Investment Rating - The report assigns an "Buy" rating for Ctrip Group-S (09961.HK) [6] Core Insights - The report highlights the significant growth potential in service consumption in China, with a shift from physical goods to services as income levels rise, indicating a large room for growth compared to developed countries [2][22] - The tourism market is experiencing a strong recovery, with increasing consumer willingness to spend on travel, particularly in cross-border tourism, which is expected to further elevate tourism consumption levels [2][28] - Ctrip's competitive positioning is strengthened by its early entry into the OTA market, extensive resource accumulation, and a robust global expansion strategy [3][4] Summary by Sections 1. Service Consumption Rise and Online Travel Growth Potential - The trend from physical to service consumption is evident, with service consumption in China still having significant growth potential compared to developed nations [2][22] - Domestic tourism is rebounding strongly, with 2024 domestic travel expected to reach 5.615 billion trips, a 14.8% increase year-on-year [28] - Cross-border travel is recovering, with 2024 seeing nearly 95 million outbound trips, a 52% increase from the previous year, indicating a strong demand for international travel [33][37] 2. Ctrip: Competitive Advantages and Product Strength - Ctrip has a first-mover advantage in the OTA market, with a comprehensive resource base and strong brand recognition [3][59] - The company is leveraging its technological capabilities to enhance user experience and product offerings, focusing on high-end market segments [3][64] - Ctrip's global strategy includes significant investments in overseas markets, particularly through its brands Trip.com and Skyscanner, which are gaining traction in the Asia-Pacific region [4][64] 3. Profit Forecast and Investment Recommendations - Ctrip is projected to achieve revenues of 528.5 billion, 609.49 billion, and 682.46 billion yuan from 2024 to 2026, with corresponding net profits of 166.53 billion, 181.65 billion, and 208.52 billion yuan [10][11] - The report anticipates a compound annual growth rate (CAGR) of 13.6% for the online travel market from 2023 to 2026, driven by increasing internet penetration and service consumption [56][58]

Investment Rating - The investment rating for the company is "Outperform the Market" (maintained) [2] Core Views - The report highlights that Ctrip Group has achieved a doubling stock performance in 2024, with a 95% increase in Hong Kong stocks, driven by sustained travel demand and improved operational efficiency compared to pre-pandemic levels [4][5] - The resilience of domestic travel demand is supported by government policies aimed at boosting cultural and tourism consumption, with a notable increase in domestic travel participants and revenue growth [4][10] - The company's hotel business is expected to stabilize in pricing, with a projected recovery in hotel room rates in 2025, supported by increased online penetration and demand [4][25] - Ctrip's outbound tourism segment is anticipated to contribute significantly to growth, with international flight capacity recovering and a projected 17% increase in international flights in 2025 [4][50] Summary by Sections Company Overview - Ctrip Group has positioned itself as a leading player in the online travel agency (OTA) sector, benefiting from a strong recovery in domestic and outbound travel markets [3][4] Financial Performance - In the first three quarters of 2024, Ctrip's revenue grew by 19%, and Non-GAAP net profit increased by 44% compared to the previous year [4][5] - The company has maintained a stable commission rate for hotels, with expectations for room rates to stabilize in 2025 [25][34] Market Trends - The report notes a shift in consumer behavior towards experiential travel, with domestic tourism showing a double-digit growth in participants [10][17] - Ctrip's online penetration in the hotel sector is expected to improve, with a current online booking rate of approximately 40% for hotels compared to over 70% in the US [4][26] Future Outlook - The report anticipates that Ctrip's international business will continue to expand, with a focus on enhancing its market share in outbound travel as international flight capacities recover [44][50] - Government policies aimed at boosting service consumption and tourism are expected to provide a favorable environment for Ctrip's growth in 2025 [10][12]

