Core Viewpoint - Trip.com (TCOM) is positioned as a strong investment opportunity due to its improving earnings outlook and analysts' increasing earnings estimates [1][2]. Earnings Estimates - Current-quarter earnings estimate is $0.34 per share, reflecting a significant year-over-year increase of +209.09% [3]. - For the full year, the expected earnings are $2.36 per share, indicating a remarkable year-over-year change of +713.79% [4]. - Over the past month, the Zacks Consensus Estimate for Trip.com has risen by 13.33% for the current quarter and 8.51% for the full year, with no negative revisions reported [3][4]. Zacks Rank - Trip.com has achieved a Zacks Rank 1 (Strong Buy), indicating strong potential for outperformance based on favorable earnings estimate revisions [5]. - Research indicates that stocks with Zacks Rank 1 and 2 significantly outperform the S&P 500 [5]. Stock Performance - Trip.com shares have increased by 5.5% over the past four weeks, suggesting positive investor sentiment driven by the company's earnings growth prospects [6].

Core Viewpoint - Trip.com (TCOM) shares have increased by 4.1% recently, with a mean price target of $49.73 suggesting a potential upside of 32.7% from the current price of $37.49 [1] Price Targets and Analyst Consensus - The mean estimate consists of 15 short-term price targets with a standard deviation of $4.48, indicating a relatively high agreement among analysts [1] - The lowest estimate of $43 indicates a 14.7% increase, while the highest estimate suggests a 49.4% surge to $56 [1] - Analysts' price targets can often mislead investors, as they may set overly optimistic targets due to business incentives [3][4] Earnings Estimates and Market Sentiment - Analysts are optimistic about TCOM's earnings prospects, with a positive trend in earnings estimate revisions indicating potential stock upside [5] - Over the last 30 days, the Zacks Consensus Estimate for TCOM has increased by 8.5%, with no negative revisions reported [5] - TCOM holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimates [5]

Economic Outlook - Investor confidence in China has declined, but there is a belief that the investing landscape will improve in the future [1] - The current equity environment in China remains challenging, yet opportunities persist for traders who can identify key price levels [1] Company Analysis: NetEase (NTES) - A recent Black Swan event negatively impacted NetEase's stock, but traders found opportunities to profit from long-dated calls, achieving a 30% intraday gain [1] - The trading environment for NetEase requires a focus on price action due to unpredictable macro policies [1][4] Company Analysis: Trip.com (TCOM) - Trip.com is the leading online travel agency in China, with over 1.4 million hotels listed, significantly ahead of competitors like Meituan and Fliggy [5] - The company reported 13.74 billion Yuan in revenue with a 29% operating margin, exceeding expectations in a tough spending environment [6] - Trip.com's international travel business has recovered approximately 80% of pre-pandemic revenue, although visa wait times and geopolitical factors remain challenges [6][10] Market Trends and Projections - Domestic tourism in China has shown strong growth, with 3.67 billion visits and 3.7 trillion Yuan in tourism-related revenue in the first nine months of 2023 [7] - The China Tourism Academy projects a 114% increase in tourism-related revenue compared to the previous year, nearing pre-pandemic levels [6][7] - Analysts expect Trip.com’s revenue and EBITDA to grow by 10-20% from 2023 to 2025, driven by improved cost management and market positioning [8] Geopolitical Considerations - The U.S. Travel Association highlights that resolving visa wait times could significantly boost U.S. tourism revenue from Chinese visitors, who typically spend over $5,000 per trip [6] - Current visa wait times from China to the U.S. are approximately 164 days, and flight capacity is less than 10% of pre-pandemic levels, indicating potential for future growth [6][10] Investment Sentiment - The travel industry is viewed as more insulated from regulatory changes compared to other sectors, with a potential for recovery in both domestic and international travel segments [10] - Trip.com is expected to gradually ascend in investment value as the travel market stabilizes and grows [10]

