This article only represents the author's own views.
Online travel agent Tongcheng-Elong Holdings Ltd.’s (0780.HK) third-quarter results announced this week were bumpy at best, hobbled by slumping tourism as a result of recurring Covid-19 flareups around China. That uneven performance has led to differing opinions on the company’s outlook: Some believe more stringent anti-Covid measures will follow the Beijing Winter Olympics next February, which would drag down the entire tourism industry. But others point out the company will continue to benefit from the support of its “giant” business partners. Still, the highest target price for the company in a survey of investors is HK$23 ($2.95), about 30% higher than its current share price, meaning analysts see some but not a huge amount of upside potential.
Tongcheng-Elong's revenue increased by a tiny 1.3% year-on-year in the third quarter to 1.94 billion yuan ($310 million), but decreased 9.3% from the previous quarter. Its profit fell by 8.7% year-on-year to about 230 million yuan, and its adjusted net profit decreased by a similar 5.6% to 351 million yuan. The company said travel demand in China began to rise in early July, helping the tourism industry to rebound strongly. But the appearance of Covid-19 Delta infections in Nanjing in July, followed by its spread to other Chinese cities, led to travel restrictions in various provinces and cities, dampening demand during the usually busy summer period.