Hong Kong stock market review: continues to be sold off
The Hong Kong stock market continues to sell off consumer stocks, with TONGCHENGTRAVEL's stock price falling in the past two months. However, Trip.com is supported by the recovery of outbound travel business, and is expected to achieve a year-on-year growth of about 15% in Q2/Q3. Air ticket and hotel booking volumes have gradually recovered, and the international platform Trip.com is also expected to become a high-growth business. Ctrip holds a 15% stake in the Indian OTA leader MakeMyTrip, and the market remains cautious about domestic demand
Consumer stocks continue to be sold off. Among them, TONGCHENGTRAVEL, which saw its stock price surge nearly 50% in the first 5 months, has retraced back to its original level within a short period of two months, turning from a rise to a fall for the year.
Of course, part of TONGCHENG's decline is due to the company's expansion into outbound business, with the market concerned that subsidies will drag down profit margins, while domestic tourism also faces an oversupply situation.
In comparison, Trip.com has pulled back nearly 20% from its high, but still maintains a 30% increase for the year, supported by the recovery of its high-profit outbound business.
According to data, industry air ticket bookings slowed from a year-on-year growth of 5-6% in Q2 to low single-digit growth in the first two weeks of July. The soft data may be due to the earlier start of last year's summer vacation by a week, or more outbound travel.
Considering more visa-free policies this year, further resumption of international flights, and special events such as the Olympics, Trip.com's outbound travel will continue to maintain high growth. Air ticket and hotel booking volumes have recovered to around 90-95% of 2019 levels in Q1, exceeded 100% in Q2, and will also surpass this number in Q3, with the international platform TRIP.COM-S expected to be a high-growth business.
Currently, the market expects Trip.com to record about 15% year-on-year growth in Q2/Q3, but the key lies in whether profit margins will improve, demonstrating a better leverage effect.
It is worth mentioning that India's leading OTA MakeMyTrip hit a new high in its stock price yesterday after its quarterly performance, with a year-to-date increase of over 100%, and Trip.com holds a 15% stake in it with approximately 46% of the voting rights. Nevertheless, there are still many concerns in the market about domestic demand, and whether Trip.com's stock price can be supported at this level remains somewhat uncertain