TC

20/08/2019 18:01

{I-bank focus}Morgan cuts Tongcheng-Elong (00780) to HK$17

[ET Net News Agency, 20 August 2019] Morgan Stanley lowered its target price for
Tongcheng-Elong Holdings (00780) to HK$17 from HK$19 and maintained its "overweight"
rating.
The research house said Tongcheng-Elong's revenue could decelerate further in 3Q with
lower transport take rate. Its 2Q revenue of Rmb1.59bn (+21%) was in line with Morgan's
estimate. Adjusted net profit of Rmb346mn (+60%) was 9% above Morgan's estimate, with
a net margin of 21.7%.
The company's full-year revenue guidance of 20-25% YoY assumes growth reacceleration in
4Q, driven by a more cross-selling and seasonal recovery in take rate. However, Morgan saw
broad-based slowdown across sectors in July.
It reduced its 2019-21 revenue estimates 4-8% but kept its net profit estimates largely
unchanged thanks to leverage on S&M expenses. (KL)

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