Near-Term Softness Leads to Lower Travel Demand but Long-Term Outlook Still Positive for Tongcheng

We expect Tongcheng Travel’s revenue to return to growth as China relaxes its reopening policies, which should allow its citizens to travel with fewer restrictions. We expect near-term revenue to increase modestly, driven by the recovery of the travel industry. Assuming no return of lockdown headwinds in China, we expect Tongcheng’s revenue to increase 10%-15% per year in the near- to midterm.