Core Viewpoint - Trip.com (TCOM) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Outlook - The Zacks Consensus Estimate for Trip.com projects earnings of $3.08 per share for the fiscal year ending December 2024, reflecting a year-over-year increase of 12.4% [5]. - Over the past three months, the consensus estimate for Trip.com has risen by 4.9%, indicating a trend of increasing earnings estimates [5]. Impact of Earnings Estimates on Stock Prices - Changes in earnings estimates are strongly correlated with near-term stock price movements, largely due to institutional investors who adjust their valuations based on these estimates [3]. - The upgrade in Trip.com's rating suggests an improvement in its underlying business, which is expected to drive the stock price higher as investors respond to this trend [3][7]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [4]. - The upgrade of Trip.com to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, indicating strong potential for price appreciation in the near term [6][7].

Investment Rating - The report initiates coverage on Trip.com Group-S (09961 HK) with a "Recommend" rating and a target price of HK$506 [1] Core Views - Trip com is a leading one-stop online travel platform in China with a strong domestic market position and high growth potential in international markets [1] - The company's domestic business is stable with a competitive advantage in high-income high-consumption and sticky users while its international business is expected to drive future growth [1][7] - The report forecasts revenue growth of 15 3% 14 0% and 13 5% for 2024-2026 with non-GAAP net profit growth of 20 6% 15 6% and 13 5% respectively [1][8] Business Model and Industry Overview - Online travel platforms (OTAs) are the optimal business model in the travel industry with leading players like Booking and Airbnb achieving high operation margins [13] - The OTA industry in China has grown rapidly with a CAGR of 34 4% from 2013-2019 and is expected to reach RMB2 53 trillion in 2023 [16] - The industry is divided into three main segments: online transportation online accommodation and online vacation with transportation having the highest online penetration rate [18] Domestic Market - Trip com has a strong domestic market position with a deep supply chain and high-quality user base [1][7] - The company has a competitive advantage in high-star hotels and a strong "air + hotel" integrated service offering [47] - Trip com is expanding its user base by targeting younger users and lower-tier cities while also enhancing its content-to-transaction conversion capabilities [51][53] International Market - China's outbound travel penetration rate is relatively low at 12% in 2019 compared to the global average of 26% indicating significant growth potential [1][59] - Trip com is focusing on outbound travel and its overseas platforms (Skyscanner and Trip com) to drive international growth [1][7] - The company's overseas strategy includes leveraging its brand user acquisition and low commission rates to compete with established players like Booking and Expedia [1][7] Financial Performance - Trip com's revenue and non-GAAP net profit reached RMB44 51 billion and RMB13 07 billion in 2023 representing a 24 8% and 100 3% increase compared to 2019 [1][30] - The company's gross margin improved to 81 8% in 2023 while its sales expense ratio decreased to 20 7% reflecting improved operational efficiency [32] Valuation and Forecast - The report values Trip com at 20x 2024 PE with a target market cap of HK$345 7 billion representing a 31% upside from the current price [1][8] - Revenue is expected to grow at a CAGR of 14 3% from 2024-2026 with non-GAAP net profit growing at a CAGR of 16 4% over the same period [8]

Core Viewpoint - Trip.com Group Limited has successfully completed a US$1.5 billion offering of convertible senior notes due 2029, which will be used for debt repayment, overseas business expansion, and working capital needs [1][2]. Group 1: Notes Offering Details - The offering includes an additional US$200 million due to the full exercise of the initial purchasers' option [1] - The notes will bear an interest rate of 0.75% per year, payable semiannually starting December 15, 2024, and will mature on June 15, 2029 [2] - The initial conversion rate is set at 15.0462 American depositary shares (ADSs) per US$1,000 principal amount, translating to an initial conversion price of approximately US$66.46 per ADS [2] Group 2: Regulatory and Legal Information - The notes and the ADSs deliverable upon conversion have not been registered under the Securities Act and may only be offered to qualified institutional buyers [3] - This press release does not constitute an offer to sell or a solicitation of an offer to purchase any of these securities [3] Group 3: Company Overview - Trip.com Group Limited is a leading global one-stop travel platform, providing a comprehensive suite of travel products and services [5] - The company operates under various brands, including Ctrip, Qunar, Trip.com, and Skyscanner, and aims to enhance the travel experience for users [6]

Core Viewpoint - Investors are increasingly seeking growth stocks, particularly in the financial sector, to achieve above-average returns, with Trip.com (TCOM) identified as a promising growth stock due to its favorable metrics and Zacks Rank [1][6]. Earnings Growth - Trip.com has a historical EPS growth rate of 12.8%, with projected EPS growth of 12.4% for the current year, surpassing the industry average of 12.2% [3]. Cash Flow Growth - The company exhibits a remarkable year-over-year cash flow growth of 374.8%, significantly higher than the industry average of -12.3%. Over the past 3-5 years, Trip.com has maintained an annualized cash flow growth rate of 20.9%, compared to the industry average of -2.5% [4]. Earnings Estimate Revisions - There has been a positive trend in earnings estimate revisions for Trip.com, with the Zacks Consensus Estimate for the current year increasing by 5.1% over the past month [5]. Overall Positioning - Trip.com has achieved a Growth Score of B and a Zacks Rank of 2, indicating strong potential for outperformance in the growth stock category, making it an attractive option for growth investors [6][7].

