Core Viewpoint - Baidu, Inc. has announced the pricing of its US$2 billion exchangeable bonds due in 2032, aimed at certain non-U.S. persons, with the offering expected to close around March 12, 2025 [1]. Group 1: Bonds Offering Details - The bonds will reference ordinary shares of Trip.com Group Limited, listed on the Hong Kong Stock Exchange [2]. - Holders cannot exchange their bonds before the first anniversary of the issue date, with specific conditions for exchanges thereafter [2][4]. - The initial exchange ratio is set at 1,107.0457 Trip.com Shares per US$100,000 principal amount, representing a 43% exchange premium over the recent share price of HK$491.00 [3]. Group 2: Financial Terms and Use of Proceeds - The bonds will not bear regular interest and will mature on March 12, 2032, with a repurchase option available for holders on March 12, 2029 [4]. - The net proceeds from the bonds offering will be used for repaying existing indebtedness, paying interest, and for general corporate purposes [5]. Group 3: Regulatory and Market Considerations - The bonds will not be registered under the Securities Act and cannot be offered or sold in the U.S. except under specific exemptions [6]. - The bonds are expected to be listed on the Open Market segment of the Frankfurt Stock Exchange [7]. - Investors may engage in hedging transactions that could impact the market price of Trip.com Shares [8].

Core Viewpoint - Baidu, Inc. plans to offer up to US$2 billion in exchangeable bonds due 2032, targeting non-U.S. persons in offshore transactions, subject to market conditions [1][3] Group 1: Bonds Offering Details - The bonds will reference ordinary shares of Trip.com Group Limited, listed on the Hong Kong Stock Exchange [2] - Holders can exchange bonds into cash after the first anniversary of the issue date, with specific contingencies [2] - The exchange ratio and other terms will be finalized at the time of pricing [2] Group 2: Use of Proceeds - The net proceeds from the bonds offering will be used for repayment of existing indebtedness, payment of interest, and general corporate purposes [3] Group 3: Regulatory and Market Considerations - The bonds will not be registered under the Securities Act and cannot be offered or sold in the U.S. except under certain exemptions [3] - The Trip.com Shares held by the company are classified as "restricted securities" [3] Group 4: Investor Strategies - Certain purchasers of the bonds may use a convertible arbitrage strategy to hedge their exposure, involving a short position in Trip.com Shares or ADSs [4] - The bookrunners expect to facilitate a sale of Trip.com Shares to hedge investors concurrently with the pricing of the bonds [4] Group 5: Company Overview - Baidu, founded in 2000, is a leading AI company with a strong Internet foundation, trading on Nasdaq and HKEX [6]

Summary of Ctrip Group Conference Call Company Overview - **Company**: Ctrip Group - **Date**: February 28, 2025 Key Points Industry and Market Outlook - Ctrip expects a revenue growth rate of 60% for 2025, despite increased marketing investments, while maintaining a conservative outlook on the recovery of tourism demand in Thailand throughout the year [2] - The company plans to increase marketing investments in the Asia-Pacific region over the next few quarters to drive app downloads and user growth, while closely monitoring industry dynamics and adjusting strategies accordingly [2][5] - Strong outbound travel demand is anticipated for 2025, with outbound hotel revenue increasing by over 30% year-on-year, potentially higher without the impacts of the Spring Festival and events in Thailand [2][6] Financial Performance - In Q4 2024, Ctrip's overall revenue showed significant year-on-year growth, with domestic market revenue recovering to pre-pandemic levels and outbound hotel and flight businesses exceeding 2019 levels, with year-on-year growth rates of 30% to 40% [3] - For Q1 2025, domestic hotel night bookings are expected to grow by 7% year-on-year, although average daily rates (ADR) are projected to decline by approximately 5% [4] Business Segments - Ctrip's corporate travel business is expected to maintain rapid growth, similar to 2020, benefiting from the trend of Chinese companies adopting corporate travel management services, with an anticipated growth rate similar to last year's 15% [7] - Ctrip holds a high market share in the transportation sector but a low single-digit market share in the hotel sector, indicating significant growth potential in online hotel bookings [8] International Expansion - Ctrip's overseas hotel take rate is approximately 8%-9%, lower than international giants, while domestic take rates are about 2% and overseas about 4%, including subsidies [13] - The company is focusing on increasing investments in the Asia-Pacific region and preparing for expansion into non-Asian markets such as the Middle East and Europe [9][10] AI and Technology - Ctrip is focusing on enhancing OTA business efficiency through AI applications, exploring personalized recommendations and intelligent customer service to improve operational efficiency and user satisfaction [16][18] - The application of AI in the travel industry is primarily aimed at improving backend efficiency, with many companies still exploring advanced features that customers are willing to pay for [17] Competitive Landscape - The current competition in the overseas OTA market is characterized by optimization efforts from major players like Expedia, while Ctrip is still in an expansion phase [22] - Ctrip's strategy includes maintaining brand exposure and adjusting marketing investments based on market conditions to ensure positive returns [12] Future Projections - Ctrip anticipates that the inbound tourism market will continue to grow, with significant year-on-year increases expected, particularly from Southeast Asia and neighboring countries [23][24] - The company expresses confidence in its growth trajectory due to its comprehensive domestic inventory and ongoing international expansion efforts [25]