Financial Data and Key Metrics Changes - Trip.com Group reported a net revenue of RMB 13.7 billion for Q3 2023, representing a 99% increase year-over-year and a 22% increase quarter-over-quarter, primarily due to strong recovery in the travel market [19] - Adjusted EBITDA was RMB 4.6 billion for Q3 2023, compared to RMB 1.4 billion in the same period last year and RMB 3.7 billion in the previous quarter [22] - Diluted earnings per ordinary share were RMB 6.84 or US$0.94 for Q3 2023, with non-GAAP diluted earnings per ordinary share at RMB 7.26 or US$1 [23] Business Line Data and Key Metrics Changes - Accommodation reservation revenue for Q3 was RMB 5.6 billion, a 92% increase year-over-year and a 30% increase quarter-over-quarter, which is 36% higher than the 2019 level [19] - Transportation ticketing revenue for Q3 was RMB 5.4 billion, representing a 105% increase year-over-year and 11% increase quarter-over-quarter, which is 44% higher than the 2019 level [20] - Packaged tour revenue for Q3 was RMB 1.3 billion, a 243% increase year-over-year and an 84% increase quarter-over-quarter, recovering to 81% of the 2019 level [20] Market Data and Key Metrics Changes - In the Chinese domestic market, hotel reservations grew over 90% year-over-year and 70% versus 2019 levels [8] - The overall Chinese outbound market recovered to about 50% of the pre-pandemic level, while Trip.com Group's outbound hotel and air ticket reservations recovered to 80% of the pre-pandemic level [9] - Air ticket bookings on the global OTA platform nearly doubled year-over-year and were 80% above 2019 levels [10] Company Strategy and Development Direction - The company is focusing on globalization and AI innovation as key components of its long-term strategy, aiming to enhance customer experiences through personalized services [6] - Trip.com Group is committed to expanding its global OTA platform and enhancing its capabilities to meet the growing demand for outbound travel [5] - The company is also prioritizing sustainability initiatives as part of its long-term growth strategy, including low-carbon travel options and community-friendly programs [15][16] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the robust travel demand across all business segments and anticipates that outbound travel will continue to be a primary growth catalyst [18] - The company expects to maintain high-speed growth in its global OTA platform and anticipates further recovery in outbound travel due to improvements in flight capacity and visa processes [31] - Management highlighted the importance of AI in enhancing operational efficiency and customer service, with ongoing investments in AI technology [66] Other Important Information - The company has repurchased US$120 million of its shares and plans to commence a regular capital return policy in 2024 [24] - As of September 30, 2023, the balance of cash and cash equivalents was RMB 79 billion or US$10.8 billion, indicating strong cash flow [23] Q&A Session Summary Question: Can you elaborate on the adoption of AI technology between Trip.com and Ctrip? - Management stated that a consistent AI adoption strategy is implemented across all markets, focusing on improving productivity and efficiency [27] Question: What is the travel performance after the Golden Week and the momentum into Q4 and 2024? - Management noted that domestic hotel bookings surpassed 2019 levels by around 60%, and outbound reservations recovered to around 80% of 2019 levels, with confidence in outpacing market growth [30][31] Question: What is the recovery pace of outbound flight and when will it fully recover? - Management indicated that while demand exceeds 2019 levels, visa application delays and flight capacity recovery are hurdles, but improvements are expected [33] Question: Is there a trend of trade-down in corporate or leisure travel? - Management reported no signs of consumption downward in leisure travel, with corporate travelers spending more than in 2019 [36] Question: How did the company achieve the current margin structure? - Management explained that strong brand awareness and market share contribute to healthy margins, with expectations for outbound travel to increase its revenue contribution [41] Question: What is the current profitability of Trip.com and its growth outlook? - Management stated that Trip.com has achieved breakeven on a contribution margin basis and expects continued improvement in profitability across markets [62]

