The act of acquisition is often simpler than the subsequent process of integration.
On the evening of June 29th, Tongcheng Travel (0780.HK) and Dida Chuxing (2559.HK) jointly issued a lengthy announcement. Nomura International will act on behalf of eLong, Inc., a subsidiary of Tongcheng Travel, to launch a voluntary conditional general cash offer for Dida Chuxing.
The offer price of HK$1.3875 per share represents a premium of approximately 12.8% over the closing price on the last trading day before the announcement, valuing the entire deal at nearly HK$1.424 billion. This is a significant sum.
Tongcheng Travel's decision to extend a cash lifeline to a ride-sharing company still mired in losses at this juncture appears somewhat unconventional.
On the final trading day of June, the two companies' stock performances presented an interesting contrast. Dida Chuxing's share price more than doubled at one point during the session, closing up 88.19%. In stark contrast, shares of the acquirer, Tongcheng Travel, fell 4.39%. Capital market investors cast their votes in this "polar opposite" manner.
For Dida Chuxing, this is tantamount to a rescue. This ride-sharing platform, which struggled to list on the Hong Kong Stock Exchange in 2024, has seen its share price decline continuously post-listing, shedding nearly 60% from its peak. With liquidity drying up, it was in desperate need of an external capital infusion. The emergence of Tongcheng Travel resembles the arrival of a "white knight."
What does this acquisition signify for Tongcheng Travel?
The Strategic Takeover and Shareholder Windfall
According to the June 29th announcement, shareholders who have already provided commitments collectively hold 53.7% of the shares, indicating that Tongcheng Travel's takeover of Dida Chuxing is highly likely to proceed. It is understood that the transaction will not lead to privatization, and Dida Chuxing will retain its Hong Kong-listed status post-completion. Additionally, Dida's eligible shareholders will receive a special cash dividend of HK$1.1745 per share.
Dida Chuxing, which has been operating in the ride-sharing sector for years, has faced challenges recently. In 2024, its operating revenue was 787 million yuan with a net profit of 1.004 billion yuan. By 2025, while revenue was 502 million yuan, profitability deteriorated sharply, with net profit attributable to shareholders plunging to 130 million yuan. Against this backdrop of weakening revenue generation, the stock market's reaction has been telling. Since its 2024 listing, Dida Chuxing's average daily trading volume has been persistently low, sometimes even falling below HK$1 million for the entire day, earning it the nickname "zombie stock" among investors.
Just before the acquisition announcement, Dida Chuxing was at its darkest moment since listing: its share price had long hovered around HK$1, and its total market capitalization had shrunk to less than one-third of its initial listing value. At this point, Dida had essentially lost its financing capability and liquidity in the capital markets. Tongcheng Travel's willingness to make a "high-premium" acquisition clearly indicates it is not focused on Dida's current profitability but rather its strategic position within the mobility landscape.
Dida Chuxing primarily provides ride-sharing services through its app, WeChat mini-programs, and to a lesser extent, partnerships with third-party platforms. Private car owners can pre-publish their trips on the platform, and passengers can book rides. The company uses sophisticated matching algorithms to connect passengers and car owners with similar travel times and directions. Its revenue mainly comes from service fees charged to private car owners providing rides.
Analysts note that Tongcheng Travel aims to expand its ground transportation business, particularly by enriching short-distance travel supply. Dida's mature ride-sharing network, especially its resource of 21 million drivers, is highly complementary to Tongcheng's existing business in terms of geography and city tiers. Currently, Tongcheng Travel uses an aggregation model in the shared mobility sector, where there remains significant room for improvement in efficiency and user experience. Acquiring Dida will substantially shorten the expansion timeline in this field, making it a strategic acquisition. Post-acquisition, Tongcheng Travel will achieve cross-selling between its ticketing, hotel, travel services, and ride-sharing offerings.
What Tongcheng Travel is acquiring for HK$1.424 billion is Dida Chuxing's ride-sharing network covering 366 cities across the country, 21 million certified private car owners, and a Hong Kong-listed platform with contracting performance. Whether this money is well-spent was partly indicated by the subsequent stock price movements of both companies. Furthermore, the market harbors several doubts. Firstly, Dida itself struggles with growth and profitability in a mature market, and its survival is essentially constrained by the industry leader, Didi. Secondly, Tongcheng Travel could enhance its shared mobility supply through other means, not necessarily requiring a full acquisition. Finally, the arrangement for a special dividend to Dida's eligible shareholders, while having a placating and incentivizing effect, raises questions about its rationale compared to investing funds into business development.
The five committing shareholders in this deal are the counterparties. Among them, 5brothers, established by co-founders including Song Zhongjie, Li Jinlong, Li Yuejun, Zhu Min, and Duan Jianbo, is also Dida's ultimate controlling shareholder. Leap Profit, Smart Canvas Investment Limited, and Star Celestial Holdings Limited trace their ownership back to NIO Capital, while NBNW Investment Limited is a family trust of Li Bin. Based on their shareholdings, the five co-founders are expected to cash out approximately HK$814 million (about 700 million yuan), while NIO Capital and Li Bin would receive HK$590 million (about 510 million yuan).
An Aggressive M&A Trajectory and Integration Hurdles
Taking a longer-term view reveals that Tongcheng Travel has been exceptionally active and generous in the capital markets in recent years. The acquisition of Dida Chuxing is merely a microcosm of its aggressive expansion strategy. Since establishing its "branding, lower-tier markets, globalization" strategy in 2022, Tongcheng Travel has been busy.
