中金：维持香港中旅 “中性” 评级 升目标价至 1.8 港元
CICC maintains a "Neutral" rating on CHINA TRAVEL HK, raising the target price by 20% to HKD 1.8, which corresponds to a 27 times P/E for 2026. Considering the company's plan to divest its tourism real estate, the expected profit for 2025 will be revised down from HKD 140 million to a loss of HKD 50 million, but the profit for 2026 is raised by 8% to HKD 370 million. The divestment of tourism real estate will help improve profitability and resource allocation, while the company has acquired 100% equity in Songhua Lake Resort, further strengthening its position as a tourism destination investment operator
According to the Zhitong Finance APP, China International Capital Corporation (CICC) released a research report stating that considering the one-time loss from the divestiture of the tourism real estate business in 2025, but with the expectation of enhancing subsequent profits, it has lowered the profit forecast for China Travel (00308) in 2025 from HKD 140 million to a loss of HKD 50 million, while raising the profit forecast for 2026 by 8% to HKD 370 million. The current stock price corresponds to a 25 times P/E ratio for 2026. The rating is maintained at neutral. Considering the normalization of profits in 2026, the valuation has switched to 2026, and taking into account the suggested cash distribution and the company's continued strengthening of its position as a tourism destination investment operator, the target price has been raised by 20% to HKD 1.80, corresponding to a 27 times P/E ratio for 2026, with an upside potential of 8%.
CICC's main points are as follows:
Company Status
The company plans to divest its tourism real estate business, which is expected to improve profitability and optimize resource allocation. The progress in tourism destination investment operations is good, having signed an agreement to acquire 100% equity of the Songhua Lake Resort, and some destinations under its management performed well during the National Day and Mid-Autumn Festival holidays.
Divesting tourism real estate and focusing on core business is expected to improve profitability and optimize resource allocation
The company plans to divest its tourism real estate business through a suggested distribution method, with the tourism real estate business recording after-tax losses of HKD 460 million, HKD 240 million, and HKD 190 million in 2023, 2024, and 1H25, respectively. CICC believes this divestiture is expected to improve the company's profitability and reduce the debt ratio, as well as help the company allocate more resources to its core business. The suggested distribution includes physical distribution and cash alternatives, where the controlling shareholder chooses physical distribution, while other shareholders can choose not to accept physical distribution and receive a one-time cash benefit of HKD 0.336 per share (approximately 20% of the closing price on October 13, paid by the controlling shareholder). In addition, the company expects this suggested distribution to generate a one-time loss of HKD 160 million, mainly due to the reallocation of cumulative exchange differences.
Announcement of the signing of the equity transfer agreement for Songhua Lake Resort, further expanding the tourism destination layout
On September 30, the company announced the acquisition of 100% shares of Songhua Lake Resort Company and Wan Bingxue Company (which manages a total of 9 ski resorts) for a consideration of HKD 295 million and HKD 5 million, respectively, and will also assume bank loans of HKD 755 million from Songhua Lake Resort Company. CICC believes this acquisition is expected to further enhance the company's leisure vacation tourism destination layout and improve its management service capabilities. The annual visitor volume during the stabilization period of Songhua Lake Resort exceeds 350,000, with revenue exceeding HKD 300 million. The after-tax profits for 2024 for the two companies are expected to be HKD 9.96 million and HKD 230,000, respectively, and attention is recommended for the company's subsequent operational management empowerment progress for this project.
Outstanding tourism operation capabilities, with some destinations performing well during the National Day and Mid-Autumn Festival holidays
The company innovatively optimizes the cultural tourism experience through IP linkage, intangible cultural heritage activities, digital immersion halls, etc. During the National Day and Mid-Autumn Festival holidays, China Travel International scenic spots received over one million visitors, with the Lushan Xiufeng Cableway and Tianshan Tourism Corridor receiving over 100% more visitors compared to the same period last year. The visitor volume at Songhua Lake Resort has steadily increased, and many boutique hotels have achieved a 100% occupancy rate for several days.
Risk Warning: Consumer recovery may be less than expected; optimization of existing projects and expansion of new projects may be less than expected