Core Viewpoint - Ctrip Group reported strong financial performance for 2024, with revenue of 53.3 billion yuan, a year-on-year increase of 19.5%, and a net profit of 17.1 billion yuan, up 72.1% [2] Financial Performance - In Q4 2024, Ctrip achieved revenue of 12.7 billion yuan, a 23.4% year-on-year growth, and a net profit of 2.2 billion yuan, increasing by 66.3% [2] - The adjusted net profit for the same quarter was 3 billion yuan, reflecting a 13.6% year-on-year growth [2] - The international OTA platform revenue maintained a growth rate of around 70% throughout the year, with Q1 to Q4 growth rates of 80%, 70%, 60%, and 70% respectively [2][3] Market Position and Comparison - Ctrip's total transaction volume reached approximately 1.2 trillion yuan, comparable to Booking's, but with a significantly lower commission rate of about 4.4%, which is roughly one-third of Booking's 14.3% [5][8] - Ctrip's revenue structure differs from international OTA platforms, which rely heavily on commission income, while Ctrip benefits from diversified revenue sources including advertising and financial services [16] AI Deployment and Efficiency - Ctrip is focusing on comprehensive AI deployment to enhance operational efficiency, with AI tools improving user experience and decision-making processes [17][18] - AI applications have reportedly reduced travel planning time by 40% and increased decision-making efficiency by 58% [17] - The company aims to maintain a low commission rate while improving service quality through AI, which is expected to enhance profitability across the tourism supply chain [18] Future Outlook - Ctrip plans to initiate a $400 million stock buyback and distribute $200 million in cash dividends, indicating confidence in future performance [18] - The management expressed optimism about seizing new opportunities in the evolving travel market and enhancing customer experience through innovation [18]

Investment Rating - The report assigns a "Hold" rating for the company with a target price of $65.00, representing a potential upside of 13.4% from the current price of $57.30 [4][5]. Core Insights - The company is expected to achieve significant revenue growth, with projected revenues of RMB 61.1 billion in 2025, reflecting a 14.5% increase from 2024 [3][5]. - Non-GAAP net profit is forecasted to reach RMB 19.0 billion in 2025, showing a modest growth of 5.4% compared to 2024 [3][5]. - The company is experiencing robust domestic travel demand while also seeing a strong recovery in international travel, with outbound travel expected to grow significantly due to increased flight availability and relaxed visa processes [5][6]. - The report highlights the potential for inbound tourism growth, particularly from countries with visa-free access to China, with a projected booking increase of over 100% year-on-year [5][6]. Financial Summary - For the fiscal year ending December 31, 2023, the company reported revenues of RMB 44.5 billion, a 122.2% increase year-on-year, and a non-GAAP net profit of RMB 9.5 billion, up 635.5% [3][6]. - The company’s gross margin is expected to stabilize around 81% in the coming years, with operating profit margins projected to remain around 24% [6][9]. - The balance sheet shows total assets of RMB 219.1 billion in 2023, with total liabilities of RMB 96.1 billion, indicating a healthy equity position [7][10]. Business Segments Performance - The company’s revenue from accommodation bookings, transportation ticketing, and vacation packages is expected to grow by 25.2%, 10.1%, and 38.1% respectively in 2024 [5][6]. - The international business segment, particularly Trip.com, is anticipated to contribute significantly to revenue, with a projected 70% year-on-year growth in Q4 2024 [5][6]. Market Outlook - The report emphasizes the strategic positioning of the company in emerging markets, aiming for market share growth despite potential short-term profit pressures due to international expansion [5][6]. - The company is expected to benefit from macroeconomic factors such as increased consumer spending in the tourism sector, supported by government initiatives like consumption vouchers [5][6].

