[ET Net News Agency, 6 August 2019] Citi Research lowered its target price for
Tongcheng-Elong (TCEL)(00780) to HK$21 from HK$23 and maintained its "buy" rating.
TCEL is scheduled to announce 2Q results on 19 August. The research house expects TCEL
to record a solid bottom line amid improvement on SG&A to revenue ratio given the labour
optimization.
Despite the solid volume growth, transportation revenue growth is likely to slow down
partially due to traffic support for the accommodation business where revenue should see
record-strong growth.
Citi also expects moderate MAU (monthly active user) growth but accelerating MPU
(monthly active user) growth. Given slower revenue growth outlook dragged by the
transportation segment, it lowered its earnings forecasts by 2%/4%/5% for 2019/20/21. (KL)