Summary of Trip.com Group Ltd Conference Call Company Overview - **Company**: Trip.com Group Ltd (TCOM) - **Industry**: China Internet and Other Services - **Market Cap**: US$45.843 billion - **Stock Rating**: Overweight - **Price Target**: US$78.00, representing a 19% upside from the closing price of US$65.29 on August 27, 2025 Key Financial Highlights - **2Q25 Net Revenue**: Increased by 16% YoY to Rmb14.8 billion, 2% above Morgan Stanley estimates [2][3] - **Non-GAAP Operating Profit**: Rose by 10% YoY to Rmb4.7 billion, exceeding estimates by 10% [2][3] - **Adjusted Net Profit**: Increased by 1% YoY, also 10% above estimates [3] - **Operating Margin**: 31.4%, surpassing guidance of 29.1% [2][3] - **Share Repurchase Program**: New program approved for US$5 billion, approximately 11.7% of market cap [3] Segment Performance - **Accommodation Reservations**: Up 21% YoY to Rmb6.225 billion, 12% QoQ growth [3] - **Transportation Ticketing**: Increased by 11% YoY to Rmb5.397 billion, flat QoQ [3] - **Packaged Tours**: Decreased by 8% YoY to Rmb947 million [3] - **Corporate Travel**: Slight decline of 1% YoY to Rmb692 million [3] - **Others**: Grew by 31% YoY to Rmb1.471 billion [3] Market Outlook - **3Q25 Outlook**: Market focus expected to shift due to weak travel data during the summer holiday [3] - **Risks to Upside**: Potential rebound in macroeconomic growth and recovery in outbound travel [9] - **Risks to Downside**: Increased competition from Tongcheng Travel and Meituan, pandemic uncertainties, and macroeconomic slowdown [9] Valuation and Financial Metrics - **WACC**: 10.5%, aligned with lower bound of China Internet WACCs [8] - **Terminal Growth Rate**: 3%, aligned with long-term GDP growth target [8] - **Projected Revenue Growth**: Expected to reach Rmb61.245 billion in FY25 [4] - **Projected EPS**: Expected to be Rmb24.50 in FY25 [4] Additional Insights - **Gross Margin**: 81.0%, with slight fluctuations noted [3] - **Operating Income**: Increased by 15% YoY to Rmb4.102 billion [3] - **Net Income to Shareholders**: Increased by 76% YoY to Rmb4.846 billion [3] - **Diluted EPS**: Rmb6.97 for 2Q25, reflecting a 45% increase YoY [3] This summary encapsulates the key points from the conference call, highlighting the financial performance, market outlook, and strategic initiatives of Trip.com Group Ltd.

Core Insights - Ctrip Group reported a net revenue of 14.843 billion RMB for Q2 2025, representing a year-on-year increase of 16.22% [1] - The net profit attributable to shareholders for the same quarter was 4.846 billion RMB, showing a year-on-year growth of 26.43% [1] Revenue Breakdown - Accommodation booking revenue for Q2 2025 reached 6.2 billion RMB, reflecting a year-on-year increase of 21% and a quarter-on-quarter growth of 12% [1] - Transportation ticketing revenue was 5.4 billion RMB, with a year-on-year increase of 11% and stable quarter-on-quarter performance [1] International and Inbound Tourism - Ctrip's international OTA platform bookings grew by over 60% year-on-year in Q2 2025 [1] - Inbound tourism bookings saw a remarkable increase of over 100% year-on-year, driven primarily by demand from South Korea and Southeast Asia [1]

携程集团-S(09961)高开逾5%，截至发稿，涨5.66%，报541.5港元，成交额1.33亿港元。 消息面上，携程集团发布2025年二季度业绩，该集团取得净收入人民币148.43亿元(单位下同)，同比增 加16.22%；归属携程集团有限公司净利润48.46亿元，同比增加26.43%。公司指出，第二季度国际各业 务板块继续呈现强劲增长态势，国际OTA平台总预订同比增长超过60%；入境旅游预订同比增长超过 100%；出境酒店和机票预订已全面超越2019年疫情前同期的120%水平。 ...