Investment Rating - The report assigns a rating of "Neutral" for the company, indicating that the expected performance is within a range of -5% to 5% relative to the benchmark index [12]. Core Insights - The company is projected to experience significant revenue growth, with total revenue expected to reach 81.17 billion in 2027, reflecting a compound annual growth rate (CAGR) of approximately 12.67% from 2024 to 2027 [6][8]. - The gross profit margin is anticipated to improve gradually, reaching 82.50% by 2027, indicating strong operational efficiency [7]. - The net profit attributable to the parent company is forecasted to grow steadily, with an expected net profit of 19.64 billion in 2026 and 23.31 billion in 2027 [6][8]. Financial Summary - The company's total assets are projected to increase from 242.58 billion in 2024 to 311.55 billion in 2027, demonstrating robust asset growth [6]. - The current ratio is expected to improve significantly from 1.51 in 2024 to 3.59 in 2027, indicating enhanced liquidity [7]. - The earnings per share (EPS) is forecasted to rise from 26.10 in 2024 to 34.10 in 2027, reflecting strong profitability growth [7][8]. Revenue Breakdown - The revenue from accommodation bookings is expected to grow from 3.48 billion in 2023 to 2.39 billion in 2025, with a year-over-year growth rate of 20% [4]. - Transportation ticketing revenue is projected to increase from 4.16 billion in 2023 to 5.60 billion in 2025, with a year-over-year growth rate of 12% [4]. - The revenue from travel resorts is anticipated to grow significantly, with a year-over-year growth rate of 20% expected in 2025 [4].

Financial Results Overview - Total net revenues for Q4 2023 reached RMB 103.3 million, showing a year-over-year growth of 105.5% and a 3.4% increase compared to Q4 2022 [1] - Accommodation revenue was RMB 39.0 million, with a year-over-year increase of 131.1% [1] - Transportation revenue was RMB 41.1 million, reflecting an 86.3% year-over-year growth [1] - Gross profit for Q4 2023 was RMB 83.2 million, with a gross profit margin of 80.5% [1] - Operating profit was RMB 22.0 million, with an operating profit margin of 21.3% [1] Strategic Focus - The company has implemented AI innovations, such as Trip Genie, leading to a 200% increase in traffic and a 100% increase in browsing time in 2024 [2] - International business accounted for 14% of total revenue in Q4, with a 70% year-over-year growth in online flight and hotel bookings [2] Market Trends and Initiatives - Visa applications for inbound tourism increased by 20%, while visa-free entries grew by 112% [3] - The "Old Friends Club" targets travelers aged 50 and above, representing 10% of the user base with 30% higher purchasing power [3] Sustainability and Social Responsibility - The company supports rural revitalization through eco-friendly resorts, creating job opportunities and enhancing local economies [4] - The MSCI rating improved to "A," and the company is recognized in the UN Global Compact [4] Outlook and Commitment - Strong demand across business segments positions the company for sustainable growth in 2025 [5] - The focus on partnerships aims to drive mutual benefits and economic contributions [5]

Investment Rating - The report maintains a "Buy" rating for the company, with an updated target price of HKD 591 (previously HKD 571) and USD 76 (previously USD 73) [1][5]. Core Insights - The company reported a 4Q24 net revenue of RMB 12.7 billion, a year-on-year increase of 23%, exceeding market expectations by 5% [2]. - The international business is still in an investment phase, but the long-term growth potential is viewed positively, particularly in overseas markets [1][5]. - The company’s gross merchandise volume (GMV) for its core OTA business reached RMB 1.2 trillion (USD 169 billion), reflecting a 9% increase from the previous year, maintaining its position as the largest OTA globally [3]. Financial Performance - 4Q24 adjusted net profit was RMB 3 billion, a 14% year-on-year increase, surpassing market expectations by 6% [2]. - The company’s gross profit margin decreased by 1 percentage point to 79% year-on-year, while marketing expenses rose by 45% due to increased overseas investments [2][5]. - Revenue projections for 2025 have been slightly adjusted, with expected revenue of RMB 61.7 billion, reflecting a 16% year-on-year growth [6][24]. Business Growth Potential - Domestic tourism is expected to grow by 10% in 2025, with the company leveraging its advantages in hotel ADR and air ticket pricing to outperform the industry [4]. - The international business, particularly in the Asia-Pacific region, is projected to contribute significantly to total revenue, with a potential market size 1.5 times that of the domestic market [4]. - The company is focusing on enhancing its one-stop service and mobile platform to capture a larger share of the international market [4]. Shareholder Returns - The company announced a USD 400 million share buyback plan and a dividend of USD 200 million (USD 0.3 per share), indicating a commitment to delivering stable performance and shareholder returns [5].