Financial Performance - Total net revenue for the third quarter of 2023 was RMB13.7 billion (US$1.9 billion), representing a 99% increase year over year and a 22% increase from the previous quarter[4] - Net income for the third quarter was RMB4.6 billion (US$637 million), significantly up from RMB245 million for the same period in 2022[9] - Adjusted EBITDA for the third quarter was RMB4.6 billion (US$634 million), with an adjusted EBITDA margin of 34%, compared to 21% for the same period in 2022[9] - Total revenue for the quarter ended September 30, 2023, reached RMB 13,751 million, a 99% increase from RMB 6,897 million in the same quarter of 2022[22] - Net income attributable to Trip.com Group Limited for the quarter ended September 30, 2023, was RMB 4,615 million, compared to RMB 266 million in the same quarter of 2022, reflecting a significant increase of 1,635%[22] - Adjusted EBITDA for the quarter ended September 30, 2023, was RMB 4,622 million, with an adjusted EBITDA margin of 34%[24] - Earnings per ordinary share for the quarter ended September 30, 2023, was RMB 7.05, significantly higher than RMB 0.41 in the same quarter of 2022[22] - The company reported a gross profit of RMB 11,273 million for the quarter ended September 30, 2023, compared to RMB 5,621 million in the same quarter of 2022, indicating a gross profit margin improvement[22] Revenue Breakdown - Domestic hotel bookings grew by over 90% year over year and increased by over 70% compared to pre-COVID levels in 2019[2] - Outbound hotel and air reservations recovered to around 80% of pre-COVID levels for the same period in 2019[2] - Packaged-tour revenue for the third quarter was RMB1.3 billion (US$182 million), representing a 243% increase from the same period in 2022[6] - Transportation ticketing revenue for the third quarter was RMB5.4 billion (US$736 million), a 105% increase from the same period in 2022[5] Cash and Assets - As of September 30, 2023, the balance of cash and cash equivalents was RMB79.0 billion (US$10.8 billion)[11] - Cash, cash equivalents, and restricted cash increased to RMB 37,761 million as of September 30, 2023, up from RMB 18,487 million as of December 31, 2022[20] - Total current assets rose to RMB 93,609 million as of September 30, 2023, compared to RMB 61,435 million as of December 31, 2022, marking a 52% increase[20] - Total liabilities increased to RMB 103,900 million as of September 30, 2023, from RMB 78,672 million as of December 31, 2022[20] - Total shareholders' equity increased to RMB 123,612 million as of September 30, 2023, from RMB 113,019 million as of December 31, 2022[20] Investment and Future Plans - Product development expenses increased by 44% to RMB3.6 billion (US$490 million) from the same period in 2022[7] - The company purchased 3.6 million ADSs for a total gross consideration of US$120 million as part of its share repurchase plan[12] - The company plans to continue expanding its market presence and investing in new technologies to enhance user experience and operational efficiency[22]

Financial Data and Key Metrics Changes - The company reported a net revenue of RMB11.2 billion for Q2 2023, representing a 180% increase year-over-year and a 22% increase from the previous quarter, primarily due to strong recovery in the travel market [19] - Adjusted EBITDA was RMB3.7 billion for Q2 2023, compared to RMB355 million in the same period last year and RMB2.8 billion in the previous quarter [22] - Adjusted EBITDA margin was 33% for Q2 2023, compared to 9% in the same period last year and 31% in the previous quarter [23] Business Line Data and Key Metrics Changes - Accommodation reservation revenue for Q2 2023 was RMB4.3 billion, representing a 216% increase year-over-year and a 23% increase quarter-over-quarter, which is 26% higher than the 2019 level [19] - Transportation ticketing revenue for Q2 2023 was RMB4.8 billion, representing a 173% increase year-over-year and a 16% increase quarter-over-quarter, which is 41% higher than the 2019 level [20] - Packaged tour revenue for Q2 2023 was RMB722 million, representing a 492% increase year-over-year and 87% increase quarter-over-quarter, recovering to 69% of the 2019 level [20] Market Data and Key Metrics Changes - Domestic hotel bookings grew by around 170% year-over-year and more than 60% versus the 2019 level, with long-haul hotel bookings seeing a growth rate of 277% [9] - Outbound hotel and air reservations on the platform recovered to over 60% of the pre-pandemic level, leading the industry by roughly more than 20% [10] - International air passenger volume has recovered to over 50% quarter-to-date, with outbound hotel and air bookings recovering to 80% of the 2019 level during peak weeks [25][38] Company Strategy and Development Direction - The company is focused on enhancing user experience through AI-powered tools, such as the upgraded AI assistant TripGenie, which aims to provide personalized travel experiences [6][14] - The company continues to diversify its product offerings and strengthen