Robust growth of 38% in core profit; we are seeing all lines recovering
China Travel （HK） announced its interim results this evening. Total revenuewas HKD2,352m, yoy growth of 29%. Core profit （excluding valuation gainand investment property） was HKD311m, up 38%, reflecting strong growthmomentum for the core tourist attraction operations. In addition, net cash fromoperation was also up by 30% yoy. We are seeing revenue/profit recovering in allof its segments.
　　More details on each segment, hotel and tourist attraction outperformed
Tourist attraction business - revenue rose 51% to HKD1.22bn in 1H17 fromHKD810m in 1H16. Profit increased by 11% to HKD71m. The company'stourism destinations attracted a total of 5.2 million traffic in 1H17, anincrease of 8% yoy.
　　Hotel business - revenue increased by 5% to HKD363m in 1H17 fromHKD345m in 1H16. The attributable profit increased 58% yoy to HKD61m.
　　This was mainly driven by hotels in Hong Kong and Macau （RevPARincreased by 19%, revenue up by 12% and profit up by 92% yoy） as hotelindustry recovered.
　　Travel agency business - revenue grew 6% to HKD556m in 1H17 fromHKD526m in 1H16. Profit slightly increased by 1% to HKD66m.
　　Transportation business - revenue up by 53% to HKD213m in 1H17mainly due to the revenue contribution from Macau CTS Passenger RoadTransport, which is newly consolidated as a subsidiary of the company.
　　However, profit of transportation decreased by 13% yoy to HKD72m,mainly due to 1） price competition, 2） impact of the online car bookingservice and 3） rise in fuel price.