Group 1 - Trip.com currently has an average brokerage recommendation (ABR) of 1.14, indicating a consensus between Strong Buy and Buy, with 88.9% of recommendations being Strong Buy and 5.6% being Buy [1][6] - The Zacks Consensus Estimate for Trip.com has increased by 5.1% over the past month to $3.08, reflecting analysts' growing optimism regarding the company's earnings prospects [6] - The Zacks Rank for Trip.com is 2 (Buy), suggesting a positive outlook based on earnings estimate revisions [6] Group 2 - Brokerage recommendations often exhibit a strong positive bias, with a ratio of five "Strong Buy" recommendations for every "Strong Sell," indicating potential misalignment with retail investors' interests [2][4] - The Zacks Rank is a quantitative model based on earnings estimate revisions, which has shown a strong correlation with near-term stock price movements, making it a more reliable indicator than ABR [5] - The ABR may not always be up-to-date, while the Zacks Rank reflects timely changes in earnings estimates, providing a more accurate indication of future price movements [5]

证券研究报告 | 2024年06月06日 携程集团-S（09961.HK） 优于大市 拟发行 13 亿美元可转换优先票据，积极拓展海外业务  公司研究·公司快评  社会服务·旅游及景区  投资评级：优于大市（维持） 证券分析师： 曾光 0755-82150809 zengguang@guosen.com.cn 执证编码：S0980511040003 证券分析师： 钟潇 0755-82132098 zhongxiao@guosen.com.cn 执证编码：S0980513100003 证券分析师： 张鲁 010-88005377 zhanglu5@guosen.com.cn 执证编码：S0980521120002 联系人： 杨玉莹 0755-81982942 yangyuying@guosen.com.cn 事项： 公司公告：携程集团拟发售13亿美元以现金结算的可转换优先票据（+2亿美元票据选择权），预期6月 7日或前后完成发售。票据年利率为0.75%，每半年付息，2029年6月到期。初始转换率为每1000美元票 据本金额兑换15.0462股美国存托股，即每股约66.46美元，行权时间为到期前最后50个交 ...

SINGAPORE, June 4, 2024 /PRNewswire/ -- Trip.com Group Limited (Nasdaq: TCOM; HKEX: 9961) ("Trip.com Group" or the "Company"), a leading one-stop travel service provider of accommodation reservation, transportation ticketing, packaged tours, and corporate travel management, today announced the pricing of its previously announced offering (the "Notes Offering") of US$1.3 billion in aggregate principal amount of convertible senior notes due 2029 (the "Notes"). The Notes have been offered to persons reasonably ...

Group 1: Travel Industry Overview - The phenomenon of revenge travel has faded, but there remains a bullish case for travel stocks due to the strong U.S. dollar, which enhances American tourists' purchasing power [1] - The Covid-19 pandemic has led to a behavioral shift where consumers prioritize experiential expenditures, supporting the case for travel stocks [1] Group 2: Wyndham Hotels & Resorts (WH) - Wyndham Hotels & Resorts operates as a hotel franchisor with brands like Super 8 and Days Inn, and reported sales of $1.4 billion in 2023, down nearly 7% from $1.5 billion in 2022 [2] - In the trailing 12 months, Wyndham posted a net income of $238 million, translating to earnings per share (EPS) of $2.84 [2] - For the current fiscal year, sales are projected to reach $1.49 billion, an increase of nearly 7%, with EPS expected to rise to $4.36, indicating a growth of just under 28% [3] Group 3: United Airlines (UAL) - United Airlines provides air transportation services and is recovering from the impacts of Covid-19, with 2023 revenue projected at $53.72 billion [4][5] - In 2020, United's sales were $15.36 billion, down 64.5% from $43.26 billion in 2019, but analysts expect revenue to increase by 8.46% to $58.26 billion in the current fiscal year [5] - The airline's net income for the trailing 12 months was $2.69 billion, with EPS at $8.09, and EPS is expected to rise to $10.30, a gain of 30.55% [5] Group 4: Trip.com (TCOM) - Trip.com operates as a travel service provider primarily in China, with a unanimous strong buy rating from analysts and an average price target of $68.06 [6][7] - The company reported revenue of $44.51 billion in 2023, recovering from $18.32 billion in 2020, which was down nearly 49% from $35.67 billion in 2019 [7] - For the current year, sales are expected to grow by 20.2% to $53.5 billion, with EPS projected to rise 47% to $21.72 [7]

Table of Contents Table of Contents Exhibit 99.1 TRIP.COM GROUP LIMITED INDEX TO CONSOLIDATED FINANCIAL STATEMENTS | --- | --- | |---------------------------------------------------------------------------------------------------------------------------------------|-------| | | Page | | Unaudited Interim Condensed Consolidated Statements of Income and Comprehensive Income for the Three-month Periods Ended March 31, | | | 2023 and 2024 | F-2 | | Unaudited Interim Condensed Consolidated Balance Sheets as of D ...

Core Viewpoint - Trip.com Group Limited announced a proposed offering of US$1.3 billion in convertible senior notes due 2029, aimed at qualified institutional buyers, with an option for initial purchasers to buy an additional US$200 million [1][10]. Group 1: Notes Offering Details - The notes will be general unsecured obligations of the company, maturing on June 15, 2029, with a repurchase option for holders on June 15, 2027, at 100% of the principal amount plus accrued interest [3][4]. - The notes will be convertible under certain conditions, with cash settlement upon conversion, and the company may choose to settle in cash, American depositary shares (ADSs), or a combination [5][6]. - The company plans to repurchase up to US$400 million of its ADSs concurrently with the notes offering to offset potential dilution from the conversion of the notes [7]. Group 2: Use of Proceeds - The net proceeds from the notes offering will be used for repaying existing financial indebtedness, expanding overseas business, and meeting working capital needs [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, and operates under brands like Ctrip, Qunar, Trip.com, and Skyscanner [12].