Summary of Ctrip Conference Call Company Overview - **Company**: Ctrip (Trip.com) - **Industry**: Online Travel Agency (OTA) Key Points and Arguments Domestic Hotel Booking Trends - In Q2, domestic hotel bookings maintained double-digit growth despite a year-over-year price decline, with the decline rate narrowing [2][3] - Hotel supply increased by 5%-10% year-over-year, indicating a clear trend of normalized demand growth [2][3] - Traffic maintained a steady double-digit growth, with expectations for continued normalized growth in domestic tourism [2][4] International Travel Recovery - Outbound travel capacity has recovered to approximately 80%-85%, with free travel, hotel, and flight recovery rates at 120%-125% [2][5] - Ctrip's international version saw a growth rate of about 60% in Q1, with a target of over 50% growth for the year [2][5] - Overall revenue growth is expected to maintain around 15% for the year [2][5] Revenue Composition and Future Goals - Domestic business accounts for 60%-65% of total revenue, outbound business approximately 15%, and pure overseas business 20% [2][6] - Trip.com contributed about 13% to total revenue, exceeding pre-pandemic levels [2][6] - The goal is for international business to contribute over 50% of total revenue in the next 3-5 years, with Trip.com aiming for around 20% [2][7] Hotel Revenue Structure - Trip.com has shifted from primarily ticket sales to hotel revenue, which now exceeds 40% and is expected to increase further [2][8] - A higher hotel revenue proportion is anticipated to positively impact Ctrip's profit structure [2][8] Seasonal Trends in Travel - The peak travel season for overseas and domestic tourism differs significantly, with Q4 being the peak for Trip.com due to major holidays [2][9][10] - Q3 is also busy due to summer vacations, while Q1 and Q2 are more fragmented with various regional holidays [2][9][10] International Route Recovery - Some routes in the Asia-Pacific region, such as Thailand, have not fully recovered to pre-pandemic levels, with recovery rates around 60%-70% [2][11] - Europe has largely recovered or surpassed 2019 levels, while some regions like Spain and Italy are still lagging [2][11] Foreign Tourist Preferences - Foreign tourists from the Asia-Pacific region prefer using Trip.com, while European and American tourists tend to use Booking.com [2][13] - Trip.com is the only platform allowing foreign tourists to book high-speed train tickets in China, providing a competitive advantage [2][15] Future Growth Expectations - Ctrip anticipates an increase in inbound tourism's contribution but aims to avoid over-reliance on the Chinese market [2][17] - The company plans to enhance brand awareness in the Asia-Pacific region to attract more foreign tourists [2][17] Financial Performance and Projections - Ctrip's international segment is expected to incur higher losses than last year, but this is within anticipated limits [2][21] - The budget and revenue expectations for 2025 align with initial forecasts, with a stable tax rate around 15% [2][22][23] Market Position and Competition - Trip.com has maintained profitability with an operating margin of 20-25% [2][26] - The company faces competition from traditional channels and aims to leverage its unique positioning and local language services to capture market share [2][27] Commission Rates and Monetization - Trip.com’s commission rates in overseas markets are lower than competitors, around 8%, to enhance competitiveness [2][28] - The company plans to gradually increase commission rates as the market expands while maintaining lower rates than competitors [2][28] Strategic Differences with Competitors - Trip.com has replicated its domestic competitive advantages in overseas markets, focusing on direct channels and strong supplier relationships [2][29][30] Additional Important Insights - The company emphasizes service quality and customer loyalty over price competition, which aligns with its long-term strategy [2][20] - The overall competitive landscape in the domestic OTA market remains stable, with a focus on enhancing customer experience rather than aggressive pricing strategies [2][20]