From 2022 to 2023, it focused on solidifying its offline presence and transportation infrastructure. During these two years, it spent nearly 1 billion yuan acquiring several leading local travel agencies, attempting to integrate offline traffic channels. More crucially, it invested approximately 300 million yuan for a stake in Hunan Airlines, securing valuable air transport resources. Although the shareholding is not large, this marked Tongcheng's entry into the upstream supply chain, attempting to build barriers and move beyond being just an online travel agency intermediary.
From late 2023 to 2024, it ventured into capital-intensive scenic spot assets. At the end of 2023, Tongcheng extended its reach into offline cultural tourism by acquiring a stake in Hainan's Yanoda scenic area. In 2024, it made another move to acquire Lanting Culture & Tourism. These two deals signaled Tongcheng's shift from a "light-asset" to a "heavy-asset" model. Industry observers believe controlling scenic spot resources is aimed at securing exclusive ticketing rights and secondary consumption scenarios, but this heavy-asset model has long payback periods and severely tests operational capabilities.
In 2025, its activity intensified with bold cross-border moves. In April 2025, Tongcheng Travel announced the acquisition of 100% of Wanda Hotel Management Company for approximately 2.497 billion yuan. This deal instantly gave Tongcheng operational management capabilities covering high-end hotels and a vast portfolio of hotel brands, addressing its短板 in the high-end hotel management sector. In July, Tongcheng Travel proposed to subscribe to new shares of Dalian Sun Asia for 956 million yuan and obtain 30.88% voting rights through a voting rights entrustment agreement, attempting to gain control of this listed company possessing marine park IPs (this issuance plan is still in process). Subsequently, in September, its subsidiary Yilong Network acquired 100% of Hainan Xinsheng Payment for 300 million yuan, securing a valuable payment license.
The first deal of 2026 was the acquisition offer for Dida Chuxing. In less than five years, Tongcheng Travel has spent roughly 7 billion yuan on acquisitions. The pieces of its puzzle are becoming clearer: it now possesses "mobility" (Dida, airlines), "accommodation" (Wanda hotel management, scenic spots), "travel" (travel agencies, cultural tourism), and "payment."
However, acquisition is easier than integration. Take Dalian Sun Asia as an example; its performance has been volatile, consistently struggling to maintain its listing status: it reported a loss of 76.6422 million yuan in 2022, a profit of 34.3768 million in 2023, a loss of 70.1822 million in 2024, and a profit of 27.2572 million in 2025. Although it reported a profit of 15.7044 million yuan in Q1 2026, its non-GAAP net profit was -7.558 million yuan. Clearly, consolidating Dalian Sun Asia's financials would likely be a drag on Tongcheng Travel's statements in the short term due to industry-specific factors and integration pains.
Additionally, issues such as the return on investment for Wanda Hotel Management, the construction of a payment ecosystem, and the need for continuous future investment will test the wisdom of Tongcheng Travel's management. If acquisitions fail to generate synergies on the business front, short-term asset inflation could become a future obstruction.
The Path Ahead: Following a Blueprint?
Comparing Tongcheng Travel's M&A path with that of Trip.com Group Limited (TRIP.COM-S) reveals many similarities. As the dominant leader in the hotel and travel industry, Trip.com's business landscape is no longer a simple booking tool but a full ecosystem covering air tickets (Qunar), hotels (Li Cheng, etc.), scenic spots (Trip.com Farm Stays, deep partnerships with attractions), its own ride-hailing service (Trip.com Car), proprietary payment (Trip.com Finance), overseas travel, and corporate travel. This is the classic "one-stop travel platform" playbook. Trip.com itself built its dominant position through continuous acquisitions in earlier years. Tongcheng Travel's current puzzle pieces almost replicate Trip.com's growth trajectory.
However, Tongcheng's acquisitions are not merely passive "following" and "completing the puzzle." Coinciding with Tongcheng's flurry of deals, Trip.com found itself on an anti-monopoly investigation list. According to information on the State Administration for Market Regulation (SAMR) website, in January 2026, based on preliminary investigations, SAMR initiated a case against Trip.com Group Limited for suspected abuse of market dominance in violation of the Anti-Monopoly Law. In March 2026, the Beijing Municipal Market Supervision Bureau, along with the Municipal Commerce Bureau and the Municipal Culture and Tourism Bureau, jointly interviewed and provided administrative guidance to Trip.com and 11 other platform companies, publicly announcing the first batch of issues identified since the comprehensive crackdown on "inward-rolling" competition among platforms and issuing rectification requirements. The reported issues mainly involved infringing on merchants' independent operating rights, setting unreasonable rules, false advertising, and shortcomings in some platforms' compliance management systems.
As Tongcheng Travel's development coincides with the broader context of "anti-monopoly" and "anti-inward rolling," it indeed provides a more favorable window of opportunity for this challenger. However, the question remains whether Tongcheng Travel can truly seize this development opportunity. After all, equity acquisition is just the first step; subsequent synergistic development poses an even greater test.
Of course, Trip.com and Tongcheng Travel themselves are closely connected. Trip.com is not only one of Tongcheng Travel's top two shareholders but has also appointed two directors, James Liang and Jiang Hao. The two companies maintain close business ties. In 2024, Tongcheng Travel paid Trip.com 270 million yuan in system maintenance fees and earned 2.9 billion yuan in commission income by leveraging Trip.com's resources.
Comments