Investment Rating - The investment rating for the company is "Buy" [8] Core Views - The company reported a revenue of 12.8 billion RMB in Q4 2024, representing a year-over-year increase of 23.5%, exceeding expectations by 3.6% [1] - Adjusted net profit for Q4 was 3 billion RMB, up 13.6% year-over-year, also surpassing expectations by 8.3%, driven by strong growth in international business and inbound travel demand [1][2] - The company is expected to increase its investment in international business over the next two years, which may lead to a slight decline in profit margins in the short term, but this is anticipated to open new growth avenues and greater profit flexibility in the long term [3] Summary by Sections Financial Performance - In Q4, the company’s international OTA platform hotel and flight bookings grew over 70% year-over-year, with international business accounting for 14% of total revenue, up from 10% for the full year 2024 [2] - The inbound travel demand saw a 100% year-over-year increase in bookings, benefiting from favorable visa policies [2] Profitability Outlook - The company’s gross margin for Q4 2024 was 79.1%, showing a slight decline due to the increased proportion of lower-margin international business [3] - Management indicated a focus on expanding overseas operations, which may lead to short-term profit margin pressure but is expected to strengthen the company's global positioning and ensure sustainable profit release in the long run [3] Technology Deployment - The management is focusing on the comprehensive deployment of AI technology in business operations, utilizing extensive real-time travel data for personalized travel recommendations and competitive pricing [4] Earnings Forecast and Valuation - Revenue projections for 2025-2027 are estimated at 61.3 billion, 71.3 billion, and 82.4 billion RMB, respectively, with adjusted net profits of 19.7 billion, 22.5 billion, and 26 billion RMB [5][12] - The target price for the company's US stock is set at $75.50, while the target price for the Hong Kong stock is HKD 563.70, based on a PE valuation method [5][15]

Investment Rating - The report assigns a "Buy" rating for the company, Ctrip Group (9961 HK), with a target price of HKD 605.00, indicating a potential upside of 31.0% from the current price of HKD 462.00 [1][4][17]. Core Insights - The report highlights that increased overseas investments may disrupt short-term profit margins, but there remains room for revenue growth. The company is expected to see significant revenue increases driven by domestic hotel bookings and outbound travel demand [2][7][8]. - The financial outlook for Ctrip Group shows a strong revenue growth trajectory, with projected revenues increasing from RMB 44.56 billion in 2023 to RMB 80.58 billion by 2027, reflecting a compound annual growth rate (CAGR) of approximately 18.5% [3][19]. - Adjusted net profit is forecasted to grow from RMB 13.07 billion in 2023 to RMB 24.61 billion in 2027, with a notable increase in earnings per share (EPS) from RMB 19.48 to RMB 35.72 over the same period [3][19]. Financial Overview - Revenue projections for Ctrip Group are as follows: - 2023: RMB 44,562 million - 2024: RMB 53,377 million - 2025E: RMB 62,291 million - 2026E: RMB 71,022 million - 2027E: RMB 80,583 million - The company is expected to maintain a strong gross profit margin, with projections around 80.9% to 81.2% over the forecast period [3][19][20]. - The report anticipates a decline in net profit margin due to increased marketing expenses related to overseas brand promotion, with net profit margins expected to be around 25.9% in 2025 [7][19]. Market Performance - Ctrip Group's stock has shown a year-to-date decline of 14.44%, with a 52-week high of HKD 586.00 and a low of HKD 310.20 [6][8]. - The company has a market capitalization of approximately HKD 297.57 billion, with an average daily trading volume of 9.92 million shares [6][8]. Future Outlook - The report projects that Ctrip Group will continue to benefit from the recovery in travel demand, particularly in outbound travel, which is expected to exceed pre-pandemic levels [7][8]. - The company is also expected to leverage operational efficiencies and advancements in AI to mitigate short-term profit margin pressures [7][8].