Core Viewpoint - The Hong Kong stock market is undergoing a transformation, with the AI industry cycle expected to lead the market upward, supported by strong capital inflows and a favorable policy environment [2][3]. Group 1: Market Trends - The Hang Seng Index opened down 0.05%, while the Hang Seng Tech Index fell by 0.34%, with Ctrip Group (09961) declining by 2% [1]. - Historical trends indicate that each market cycle has a leading industry, with the current AI industry cycle likely to drive the Hong Kong stock market upward [2]. Group 2: Capital Inflows and Valuation - Significant capital inflows from mainland China are enhancing the pricing power of Hong Kong stocks, with foreign capital gradually improving its allocation towards Chinese assets [2]. - The Hang Seng Index's price-to-earnings (PE) ratio has increased from approximately 7.5 times to 10.5 times, aligning with the ten-year average, indicating ongoing valuation recovery [3]. Group 3: IPO Market and Investment Opportunities - The year 2025 is anticipated to be a significant year for Hong Kong's IPO market, providing a crucial platform for domestic companies to raise foreign capital [3]. - The Hong Kong stock market is evolving into a global technology capital hub, attracting high-quality domestic tech companies and linking them with international capital [4]. Group 4: Policy Support and Market Structure - The Hong Kong government has implemented several policies to support the stock market, including lowering stamp duties and optimizing trading mechanisms to enhance liquidity and attractiveness [5]. - The influx of quality core assets into the Hong Kong market is expected to influence trading in the A-share market, potentially shifting pricing power southward [4].

Core Insights - The article highlights the increasing establishment of mother funds across various regions in China, focusing on sectors such as hard technology, new materials, artificial intelligence, information technology, biomedicine, low-altitude economy, smart equipment, new energy, semiconductors, and modern chemical industries [1][3][9]. Group 1: National and Local Initiatives - The establishment of the 300 billion yuan Chengtong Science and Technology Innovation Fund marks a significant entry of state-owned enterprises into venture capital, targeting hard technology investments [3][4]. - Local governments are also active, with Zhuhai launching a 500 billion yuan investment platform and Dongguan setting up a 10 billion yuan AI mother fund [1][7][13]. - Hubei plans to establish three 10 billion yuan seed funds to support innovation and entrepreneurship among university faculty and students [18][19]. Group 2: Fund Structures and Strategies - The Chengtong Fund aims to create a complete investment chain from technology breakthroughs to application scenarios, focusing on seed, startup, and growth-stage tech companies [4][5]. - The newly established 20 billion yuan industry guidance fund in Jingzhou will adopt a model of "stock integration + incremental capital injection" to support strategic emerging industries [9]. - The 100 billion yuan Guangdong Intelligent Industry Fund will leverage government and private capital to drive AI and smart manufacturing innovations [16][17]. Group 3: Sector-Specific Funds - The establishment of a 50 billion yuan hydrogen energy industry chain investment fund by Sinopec aims to support key materials and technologies in the hydrogen sector [14][15]. - The 20 billion yuan low-altitude economy fund in Suzhou will focus on equity investments and venture capital activities [10]. - The 90 billion yuan Taiping New Industry M&A Fund is positioned to facilitate strategic acquisitions in emerging industries [25]. Group 4: Innovative Financing Mechanisms - The first private venture capital "science and technology bond" has been issued in Shenzhen, indicating a new financing avenue for innovation-driven projects [24]. - The establishment of the 10 billion yuan tourism innovation fund by Ctrip aims to support breakthrough developments in the tourism sector [28]. - The 10 million yuan new energy storage industry fund in Shenzhen will focus on equity investments in the new energy storage sector [29].