Investment Rating - The report assigns a "Buy" rating to Trip.com Group with a target price of HKD 597.7, representing a 7.60% upside from the current price of HKD 555.5 [4][13] Core Views - Trip.com Group's 3Q24 performance exceeded expectations, driven by strong growth in domestic and outbound travel demand [2] - The company's international OTA platform Trip.com saw hotel and flight bookings grow over 60% YoY, with outbound travel recovering to 120% of 2019 levels [2] - Trip.com Group is well-positioned to benefit from the recovery of outbound travel, supported by increasing flight capacity and visa facilitation [10] - The company's domestic travel business is expected to grow further due to the resilience of travel demand and increasing online penetration [3] - Trip.com's international business is in a rapid growth phase, with significant potential for expansion and synergies between domestic and international operations [13] Business Performance - In 3Q24, Trip.com Group achieved total revenue of RMB 15.9 billion, up 15.5% YoY, with adjusted EBITDA of RMB 5.7 billion, up 23.9% YoY, and Non-GAAP net profit of RMB 6.0 billion, up 21.8% YoY [2] - Segment revenue breakdown: Accommodation booking revenue grew 21.7% YoY to RMB 6.8 billion, transportation ticketing revenue increased 5.3% YoY to RMB 5.7 billion, package tour revenue rose 17.3% YoY to RMB 1.6 billion, and corporate travel management revenue grew 11.0% YoY to RMB 0.7 billion [2] - Trip.com's international OTA platform contributed approximately 9% of total revenue, with Asia-Pacific market revenue growing over 70% YoY [11] Industry Trends - Domestic travel in China has shown strong recovery, with 2023 domestic trips reaching 4.9 billion, recovering to 81.4% of 2019 levels, and total spending recovering to 85.7% of 2019 levels [3] - Online travel booking users in China reached 500 million by December 2023, accounting for 46.6% of total internet users, indicating significant growth potential for online travel platforms [3] - Outbound travel is expected to reach 130 million trips in 2024, recovering to 84% of 2019 levels, driven by increasing flight capacity and visa facilitation [10] Financial Projections - Revenue is projected to grow to RMB 55.3 billion in FY24E and RMB 62.9 billion in FY25E, with Non-GAAP net profit expected to reach RMB 17.1 billion in FY24E and RMB 18.9 billion in FY25E [7][13] - EPS is forecasted to be RMB 25.02 in FY24E and RMB 27.79 in FY25E, with P/E ratios of 20.6x and 18.6x respectively [7][13] - The company's ROE is expected to improve to 11.31% in FY24E and 11.23% in FY25E, reflecting strong profitability and efficient capital utilization [16]

Investment Rating and Target Price - The report initiates coverage on Trip.com Group (9961 HK) with a "Buy" rating and a target price of HKD 582.2 [1] - The target price is based on an 18x PE multiple for 2025, reflecting a discount to the peer average of 21.9x due to recent valuation increases in US peers [6] Core Investment Thesis - Trip.com is a global leader in the OTA (Online Travel Agency) industry, with a strong position in China's high-end travel market and rapid global expansion [1] - The company benefits from increasing online penetration in domestic travel and structural growth in outbound travel, with its international platform Trip.com in a rapid growth phase [1] - Domestic market stability, rising profitability from outbound travel, and operational efficiency improvements are expected to drive sustained profit growth [1] Market Outlook and Industry Trends - Domestic tourism in China has recovered to 92% of 2019 levels in terms