Core Viewpoint - Ctrip Group (9961.HK) shares rose over 6%, reaching a new high of 544 HKD since February 17, driven by strong mid-year financial results [1] Financial Performance - For the six months ending June, the company reported a net profit attributable to shareholders of 9.123 billion RMB, an increase of 12.01% year-on-year, with basic earnings per share of 13.82 RMB [1] - Total revenue amounted to 28.714 billion RMB, reflecting a year-on-year growth of 16.21% [1] - In the quarter ending June, the net profit attributable to shareholders was 4.846 billion RMB, up 26.43% year-on-year, with basic earnings per share of 7.34 RMB [1] - Revenue for the quarter totaled 14.864 billion RMB, a year-on-year increase of 16.23%, exceeding expectations [1] - Adjusted EBITDA for the period was 4.9 billion RMB, compared to 4.4 billion RMB in the same period last year, with an adjusted EBITDA margin of 33%, down 2 percentage points year-on-year [1] Share Buyback Plan - The board of Ctrip approved a new share buyback plan in August, authorizing the repurchase of up to 5 billion USD (approximately 39 billion HKD) of issued ordinary shares and/or American Depositary Shares (ADS) [1]

Core Insights - Ctrip Group-S (09961) opened over 5% higher and is currently up 5.66%, trading at HKD 541.5 with a transaction volume of HKD 133 million [1] Financial Performance - For Q2 2025, Ctrip Group reported a net revenue of RMB 14.843 billion, representing a year-on-year increase of 16.22% [1] - The net profit attributable to Ctrip Group Limited was RMB 4.846 billion, showing a year-on-year growth of 26.43% [1] Business Growth - The company highlighted strong growth across its international business segments, with total bookings on the international OTA platform increasing by over 60% year-on-year [1] - Inbound travel bookings surged by over 100% year-on-year [1] - Outbound hotel and flight bookings have fully surpassed 120% of the levels seen in the same period in 2019, prior to the pandemic [1]

Group 1 - The Hang Seng Index opened down 0.68%, while the Hang Seng Tech Index fell by 0.99%. Ctrip Group saw a nearly 6% increase as the company was authorized to repurchase shares worth up to $5 billion [1] - According to Zhongtai International, despite a significant recovery in Hong Kong stock valuations, with the predicted PE of the Hang Seng Index restored to nearly the 80th percentile of the past seven years, external monetary policy uncertainty has decreased, and internal policies such as "anti-involution" and industrial support are being intensified, providing upward support for the market [1] - Guotai Junan Securities noted that with a rate cut in September likely, and considering that Hong Kong stocks have significantly retraced their excess relative to A-shares this year, the A-H market will return to a unified starting line, with changes in corporate earnings driving performance differences between the two markets [1] Group 2 - Huatai Securities released a strategy report on Hong Kong stocks, indicating that foreign capital still has room to continue increasing allocation to the Chinese market due to: 1) Overseas liquidity is likely to remain loose, influenced by monetary policy and financial regulation, with a trend towards softer dollar liquidity; 2) Improvement in domestic fundamental expectations and potential appreciation of the RMB [1] - It is important to note that the significance of foreign capital in the Hong Kong stock market has decreased, with southbound capital accounting for over 40% of trading in interconnectivity stocks, making the sustainability of future inflows even more worthy of attention [1]

Group 1 - The core viewpoint of the article highlights Ctrip Group's strong financial performance in Q2 2025, with a net revenue of 14.8 billion yuan, representing a 16% year-on-year growth [1] - In terms of business segments, accommodation booking revenue reached 6.2 billion yuan, up 21% year-on-year; transportation ticketing revenue was 5.4 billion yuan, an 11% increase; vacation revenue was 1.1 billion yuan, growing by 5%; and business travel management revenue was 692 million yuan, up 9% [1] - Ctrip's international OTA platform saw a more than 60% year-on-year increase in flight bookings, with inbound travel bookings doubling compared to the previous year, and outbound hotel and flight bookings recovering to 120% of 2019 levels [1] Group 2 - Ctrip's Executive Chairman Liang Jianzhang emphasized the importance of tourism as a key driver for economic development and cultural exchange, expressing confidence in the long-term growth prospects of the industry [1] - The company announced a new share repurchase plan, authorized to buy back up to 5 billion USD of its issued common stock and/or American Depositary Receipts, subject to market conditions and applicable laws [1]