Group 1 - Zhuhai Technology Industry Group Co., Ltd. was officially unveiled with a registered capital of 50 billion yuan, integrating major local state-owned enterprises to create a core platform for technological development in Zhuhai [2] - KKR announced the successful closing of its third phase of the KKR Innovation Fund, raising 1 billion USD, marking it as the largest AI-focused fund in Europe [3] - CATL announced its participation in the Fujian Times Zeyuan Equity Investment Fund, which has a total scale of 100 billion yuan, with CATL being a limited partner [4] Group 2 - China Chengtong Holdings Group led the establishment of the "Chengtong Science and Technology Innovation Fund" in Beijing, with a total scale of 300 billion yuan, focusing on early-stage technology companies [5] - L Catterton raised approximately 11 billion USD in its recent fundraising cycle, including flagship acquisition strategy funds and credit funds [6][7] - Guangdong Province launched a smart industry fund with a target scale of 100 billion yuan, focusing on government-guided and market-oriented operations [8] Group 3 - Bank of China established a 5 billion yuan AIC fund in Shenzhen, focusing on traditional industry upgrades and emerging industry development [9] - China Petroleum launched the largest hydrogen energy industry chain investment fund in China, with an initial scale of 5 billion yuan [10] - China National Building Material Group initiated a 50 billion yuan future science and technology innovation fund in Suzhou [11] Group 4 - Shenzhen Dongfang Fuhai Investment Management Co., Ltd. received approval to issue the first private venture capital technology innovation bond in the interbank market, raising 1.5 billion yuan [12] - Jiangsu Suzhou established an AI industry mother fund with a total scale of 6 billion yuan, focusing on key areas such as computing power and data [14] - Suzhou established a low-altitude economy industry mother fund with a capital of 2 billion yuan, aimed at promoting investment in the low-altitude economy [15] Group 5 - Ctrip announced the establishment of a 1 billion yuan tourism innovation fund to support breakthrough and innovative developments in the tourism sector [16] - Wuxi Jing Shui Hu Venture Capital completed the establishment of its first FOF fund, focusing on market-driven investment strategies [17] - Wuhan Investment Control Group and partners established the Wu Chuang Jiang An Science and Technology Innovation Fund to enhance collaboration between Beijing and Hubei [18] Group 6 - Fudan University established a new engineering development fund with an initial capital of 120 million yuan to support various engineering disciplines [20] - Dongguan launched a 1 billion yuan AI industry mother fund, focusing on hardware manufacturing and core technology research [21] - Anhui Province established the Guoyao Seed Venture Capital Fund with a total scale of 500 million yuan, supporting early-stage enterprises in strategic emerging industries [22] Group 7 - Changjiang Industrial Investment Group launched the Changjiang Gongrong Science and Technology (Hubei) Equity Investment Fund with a planned scale of 10 billion yuan [23] - Jiangsu Province established a data industry fund with a total scale of 3 billion yuan, focusing on equity investment and private equity fund management [24] - Gree Financial Investment plans to establish an industry investment fund in Jinan, focusing on low-altitude economy and new productivity fields [25][26] Group 8 - Huachuang Yuxin announced the establishment of the Guizhou Internet of Things Industry Fund with a scale of 400 million yuan, focusing on market applications in the new IoT ecosystem [27] - Wenzhou City is inviting GP applications for its key industry development fund to accelerate investment in strategic emerging industries [28] - Changde introduced a management method for its science and technology innovation guiding fund, focusing on early-stage technology enterprises [29] Group 9 - Taizhou Jin Kong announced the selection of management institutions for two strategic emerging industry mother funds [30] - Linfen City is seeking fund management institutions for its technology innovation equity investment fund to enhance the local innovation ecosystem [31] - Guangzhou Liwan District revised its industry investment fund management measures, targeting a scale of 1 billion yuan [33] Group 10 - Hubei Province announced plans to establish three 1 billion yuan seed funds to support innovation and entrepreneurship among university students [34] - Beijing's Economic and Information Bureau issued an action plan to encourage foreign investment institutions to establish industry investment funds in the city [35]

Group 1 - Ctrip Group announced the establishment of a 1 billion RMB tourism innovation fund aimed at supporting breakthrough and innovative developments in the tourism sector [3] - In 2024, China's domestic tourism reached 5.615 billion trips, marking a historical high, while inbound tourism orders for Ctrip in Q1 2025 saw a year-on-year increase of approximately 100% [3] - The fund will focus on long-term investments in innovative projects to reshape destination growth models and promote cross-industry collaboration to create unique travel experiences [3] Group 2 - Ctrip has formed strategic partnerships with Centara Hotels & Resorts in Thailand, Seafest Hotel Group in Malaysia, and Archipelago International in Indonesia to enhance marketing and service experiences [3] - The company has established deep cooperation with 10 domestic destinations and 5 overseas travel agencies to create a "two-way service hub" aimed at increasing inbound tourist flow [3]