of trips and 100% in terms of revenue as of Q3 2024, with outbound and inbound travel expected to reach 80% of 2019 levels by 2024 [2] - China's tourism online penetration rate was 37% in 2022, significantly lower than the global average of 66%, indicating room for OTA platforms to outperform the broader tourism market [2] - Outbound travel is expected to benefit from international flight capacity recovery and policy support, with structural growth driven by expanding travel radius and increasing penetration in lower-tier cities [2] Accommodation Business - Trip.com has a strong foothold in China's high-star hotel market, with a stable supply chain and high user stickiness in high-tier cities [3] - The company's accommodation business is expected to maintain high growth from 2024-2026, driven by further online penetration in domestic hotels and rapid growth in overseas hotel bookings [3] - Trip.com's ADR (Average Daily Rate) and Take Rate are expected to remain stable, supporting revenue growth [3] Transportation Business - Transportation services, a key traffic driver for Trip.com, accounted for 56% of China's online air ticket booking market in 2019 [4] - Domestic transportation growth is expected to align with industry trends, while outbound travel demand is expected to drive higher-margin international ticket sales [4] - The business model relies on cross-selling to higher-margin accommodation and travel services, with over 30% of transportation users converting to other services as of H1 2024 [80] Financial Performance and Valuation - Revenue is forecasted to grow at a CAGR of 17% from 2024-2026, reaching RMB 72.5 billion in 2026, with adjusted net profit growing at a CAGR of 22% to RMB 23.6 billion [6] - The company's adjusted net profit margin improved significantly to 29.4% in 2023, up from 7.0% in 2022, driven by strong revenue recovery and cost control [45] - Trip.com's EV/EBITDA multiple is expected to decline from 11.3x in 2024 to 7.3x in 2026, reflecting improving profitability and cash flow [8] International Expansion - Trip.com's international platform, Trip.com, is in a rapid growth phase, with international OTA platform revenue growing 60% YoY in Q3 2024 [34] - The company aims to increase the contribution of international business to 40-50% of total revenue, leveraging its strong position in the Asia-Pacific region and growing outbound demand from China [72] Competitive Positioning - Trip.com maintains a strong competitive position in China's high-end travel market, with a differentiated brand image compared to competitors like Meituan and Tongcheng, which focus on lower-tier markets [21] - The company's high ADR (Average Daily Rate) in the accommodation segment, averaging RMB 331, is significantly higher than competitors, supporting its leading position in GMV (Gross Merchandise Value) [68]

Investment Rating - The report maintains a "Buy" rating for both the US-listed (TCOM) and Hong Kong-listed (09961 HK) shares of Trip com Group [5] Core Views - Trip com Group reported strong 3Q24 results with net revenue of RMB 15 9 billion (+16% YoY +32% QoQ) and non-GAAP net profit of RMB 6 billion (+22% YoY) [2] - The company's gross margin improved by 0 3 percentage points YoY to 82 4% in 3Q24 [2] - Outbound travel recovery led the industry with overseas hotel and flight bookings reaching 120% of pre-pandemic levels in 2019 [3] - International OTA platform hotel and flight bookings grew over 60% YoY with APAC bookings up more than 70% [3] Business Segment Performance - Accommodation revenue grew 22% YoY to RMB 6 8 billion in 3Q24 [2] - Transportation revenue increased 5% YoY to RMB 5 7 billion in 3Q24 [2] - Package tour revenue rose 17% YoY to RMB 1 6 billion in 3Q24 [2] - Corporate travel revenue grew 11% YoY to RMB 656 million in 3Q24 [2] Financial Projections - Non-GAAP net profit is forecasted to grow 32% 21% and 16% in 2024 2025 and 2026 respectively reaching RMB 24 2 billion by 2026 [3] - Revenue is expected to grow at a CAGR of 15 7% from 2024 to 2026 reaching RMB 69 6 billion in 2026 [4] - The company plans to enhance shareholder returns in 2025 potentially combining share buybacks with dividends [3] Valuation - The report assigns a 16X PE multiple for 2025 valuing the US-listed shares at $67 44/ADS and HK-listed shares at HK$524 87/share [3] Key Financial Metrics - ROE is projected to improve from 11 4% in 2024 to 12 0% in 2025-2026 [10] - Net margin is expected to remain stable at around 31 5% from 2024 to 2026 [10] - The company's cash position is forecasted to grow from RMB 43 4 billion in 2024 to RMB 76 5 billion in 2026 [8]