its competitive advantage in long-haul travel, with a focus on innovation and differentiation [12] - The company is committed to corporate responsibility initiatives, including common prosperity initiatives and sustainability efforts [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term growth of China's travel market, citing a shift in consumer spending towards services and robust demand for leisure travel [32] - The company anticipates that the travel market will continue to show strong momentum, driven by leisure travel demand, with expectations for increased international flight capacity [24][25] - Management believes that the innovation and infrastructure development will inject energy into the recovery of the travel industry [35] Other Important Information - The company has established 23 country retreats to create employment opportunities and increase income for local residents [16] - The balance of cash and cash equivalents as of June 30, 2023, was RMB75 billion or $10.3 billion [23] Q&A Session Summary Question: Insights on AI and its impact on OTAs - Management discussed the launch of TripGenie, an AI assistant that enhances operational efficiency and improves user experience, emphasizing that generative AI will not replace OTAs but will help improve their efficiency [29] Question: Observations on consumer spending in China's travel market - Management noted that there are no signs of consumers trading down in terms of hotel star ratings or shortening their length of stay, maintaining an optimistic outlook on the long-term growth of the travel market [33] Question: Performance of different segments and upcoming holidays - Management indicated that domestic hotel bookings have surpassed the 2019 level by 70%, and outbound hotel and air reservations have recovered to more than 80% of the 2019 level, expecting strong travel activities during the upcoming holidays [38][40] Question: Competitive landscape and marketing expenses - Management acknowledged the competitive landscape but emphasized their focus on service quality and supplier chain management to maintain a competitive edge, while also investing in content strategy [44] Question: Long-term growth outlook post-COVID - Management projected a long-term growth rate of around 15% to 25%, driven by GDP growth, online penetration, and increased purchasing frequency [48][50] Question: Capital allocation plans - Management outlined a disciplined capital allocation approach focused on sustainable operations, strategic initiatives for long-term growth, fulfilling debt obligations, and returning capital to shareholders [62]

Share Capital and Shares - The authorized share capital of Trip.com Group Limited is US$1,750,000, divided into 1,400,000,000 ordinary shares with a nominal value of US$0.00125 each[9]. - The Company has the power to redeem or purchase any of its shares and to increase or reduce its capital as per the provisions of the Companies Act[5]. - The Company may allot, issue, or grant options over shares with or without preferred rights, at the discretion of the Directors[10]. - The Company may issue redeemable shares subject to the provisions of the Law and the Memorandum, with terms determined by Special Resolution[14]. - The Company has a first and paramount lien on all shares registered in the name of a Member for all debts owed to the Company by that Member[20]. - If a Member fails to pay any call or installment, the Directors may forfeit the shares after providing notice and a specified period for payment[26]. - The Company may increase its share capital by an amount prescribed by Ordinary Resolution, with rights and privileges determined in a general meeting[32]. - The Company shall not be bound to register more than four persons as joint holders of any share[12]. - The Company may replace defaced, lost, or destroyed share certificates upon payment of a reasonable fee as determined by the Board[12]. - A forfeited share may be sold or disposed of at the Directors' discretion, and the forfeiture includes all unpaid dividends[26]. - The Company shall not recognize any equitable or contingent interest in shares other than the absolute right of the registered holder[19]. Meetings and Voting - The Company will hold its annual general meeting within six months after the end of the financial year, specifically on the second Wednesday in December at 10 AM[35]. - A general meeting requires a quorum of at least two Members Present, or one-third of the issued and outstanding voting Shares if the Company has only one member of record[41]. - The notice for an annual general meeting must be