Trip.com (TCOM) closed the last trading session at $39.65, gaining 8.5% over the past four weeks, but there could be plenty of upside left in the stock if short-term price targets set by Wall Street analysts are any guide. The mean price target of $49.67 indicates a 25.3% upside potential.The mean estimate comprises 15 short-term price targets with a standard deviation of $4.39. While the lowest estimate of $43 indicates an 8.5% increase from the current price level, the most optimistic analyst expects the ...

Group 1 - Trip.com Group Limited Sponsored ADR (TCOM) has reached a significant support level, indicating a potential investment opportunity from a technical perspective [1] - TCOM's 50-day simple moving average has recently broken above its 200-day moving average, forming a "golden cross," which is a bullish signal [1] - A golden cross consists of three stages: a downtrend that bottoms out, a crossover of the short-term moving average above the long-term moving average, and continued upward momentum [1] Group 2 - TCOM has experienced a 6% rally over the past four weeks, and it currently holds a 1 (Strong Buy) rating on the Zacks Rank, suggesting a potential breakout [2] - The positive earnings outlook for TCOM supports the bullish case, with no earnings estimates decreasing in the past two months and one revision higher [2] - The Zacks Consensus Estimate for TCOM has increased, further indicating potential gains for investors [2]

Core Viewpoint - Trip.com Group Limited will announce its fourth quarter and full year results for 2023 on February 21, 2024, after market close [1] Group 1: Financial Announcement - The results announcement will be followed by a conference call hosted by the management team at 7:00 PM U.S. Eastern Time on the same day [1] - The conference call will be available via live webcast and will be archived for twelve months [1] Group 2: Registration and Participation - Participants must pre-register to join the conference call, receiving details including dial-in numbers and a unique access PIN upon registration [2] 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 [3] - The company operates under various brands, including Ctrip, Qunar, Trip.com, and Skyscanner, and aims to provide travelers with an inspiring and cost-effective booking experience [3]

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 - In Q3 2023, Trip.com Group's net revenue reached RMB 13.7 billion (USD 1.9 billion), representing a 99% year-over-year increase and a 22% quarter-over-quarter increase[3]. - The company's net profit for Q3 2023 was RMB 4.6 billion (USD 637 million), compared to RMB 245 million in Q3 2022[5]. - Total revenue for Q3 2023 reached RMB 13,751 million, a 22% increase from RMB 11,262 million in Q2 2023[13]. - Net profit for Q3 2023 was RMB 4,615 million, significantly up from RMB 631 million in Q2 2023[14]. - Adjusted EBITDA for Q3 2023 was RMB 4.6 billion (USD 634 million), with an adjusted EBITDA margin of 34%, up from 21% in Q3 2022[5]. - Adjusted EBITDA for Q3 2023 was RMB 4,622 million, with an EBITDA margin of 34%[15]. - Operating profit for Q3 2023 was RMB 3,909 million, up from RMB 2,977 million in Q2 2023[15]. - The company reported a basic earnings per share of RMB 7.05 for Q3 2023, compared to RMB 0.97 in Q2 2023[14]. Revenue Breakdown - Revenue from accommodation bookings was RMB 5.6 billion (USD 766 million), a 92% increase year-over-year[4]. - Accommodation booking revenue for Q3 2023 was RMB 5,589 million, up 30% from RMB 4,285 million in Q2 2023[13]. - Revenue from transportation ticketing was RMB 5.4 billion (USD 736 million), a 105% increase year-over-year[4]. - Transportation ticketing revenue for Q3 2023 was RMB 5,367 million, an increase of 11% compared to RMB 4,814 million in Q2 2023[13]. Market and Growth - Hotel bookings in China grew over 90% year-over-year and over 70% compared to the same period in 2019[2]. - International hotel and flight bookings recovered to approximately 80% of pre-pandemic levels from 2019, with international passenger traffic exceeding 50% recovery[2]. - The company anticipates continued growth in user data and market expansion in the upcoming quarters[15]. - The company continues to focus on expanding its market presence and enhancing its product offerings to cater to both domestic and international travelers[10]. Financial Position - As of September 30, 2023, the company had cash and cash equivalents totaling RMB 79 billion (USD 10.8 billion)[5]. - The cash and cash equivalents, along with restricted cash, increased significantly to RMB 37.8 billion as of September 30, 2023, compared to RMB 18.5 billion at the end of 2022, marking a growth of about 104.3%[11]. - The net accounts receivable rose to RMB 12.8 billion as of September 30, 2023, up from RMB 5.5 billion at the end of 2022, reflecting an increase of approximately 133.5%[11]. - Total liabilities increased to RMB 103.9 billion as of September 30, 2023, from RMB 78.7 billion at the end of 2022, indicating a rise of about 32.1%[12]. - The total equity attributable to shareholders of Trip.com Group reached RMB 122.8 billion as of September 30, 2023, compared to RMB 112.3 billion at the end of 2022, showing an increase of approximately 9.4%[12]. Strategic Initiatives - The company spent RMB 3.6 billion (USD 490 million) on product development in Q3 2023, a 44% increase year-over-year[4]. - The board approved a capital return policy starting in 2024, allowing for annual stock buybacks or cash dividends based on financial performance[5]. - The adjusted EBITDA for the company is expected to improve, enhancing management's ability to plan and forecast future operations[8]. - Trip.com Group's reliance on partnerships and contracts with suppliers remains a critical aspect of its operational strategy, which may influence future performance[7]. - The company is actively monitoring economic conditions and potential risks that could impact its growth trajectory, including competition and regulatory changes in China[7]. Upcoming Events - The upcoming earnings call scheduled for November 20, 2023, will provide further insights into the company's performance and strategic direction[6].

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]