Investment Rating - Buy (Maintained) [1] Core Views - Trip com Group-S (09961 HK) reported strong Q3 2024 results with net revenue of RMB 15 9 billion up 16% YoY and adjusted EBITDA of RMB 5 7 billion with a margin of 36% up 2pct YoY Adjusted net income attributable to shareholders was RMB 6 billion up 22% YoY both exceeding Bloomberg consensus [1] - Domestic hotel ADR showed signs of stabilization with the YoY decline narrowing from double digits to low single digits in Q3 2024 The company's hotel occupancy rate in Q4 has surpassed the same period in 2023 and is expected to achieve better YoY growth in domestic hotel revenue [2] - Outbound travel continued to grow strongly with international flight capacity recovering to 80% of 2019 levels and outbound hotel and flight bookings reaching 120% of 2019 levels The company is expected to maintain rapid growth in outbound travel as international flights further recover [2] - Trip com the company's international platform saw significant growth in Q3 2024 with flight and hotel bookings increasing over 60% YoY contributing approximately 9% to total revenue Bookings from the Asia-Pacific region grew over 70% YoY Trip com has become the top OTA app in markets including South Korea Singapore Malaysia and Thailand [3] - Inbound travel also grew rapidly with inbound hotel bookings increasing approximately 100% YoY in Q3 2024 The expansion of visa-free policies is expected to further drive Trip com's growth [3] - Despite ongoing investments in international operations the company's Q3 2024 gross margin remained stable at 82% and adjusted operating profit margin increased by 2 3pct YoY to 34% exceeding expectations [3] Financial Forecasts and Valuation - Revenue is projected to grow from RMB 52 947 million in 2024E to RMB 67 055 million in 2026E with YoY growth rates of 18 96% 15 06% and 10 07% respectively [1] - Net income attributable to shareholders is expected to increase from RMB 16 680 million in 2024E to RMB 20 134 million in 2026E with YoY growth rates of 68 18% 10 20% and 9 54% respectively [1] - Non-GAAP net income attributable to shareholders is forecasted to grow from RMB 17 553 million in 2024E to RMB 20 945 million in 2026E with YoY growth rates of 34 29% 9 33% and 9 14% respectively [1] - EPS is projected to increase from RMB 24 40 in 2024E to RMB 29 46 in 2026E [1] - The company's P/E ratio based on the latest diluted EPS is expected to decrease from 19 06x in 2024E to 15 79x in 2026E [1] Market and Financial Data - The stock's closing price was HKD 500 00 with a 52-week range of HKD 251 40 to HKD 548 50 [6] - The company's market capitalization was HKD 341 763 89 million with a P/B ratio of 2 46x [6] - Total assets are projected to grow from RMB 247 738 51 million in 2024E to RMB 304 491 75 million in 2026E [11] - Net cash flow from operating activities is expected to increase from RMB 20 860 13 million in 2024E to RMB 23 885 32 million in 2026E [11]

Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Views - The report highlights that the company's Q3 2024 performance significantly exceeded expectations, driven by strong growth in international business [2] - The company's revenue for Q3 2024 reached 15.9 billion HKD, representing a year-over-year increase of 15.5%, slightly above Bloomberg consensus expectations [2] - Non-GAAP net profit for Q3 2024 was 6 billion HKD, up 21.7% year-over-year, and significantly higher than Bloomberg consensus expectations by 24.9% [2] - The report emphasizes that outbound and international business remain the main drivers of the company's performance growth, with international hotel and flight bookings surpassing 60% year-over-year growth [2] Financial Performance Summary - Q3 2024 revenue by segment: - Accommodation booking revenue: 6.8 billion HKD (yoy +21.7%) - Transportation ticketing revenue: 5.7 billion HKD (yoy +5.3%) - Vacation business revenue: 1.6 billion HKD (yoy +17.3%) - Business travel management revenue: 660 million HKD (yoy +11.0%) - Other business revenue: 1.2 billion HKD (yoy +40.9%) [2] - The company expects revenues of 52.8 billion, 60.7 billion, and 69.3 billion HKD for 2024, 2025, and 2026, respectively, with year-over-year growth rates of 18.4%, 15.1%, and 14.1% [4][6] - The projected adjusted net profits for 2024, 2025, and 2026 are 17.7 billion, 19.8 billion, and 23 billion HKD, respectively, with year-over-year growth rates of 35.7%, 11.4%, and 16.4% [4][6] Key Financial Metrics - Major financial indicators for 2023A, 2024E, 2025E, and 2026E: - Revenue: 44.6 billion, 52.8 billion, 60.7 billion, 69.3 billion HKD - Non-IFRS net profit: 13.1 billion, 17.7 billion, 19.8 billion, 23 billion HKD - Gross margin: 82% for 2024E and 2025E, 81% for 2026E - P/E ratio: 26.2 for 2023A, decreasing to 14.9 by 2026E [4][6]

Investment Rating - The report maintains a "Buy" rating for Trip.com Group (9961 HK/TCOM US) with an updated target price of HKD 571 (9961 HK) and USD 73 (TCOM US) based on a 16x 2025 P/E ratio [1][3][6] Core Views - Trip com Group s 3Q24 net profit exceeded expectations by 40 25 compared to the report s and market estimates respectively driven by improved operational efficiency and effective cost control [1][2] - The company s domestic hotel ADR decline narrowed to low single digits while supply increased by approximately 7 YoY International hotel and air ticket bookings exceeded 2019 levels by over 20 [1][2] - The report is optimistic about Trip com s steady growth prospects in 2025 with expected revenue growth of 16 and adjusted net profit margins maintaining above 30 [3] Business Segment Highlights - **Accommodation Booking**: Domestic hotel ADR decline narrowed to low single digits compared to a double digit decline in 2Q24 Domestic platform hotel supply grew 6 7 YoY [2] - **Transportation Ticketing**: Revenue growth accelerated significantly compared to previous quarters contributing 36 of total revenue [2] - **Package Tours**: Revenue reached RMB 1 56 billion up 17 52 YoY QoQ recovering to 95 of 3Q19 levels Outbound package tour revenue grew over 100 YoY [2] - **Corporate Travel**: Revenue increased 11 4 YoY QoQ to RMB 660 million with continued growth in customer numbers [2] International Business - Outbound hotel and air ticket bookings exceeded 2019 levels by 20 while international passenger traffic recovered to 93 of 3Q19 levels [3] - Trip com s international OTA platform saw over 60 YoY growth in hotel and air ticket bookings with the Asia Pacific region accounting for approximately 70 of bookings Inbound hotel bookings grew 100 YoY [3] - International OTA platform revenue contributed 9 to the group s total revenue with cross selling rates from air tickets to hotels continuing to improve [3] Financial Forecasts - Revenue is expected to grow 16 YoY in 2025 driven by domestic supply advantages and higher user spending post pandemic 3Q24 user spending increased 20 compared to pre pandemic levels [3] - Adjusted net profit is projected to maintain above 30 with AI driven operational efficiency improvements [3] - Key financial metrics for 2025E include revenue of RMB 61 18 billion adjusted net profit of RMB 21 7 billion and an adjusted net profit margin of 35 5 [5][13] Valuation - The target price is based on a 16x 2025 P/E ratio reflecting confidence in the company s growth trajectory and profitability [3][6] - The report highlights Trip com s strong market position and operational efficiency as key drivers for its valuation [3]