given at least 21 days in advance, while an extraordinary general meeting requires a minimum of 14 days' notice[38]. - Members holding at least 10% of the capital can requisition an extraordinary general meeting, which must be convened within 21 days of the requisition[37]. - Proxies must be submitted at least 48 hours before the meeting, and the instrument appointing a proxy can be in any common form[72]. - Votes at a general meeting are determined by a show of hands unless a poll is demanded, with each Member Present having one vote per Share[66]. - The Company may utilize Communication Facilities for general meetings, allowing virtual participation[54]. - If a quorum is not present within half an hour, the meeting will be adjourned to the same day in the following week[56]. - The chairman of the meeting has the authority to adjourn the meeting with the consent of the Members Present[59]. - A resolution passed by all Members in writing is as valid as if it were passed at a general meeting[55]. Board of Directors - The Board of Directors consists of a maximum of nine members, including three Founder Directors appointed by the company's founders[53]. - Each Director holds office until the expiration of their term and until their successor is elected[82]. - Directors may receive remuneration determined by the Board, which accrues daily, along with reimbursement for travel and other expenses[84]. - The Directors have the authority to borrow money and mortgage the company's assets, including issuing debentures and other securities[100]. - The Directors may establish committees and delegate powers to manage the company's affairs as they see fit[62]. - A Director may contract with the company without disqualification, provided they declare any material interest in such contracts[102]. - The company must maintain a register of Directors and officers, including their names, addresses, and occupations[89]. - An alternate Director can be appointed to act in place of a Director who is unable to attend meetings[90]. - The Directors are responsible for managing the company's business and may pay all expenses incurred in promoting and setting up the company[95]. - The Directors may appoint one or more Managing Directors with remuneration determined by the Board, but their appointment ceases if they are no longer Directors[67]. - A quorum for Directors' meetings requires at least five members or a majority of the Board, including the Chairman[111]. Financial Management and Reporting - The Company may declare dividends from profits, and no dividend shall be payable except from realised or unrealised profits or the Share Premium Account[125]. - The Directors may capitalise any sum from reserve accounts or profit and loss accounts for distribution among Members as fully paid-up shares[132]. - Proper books of account must be maintained to provide a true and fair view of the Company's affairs, including all sums received and expended[133]. - The Directors are responsible for preparing profit and loss accounts and balance sheets to be presented at general meetings[135]. - The Company may appoint an Auditor who has the right to access all books and accounts at any time[138]. - Auditors are required to report on the accounts at the next annual general meeting following their appointment[139]. - The financial year of the Company ends on December 31st and begins on January 1st each year[93]. Legal and Regulatory Compliance - The Company may be wound up voluntarily by a Special Resolution[91]. - Every Director or officer of the Company is indemnified against liabilities incurred in carrying out their functions, except for those arising from willful neglect or default[92]. - The Company has the power to change its name or amend its Articles by Special Resolution, subject to legal requirements[94]. - Notices to Members can be sent via various methods including post, cable, telex, fax, or e-mail, with specific rules on deemed receipt[140]. - The Company may disclose information to its Members, including details in the Register of Members[90]. - The exclusive forum for resolving complaints related to federal securities laws is the United States District Court for the Southern District of New York[96]. - The Company may register by way of continuation under the laws of any jurisdiction outside the Cayman Islands, subject to legal provisions[95]. - No Member is entitled to discover details of the Company's trading that may be considered trade secrets[144]. - The liquidator may divide the Company's assets among Members in kind upon winding up, with the approval of a Special Resolution[147].

