Daily Investment Strategy
Recommended Stock：Tongcheng（780）
Since 2023, the year of the border reopening, Trip.com’s stock has risen 107% while Tongcheng gained 2.5%. The firm focuses on third- and fourth-tier cities, benefiting from China’s push for domestic consumption. Its EPS is expected to grow 19-20% in 2025-2026, outpacing Trip.com’s 11%. We expect the stock to catch up. With China shows intention to boost consumption, we believe national consumption vouchers in the future maybe possible. Data shows strong interest in snow tourism (up 3x) and hot springs (up 178% MoM) since November. With over 87% of its users from non-first-tier cities, Tongcheng stands to benefit as these areas drive domestic travel spending. Target price: $22.8.
China plans to issue RMB3tn special treasury bond next year, according to Reuters
China will issue RMB3tn worth of special treasury bonds next year, according to reports from Reuters. This issuance aims to support various initiatives, including approx. RMB1.3tn allocated for the "two major" and "two new" programs. The "two major" refers to the implementation of significant national strategies and the enhancement of security capabilities in key areas, while the "two new" involves large-scale equipment upgrades and consumer product trade-in programs. Additionally, a substantial portion of the funds is expected to support the development of "new productive forces," with estimates suggesting over RMB1tn will be directed towards this goal. Following this announcement, A-share market surged during the Christmas holiday.
Wen Kit Kenny is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to:https://apps.sfc.hk/publicregWeb/indi/AJF244/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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