Core Insights - Ctrip Group reported a net revenue of 14.8 billion RMB (2.1 billion USD) for Q2 2025, representing a year-on-year increase of 16% and a quarter-on-quarter increase of 7% [1] Revenue Breakdown - Accommodation booking revenue reached 6.2 billion RMB (869 million USD), up 21% year-on-year, driven by growth in accommodation bookings [1] - Transportation ticketing revenue was 5.4 billion RMB (753 million USD), an 11% year-on-year increase, primarily due to the rise in transportation ticket bookings [1] - Vacation business revenue amounted to 1.1 billion RMB (151 million USD), reflecting a 5% year-on-year increase, supported by growth in vacation bookings [1] - Business travel management revenue was 692 million RMB (97 million USD), up 9% year-on-year and 21% quarter-on-quarter, attributed to the increase in business travel orders [1] Profitability - Net profit attributable to Ctrip Group shareholders was 4.8 billion RMB (676 million USD), compared to 3.8 billion RMB in the same period of 2024 and 4.3 billion RMB in the previous quarter [1] Cash Position - As of June 30, 2025, the company had cash and cash equivalents, restricted cash, short-term investments, and held-to-maturity deposits totaling 94.1 billion RMB (13.1 billion USD) [2]

Financial Data and Key Metrics Changes - The company reported a net revenue of RMB 14.8 billion for Q2 2025, representing a 16% increase year over year and a 7% increase quarter over quarter, driven by strong travel demand across segments [30] - Adjusted EBITDA for Q2 was RMB 4.9 billion, up from RMB 4.4 billion in the same period last year, reflecting operational efficiency [34] - Diluted earnings per ordinary share were RMB 6.97, or USD 0.97, for Q2 2025, with non-GAAP diluted earnings at RMB 7.20, or USD 1.01 [34] Business Line Data and Key Metrics Changes - Accommodation reservation revenue increased by 21% year over year to RMB 6.2 billion, with a 12% increase quarter over quarter [30] - Transportation ticketing revenue was RMB 5.4 billion, an 11% year-over-year increase, remaining flat quarter over quarter [31] - Packaged tour revenue grew by 5% year over year and 14% quarter over quarter, driven by international tour offerings [32] Market Data and Key Metrics Changes - Inbound travel bookings increased by over 100% year over year, with national inbound arrivals growing by 30% [14][6] - International bookings on the platform rose by over 60% year over year, with strong contributions from the APAC region [17] - Outbound travel from China saw flight capacity recover to 84% of pre-pandemic levels, with outbound hotel and air bookings surpassing 120% of 2019 volumes [19] Company Strategy and Development Direction - The company aims to leverage AI technology to enhance travel planning and user experience, with a focus on personalized recommendations and content generation [9][42] - A commitment to empowering small and medium-sized enterprises in the travel sector through digital tools and marketing support is emphasized [8] - The company plans to expand its reach globally while focusing on inbound travel as a key growth engine, particularly as visa policies ease [16][76] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term prospects of the travel industry, highlighting the importance of travel for economic development and cultural exchange [11] - The company is focused on maintaining operational efficiency and cost discipline to deliver sustainable growth and long-term value [36] - Management noted that consumer sentiment remains resilient, with strong demand for experiential products and travel among various demographics [53] Other Important Information - The company launched a USD 100 million tourism innovation fund to support commercial innovation in travel [27] - A new share repurchase program was approved, allowing the company to repurchase up to USD 5 billion of its outstanding shares, reflecting confidence in long-term value [35][94] Q&A Session Summary Question: AI and content strategy - Management elaborated on the integration of AI and content, enhancing user experience through personalized recommendations and improved data processing efficiency [38][39] Question: Booking trends and cross-border travel - Management noted resilient demand in domestic travel and strong growth in outbound and inbound travel, with significant year-over-year increases [44][46] Question: Hotel and air ticket price trends - Management indicated that domestic hotel and air ticket prices faced pressure despite volume growth, with outbound air ticket prices softening year over year [49][50] Question: Consumer sentiment trends - Management observed strong volume growth across all markets, particularly for experiential products, despite slight decreases in average daily rates [52][53] Question: Competition landscape - Management emphasized a focus on service quality and comprehensive product offerings rather than engaging in price competition, aiming to maintain leadership in the travel industry [64] Question: Market potential for Old Friends Club and Travel Plus Entertainment - Management projected significant growth potential in these segments, estimating the market could exceed USD 1 trillion in the next few years [68][70] Question: Inbound travel potential - Management highlighted the substantial growth potential for inbound travel in China, which currently accounts for less than 0.5% of GDP compared to 1-2% in developed markets [76] Question: International expansion and marketing strategy - Management discussed the effectiveness of their marketing strategy, focusing on user acquisition through their mobile app, which accounts for 70% of global orders [85][90] Question: Shareholder return and buyback process - Management provided updates on the share repurchase program, indicating a commitment to enhancing shareholder returns through disciplined capital allocation [94][95]