OTA运营中，流量和转化是酒店业永不过时的话题，在酒店供给过剩与消费分化的市场环境下，酒店业如何借势OTA进一步释放增长潜力？ 5月22日，在2025环球旅讯数智论坛·上海站，携程集团副总裁兼大住宿事业部大中华酒店业务总经理许一心以《如何在不确定的市场中明确增长策略》为 题，进行了主题分享。 以下是演讲实录，内容有删减： 今天我想和大家聊聊过去一年酒旅市场的一些情况，以及我们在波动中如何去把握市场机会、挖掘潜力。 先从一组数据说起，2024年国内旅游人次，同比增长了14.8%，今年一季度国内旅游人次同比增长了26.4%，五一的旅游人次再次创了历史新高，从某种 程度上反映出国人出行的意愿其实是在增强的。 从携程的数据来看，我们拿去年五一和今年五一的数据做了对比，发现了一个有意思的现象，去年五一的数据是"高开低走"，前面几天冲的很高，后面跳 水很明显，包括去年国庆、春节也基本是这个趋势，但到了今年五一，五天的走势基本上比较平稳，说明现在的出行市场又有了新的变化。 同时我们也注意到，2023年和2024年这两年酒店数量增长的很快，预计2025年高星级酒店也会保持12%左右的增长。侧面反应，实际上国内酒店供给是非 常 ...

Investment Rating - The report maintains a "Buy" rating for the company [3] Core Insights - The company slightly exceeded profit expectations in Q1 2025, with revenue reaching 138.30 billion, a year-on-year increase of 16.2%, and operating profit (Non-GAAP) at 40.43 billion, up 7.4% year-on-year [6] - The company is expected to achieve revenue of 624.84 billion, 705.27 billion, and 793.32 billion for 2025, 2026, and 2027 respectively, with year-on-year growth rates of 17.24%, 12.87%, and 12.48% [2] - The company is expanding its overseas investments, which has led to a slight decline in profit margins, with a gross margin of 80.4% in Q1 2025, down 0.8 percentage points year-on-year [6] - The international OTA platform bookings grew over 60% year-on-year, and inbound tourism increased by over 100% [6] - The company is accelerating its AI strategy, which is expected to enhance customer service efficiency significantly [6] Financial Summary - The projected net profit for the company is 169.59 billion, 199.39 billion, and 226.82 billion for 2025, 2026, and 2027 respectively, with a year-on-year change of -0.63%, +17.57%, and +13.75% [2] - The earnings per share (EPS) are forecasted to be 23.77, 27.94, and 31.79 for 2025, 2026, and 2027 respectively [2] - The company’s total assets are expected to reach 275.05 billion, 297.69 billion, and 329.00 billion for 2025, 2026, and 2027 respectively [7]

Core Viewpoint - Trip.com Group Limited is notifying holders of its 1.50% Exchangeable Senior Notes due 2027 about their right to require the company to repurchase these notes for cash on July 1, 2025, under specific terms outlined in the Indentures [1][2][3] Group 1: Repurchase Right Details - Holders can require the company to repurchase all or a portion of their Exchangeable Notes, with a minimum amount of US$200,000 or integral multiples of US$1,000 [2][3] - The repurchase price will be 100% of the principal amount plus any accrued and unpaid interest up to July 1, 2025 [2] - The total outstanding amount of Exchangeable Notes as of May 27, 2025, is US$500,000,000, which means the total cash purchase price could reach US$500,000,000 if all notes are surrendered [2] Group 2: Timeline and Procedures - The opportunity to exercise the 2025 Repurchase Right starts on May 28, 2025, at 9:00 a.m. and ends on June 27, 2025, at 5:00 p.m. [3] - Holders must follow specific transmittal procedures outlined in the 2025 Repurchase Right Notice to exercise their rights [3] - Holders can withdraw previously tendered Exchangeable Notes until June 27, 2025 [3] Group 3: Company Overview - Trip.com Group Limited is a leading global one-stop travel platform, offering a comprehensive suite of travel products and services [7] - The company operates under various brands, including Ctrip, Qunar, Trip.com, and Skyscanner, and aims to provide cost-effective travel solutions [7] - Founded in 1999 and listed on Nasdaq in 2003 and HKEX in 2021, the company continues to expand its reach among travelers worldwide [7]

