotel industry, particularly chain hotels like HWORLD-S and Atour.

Potential Benefits for Hotels: There is speculation that reduced commission rates from online travel agencies (OTAs) could benefit hotels, but CLSA warns that the powerful network effects of OTAs may prevent a significant shift in booking volumes to hotel apps.

Revenue Implications: Hotels might lower room prices due to savings from OTAs, which could result in a decrease in revenue per available room (RevPAR), impacting overall earnings.

Market Outlook: CLSA predicts continued hotel openings in China, including independent hotels, but suggests that the growth trend in average RevPAR may be limited, favoring Atour over HWORLD-S due to differing sensitivities to RevPAR trends.

BrainCo Financing: BrainCo, a Chinese company focused on brain-computer interface technology, has secured RMB2 billion in funding, making it the second-largest financing round globally after Neuralink.

Investors Involved: Notable investors in this financing round include IDG, LENS, HWORLD-S, LY ITECH, and TAL Education.