Financial Data and Key Metrics Changes - The company reported a net revenue of RMB 14.8 billion for Q2 2025, representing a 16% increase year over year and a 7% increase from the previous quarter [31] - Adjusted EBITDA for the quarter was RMB 4.9 billion, up from RMB 4.4 billion in the same period last year [34] - Diluted earnings per share were RMB 6.97 or USD 0.97, with non-GAAP diluted earnings per share at RMB 7.20 or USD 1.01 [34] Business Line Data and Key Metrics Changes - Accommodation reservation revenue increased by 21% year over year to RMB 6.2 billion [31] - Transportation ticketing revenue was RMB 5.4 billion, an 11% year-over-year increase [32] - Packaged tour revenue grew by 5% year over year to RMB 1.1 billion, while corporate travel revenue increased by 9% year over year to RMB 692 million [32] Market Data and Key Metrics Changes - Inbound travel bookings increased by over 100% year over year, with national inbound arrivals growing by 30% [15][31] - International bookings on the platform rose by over 60% year over year, particularly strong in the APAC region [18][81] - Outbound travel from China saw cross-border flight capacity recover to 84% of pre-pandemic levels, with outbound hotel and air bookings surpassing 120% of 2019 volumes [21] Company Strategy and Development Direction - The company aims to leverage AI technology to enhance travel planning and user experience, with a focus on personalized recommendations and content generation [8][41] - A new initiative, Intellitrip, was launched to help hotels capture inbound demand and improve operational efficiency through AI-powered tools [23] - The company is committed to sustainability and innovation, launching a USD 100 million tourism innovation fund to support breakthroughs in travel [28] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term prospects of the travel industry, highlighting the potential for inbound travel to become a key growth engine [12][17] - The company noted that consumer sentiment remains resilient, with strong demand for experiential products and travel among various demographics [54] - Management emphasized the importance of maintaining high service quality and comprehensive product offerings in a competitive landscape [65] Other Important Information - The company has completed share repurchases totaling approximately USD 400 million and announced a new share repurchase program of up to USD 5 billion [35][96] - The balance of cash and cash equivalents as of June 30, 2025, was RMB 94.1 billion or USD 13.1 billion [35] Q&A Session Summary Question: Can you elaborate on the AI and content strategy? - The integration of AI enhances content delivery and user experience, allowing for personalized travel planning and improved data processing efficiency [38][40] Question: What are the booking trends observed this year? - Domestic travel shows strong volume growth, while outbound travel has recovered significantly, with inbound travel also seeing substantial growth [44][46] Question: How have hotel and air ticket prices trended recently? - Domestic hotel and air ticket prices faced pressure despite volume growth, while outbound travel prices softened due to increased flight capacity [49][50] Question: What insights can you share on consumer sentiment? - The market shows resilience, with strong demand for experiential products among various age groups, despite slight decreases in average daily rates [53][54] Question: How does the competition landscape look with new entrants? - The company focuses on providing excellent service and comprehensive offerings rather than engaging in price competition, which is crucial for customer satisfaction [65][66] Question: What is the potential market size for the Old Friends Club and Travel Plus Entertainment? - The Old Friends Club market could grow to over USD 1 trillion in the next few years, while demand for travel plus entertainment products is also strong [69][72] Question: Can you provide insights into the inbound travel potential? - Inbound travel currently accounts for less than 0.5% of China's GDP, indicating significant growth potential if effectively promoted [77][78] Question: What is the update on the marketing strategy for trip.com? - The company maintains a disciplined ROI-driven marketing strategy, focusing on acquiring app users and enhancing operational efficiency [85][91] Question: Can you provide an update on the share repurchase program? - The company has fully utilized its previous share repurchase quota and announced a new multiyear program to strategically buy back shares [93][96]