TravelSky Technology Limited

TravelSky reported first-half 2024 operating revenue of approximately RMB4.042 billion, up 22.2% year over year. Operating costs were RMB2.535 billion, up 16.4% year over year. Net profit attributable to shareholders was approximately RMB1.377 billion, up 14% year over year, and basic and diluted EPS were RMB0.47, up 14.6% year over year. The company processed approximately 352 million passenger transactions, up about 24% year over year and 4.4% versus the same period in 2019. Looking ahead, management said full-year revenue growth should remain strong, second-half costs will be higher than first half, and full-year profit should still grow well; they also said the gap between first- and second-half costs should be more balanced this year.

Chairman and General Manager Huang Rongshun described the first half as a period of recovery-driven growth, with TravelSky benefiting from the steady rebound in China’s civil aviation market. He emphasized core business expansion, technology innovation, and reforms, highlighting wins in aviation IT, airport systems, overseas market coverage, patents, and smart airport deployment. His tone was confident and constructive, with repeated references to opportunities in digital aviation, Belt and Road markets, and AI-enabled products.

CFO John Xue said H1 revenue, costs, and profit all grew strongly, driven by the rebound in civil aviation demand. He noted that total operating cost rose 16.4%, but also warned that operating costs are typically higher in the second half because of the project implementation and acceptance cycle. On tax, he said TravelSky already benefits from a 15% tax rate as a national high-tech company and may receive an additional 5% national key software benefit in the second half, potentially bringing the rate to 10%. He also explained that labor cost rose due to R&D capitalization, higher employee benefits, and uneven compensation timing, while cash remains abundant at RMB9.6 billion and the company has historically paid out about 40% of net profit as dividends.

Analysts focused on whether system integration growth can be sustained, why labor costs rose, why other revenue declined, the outlook for international route recovery, dividend policy, cash usage, commission growth versus passenger growth, tax, and equity incentives. Management said system integration should keep growing, but it is cyclical and can be uneven because of bidding and project timing; labor costs should remain stable for the full year despite a 5% to 10% historical annual compensation increase. On capital returns, management said the dividend payout policy has been stable at about 40% of net profit, while cash is being held to support upgrades, new business, and strategic investment. On international routes, management said recovery remains uneven and uncertain, but market share has not changed materially and foreign carrier pullbacks should have only a limited impact.