Investment Rating - The report maintains a "Buy" rating for the company [3] Core Views - The company's Q1 2025 profit slightly exceeded expectations, with revenue reaching 138.30 billion, a year-on-year increase of 16.2%, and operating profit (Non-GAAP) at 40.43 billion, up 7.4% year-on-year [6] - The company is expected to achieve revenue of 624.84 billion, 705.27 billion, and 793.32 billion for 2025, 2026, and 2027 respectively, with year-on-year growth rates of 17.24%, 12.87%, and 12.48% [2] - The company is expanding its overseas investments, contributing to revenue growth, with international OTA platform bookings increasing over 60% year-on-year [6] - The company is accelerating its AI strategy, which is expected to enhance customer service efficiency significantly [6] Financial Summary - The forecasted revenue and net profit for the company from 2025 to 2027 are as follows: - Revenue: 624.84 billion (2025), 705.27 billion (2026), 793.32 billion (2027) - Net Profit: 169.59 billion (2025), 199.39 billion (2026), 226.82 billion (2027) [2][7] - The company's earnings per share (EPS) is projected to be 23.77 yuan in 2025, 27.94 yuan in 2026, and 31.79 yuan in 2027 [2][7] - The price-to-earnings (P/E) ratio is expected to be 19X in 2025, 16X in 2026, and 14X in 2027 [2]

Group 1: Internet Platform Companies - Tencent has a gross margin of 53% and a net margin of 33.7%, dominating the social media space [1] - Trip.com has a gross margin of 81.76% and a net margin of 32.02%, holding a market share of 65-70% in high-star hotels [1] - Pinduoduo reports a gross margin of 60.9% and a net margin of 28.6%, affected by losses from TEMU [1] - NetEase Games shows a gross margin of 57.14% and a net margin of 28.2% [1] Group 2: Fast-Moving Consumer Goods (FMCG) Brands - Leading FMCG brands like Nongfu Spring and Coca-Cola have net margins around 20%, with Coca-Cola at 22.6% due to its innovative business model [2] - Second-tier brands like PepsiCo and Nestlé have net margins around 10%, often due to insufficient brand loyalty or high pricing with low scale [3] - Third-tier brands such as Master Kong and Uni-President operate with net margins around 5%, relying on low prices for market share but struggling with brand loyalty and production scale [4] Group 3: Chain Beverage Companies - Top-tier chain beverage companies like Bawang Tea have a net margin of 20.3%, benefiting from brand premium [5] - Starbucks typically has a net margin of around 15%, but faces margin pressure due to increased competition [6] - Second-tier brands like Mixue Ice City and Gu Ming have net margins of 17.94% and 16.99%, respectively, leveraging scale advantages [6] Group 4: Hardware Companies - Apple has a gross margin of 46.2% and a net margin of 24%, while Xiaomi has a gross margin of 20.4% and a net margin of 6.44% [8] - NVIDIA shows a gross margin of 78.9% and a net margin of 57%, compared to AMD's gross margin of 50.2% and net margin of 15.3% [8] Group 5: Business Insights - High net margins (above 30%) often indicate monopolistic products, while margins below 15% suggest competitive pressures [9] - Companies with single-digit net margins typically rely on price wars, indicating weak product differentiation and low competitive advantage [14] - Trends in gross and net margins can reveal significant insights about a company's market position, as seen with Tesla and BYD [15]