Investment Rating - The investment rating for the company is "Outperform the Market" [4][18]. Core Insights - The company reported a 22% year-on-year increase in adjusted net profit for Q3 2024, exceeding Bloomberg consensus expectations. Revenue for Q3 reached 15.87 billion yuan, a 15.5% increase, also surpassing expectations [2][7]. - The domestic business is showing strong performance during the peak season, with significant growth in hotel bookings and international travel. The company is expected to continue expanding its market share in the domestic hotel sector [2][8]. - The international business is recovering rapidly, with outbound flight and hotel bookings surpassing 120% of 2019 levels, indicating a strong competitive advantage [2][8]. Financial Performance Summary - For 2024, the company expects revenues of 52.93 billion yuan, with a year-on-year growth of 18.9%. The adjusted net profit is projected to be 17.36 billion yuan, reflecting a 32.8% increase [3][14]. - The company’s EBITDA for Q3 was 5.68 billion yuan, a 22.9% increase, indicating improved operational efficiency and cost management [2][7]. - The company’s earnings per share (EPS) for 2024 is estimated at 25.40 yuan, with a price-to-earnings (P/E) ratio of 18.2 [3][14]. Business Segment Performance - Accommodation booking revenue reached 6.80 billion yuan, up 22%, while transportation ticketing revenue was 5.65 billion yuan, a 5% increase. The travel vacation segment generated 1.56 billion yuan, reflecting a 17% increase [2][8]. - The company is focusing on enhancing its international platform, with plans to increase marketing investments in Q4 to capitalize on the overseas travel peak season [2][8]. Future Outlook - The company has revised its revenue forecasts for 2024-2026 to 52.93 billion, 61.71 billion, and 71.25 billion yuan, respectively, indicating a positive growth trajectory [2][8]. - The adjusted net profit estimates for the same period have been increased to 17.36 billion, 19.72 billion, and 22.90 billion yuan, respectively, reflecting strong operational performance [2][8].

Investment Rating - The report maintains a "Recommend" rating for the company, with an adjusted PE of 17X/16X/13X for 2024-2026 [3][7] Core Views - The company's Q3 2024 performance exceeded expectations, with revenue reaching RMB 15.9 billion, a 16% YoY increase, and net profit attributable to shareholders of RMB 6.8 billion, a 47% YoY increase [2] - The strong summer travel demand drove high growth across all business segments, with accommodation booking revenue increasing by 22% YoY and 32% QoQ to RMB 6.8 billion [2] - Outbound travel business recovery surpassed market levels, reaching 120% of 2019 levels, with international OTA platform revenue growing 60% YoY, accounting for 9% of total revenue [2] - The company's gross margin improved to 82%, driven by the strong growth of hotel booking and international business segments, with Non-GAAP net profit margin reaching 38%, the highest in nearly a decade [3] Business Segments - Accommodation booking: Revenue of RMB 6.8 billion, up 22% YoY and 32% QoQ [2] - Transportation ticketing: Revenue of RMB 5.7 billion, up 5% YoY and 16% QoQ [2] - Travel vacation: Revenue of RMB 1.6 billion, up 17% YoY and 52% QoQ [2] - Corporate travel management: Revenue of RMB 700 million, up 11% YoY and 4% QoQ [2] Financial Projections - Revenue is expected to grow to RMB 52.4 billion in 2024, RMB 60.5 billion in 2025, and RMB 69.0 billion in 2026, with growth rates of 17.7%, 15.5%, and 14.0% respectively [5] - Non-GAAP net profit is projected to be RMB 19.2 billion in 2024, RMB 20.4 billion in 2025, and RMB 24.4 billion in 2026 [5] - Adjusted diluted EPS is forecasted to be RMB 28.04 in 2024, RMB 29.77 in 2025, and RMB 35.66 in 2026 [5] Profitability and Efficiency - The company's gross margin is expected to remain stable at around 82% from 2024 to 2026 [12] - Non-GAAP net profit margin is projected to increase from 32.99% in 2024 to 32.96% in 2026 [12] - ROE is forecasted to improve from 12.39% in 2024 to 12.57% in 2026, reflecting enhanced profitability and operational efficiency [12]