Financial Data and Key Metrics Changes - The company reported a net revenue of RMB9.2 billion for Q1 2023, representing a 124% increase year-over-year and an 83% increase quarter-over-quarter, primarily due to strong recovery in the travel market [18] - Adjusted EBITDA reached RMB2.8 billion, with an adjusted EBITDA margin of 31%, the highest in the past decade, compared to 2% in the same period last year [21][22] - Diluted earnings per ordinary share were RMB5.02 or $0.73, while non-GAAP diluted earnings per ordinary share were RMB3.07 or $0.45 [22] Business Line Data and Key Metrics Changes - Accommodation reservation revenue was RMB3.5 billion, a 140% increase year-over-year and a 106% increase quarter-over-quarter, which is 15% higher than the 2019 level [18] - Transportation ticketing revenue reached RMB4.2 billion, a 150% increase year-over-year and 89% increase quarter-over-quarter, which is 24% higher than the 2019 level [19] - Packaged tour revenue was RMB386 million, representing a 211% increase year-over-year and a 135% increase quarter-over-quarter, recovering to 37% of the 2019 level [19] Market Data and Key Metrics Changes - Domestic hotel reservations in China grew by more than 100% year-over-year, with long-haul hotel bookings seeing a 176% increase and same-city staycation hotel bookings growing by 150% over the 2019 level [8][9] - Outbound hotel and air reservations recovered to over 40% of the pre-pandemic level, significantly outperforming the market average of 15% [9][10] - In the global market, air ticket bookings increased by over 200% year-over-year and were 100% higher than the 2019 level [11] Company Strategy and Development Direction - The company aims to augment its supply chain, content offering, and service quality to capture pent-up travel demands and lay a solid foundation for long-term growth [6][7] - Continued investment in technology, including generative AI, is expected to enhance customer experience and operational efficiency [16][55] - The company is focused on expanding its market presence in lower-tier cities and enhancing its product offerings to meet evolving customer demands [14][42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term outlook of the travel industry, citing strong pent-up demand and recovery in both domestic and outbound travel [5][7] - The company anticipates a slight decrease in margins in the short term due to increased marketing and promotions but expects to maintain a full-year margin in the 20% to 30% range [30] - The recovery in outbound travel is expected to continue as airlines increase capacity, with management optimistic about sustaining growth in various travel segments [39][46] Other Important Information - The company has established a strong user base in both long-haul and short-haul travel, allowing for a balanced portfolio of services [13] - The TripPLUS program connects over 240,000 hotels to high-quality loyal customers, with over 50% of reservations coming from high-end hotels [14] - The company has seen a significant increase in user-generated content and KOL engagement, enhancing its content generation capabilities [15] Q&A Session Summary Question: Plans for adopting generative AI technology - Management highlighted the use of generative AI to improve productivity in marketing and engineering, as well as enhancing customer service through automation [26][27] Question: Sustainability of EBITDA margins - Management noted that while margins may decrease slightly in the short term due to increased marketing expenses, they expect to maintain a full-year margin in the 20% to 30% range [29][30] Question: Performance of different business segments - Management reported that domestic travel has fully recovered, with outbound flight capacity steadily increasing, and expects continued growth in both domestic and outbound markets [33][34] Question: Drivers behind outbound travel recovery - Management attributed the strong recovery in outbound travel to significant investments in customer trust and partnerships during the pandemic, which have resulted in increased demand [37][39] Question: Long-term growth outlook for travel consumption in China - Management expressed confidence in the long-term growth of travel consumption, particularly among mid to high-income populations, and noted the acceleration of online penetration in the travel industry [40][42]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 20-F (Mark One) ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ OR ☐ SHELL COMPANY REPORT PURSUANT TO ...

Trip.com Group Limited (NASDAQ:TCOM) Q4 2022 Earnings Conference Call March 6, 2023 7:00 PM ET Company Participants Michelle Qi - Investor Relations James Liang - Executive Chairman Jane Sun - Chief Executive Officer Cindy Wang - Chief Financial Officer Conference Call Participants Brian Gong - Citi Alex Poon - Morgan Stanley Jiong Shao - Barclays Alex Yao - JPMorgan James Lee - Mizuho Group Thomas Chong - Jefferies Simon Cheung - Goldman Sachs Wei Xiong - UBS Joyce Ju - Bank of America Tian Hou - T.H. Capi ...