Core Viewpoint - The OTA industry is facing significant scrutiny due to long-standing imbalances between platform and merchant interests, highlighted by an investigation into Ctrip for alleged monopolistic practices [1][2]. Group 1: Regulatory Actions - The State Administration for Market Regulation has initiated an investigation into Ctrip for suspected abuse of market dominance under the Anti-Monopoly Law of the People's Republic of China [1]. - Ctrip has previously faced multiple regulatory discussions since 2025, including being summoned by market regulators in Guizhou, Zhengzhou, and Yunnan for issues related to pricing and anti-competitive practices [1]. - In December 2025, new regulations were issued by the National Development and Reform Commission and other agencies, emphasizing that platform operators must not impose unfair pricing practices on merchants [4][5]. Group 2: Financial Performance - Ctrip reported a net operating revenue of 18.3 billion RMB in Q3 2025, marking a 16% year-on-year increase and a 24% quarter-on-quarter increase [2]. - For the first three quarters of 2025, Ctrip's total revenue reached 47.011 billion RMB, with a net profit attributable to shareholders of 29.013 billion RMB [2]. - The accommodation booking segment contributed over 40% of Ctrip's revenue, indicating its significance in the company's overall financial performance [2]. Group 3: Market Dynamics - The low chain rate in China's hotel industry, at 26.75% for stores and 40.09% for rooms, suggests significant room for growth compared to over 70% in developed countries, indicating a reliance on OTAs for distribution [2]. - Some OTAs exert pressure on hotels regarding pricing and promotions, leading to conflicts where hotels may have to subsidize lower prices while platforms profit [3]. - The imbalance between OTAs and smaller accommodation providers, particularly in the wake of the pandemic, has intensified tensions, especially in the vacation rental sector [3][6]. Group 4: Future Considerations - The emergence of new sales channels, such as live streaming and fragmented retail, is expected to divert some consumers and merchants away from traditional OTAs, prompting a need for these platforms to explore diversified business models [6]. - The necessity of OTAs in the digital age is acknowledged, but there is a call for fair commission structures to prevent merchant losses and ensure sustainable market growth [6].

Core Viewpoint - The article discusses the recent antitrust investigation against Ctrip, highlighting the shift from a reminder to serious action against monopolistic practices in the online travel industry. It emphasizes that antitrust measures aim to ensure fair competition and prevent platforms from exploiting their market dominance to the detriment of merchants and consumers [4][5][14]. Group 1: Antitrust Investigation - The State Administration for Market Regulation has initiated an investigation into Ctrip for alleged monopolistic practices, marking a significant escalation in regulatory scrutiny [4]. - Ctrip holds over 56% of the domestic online travel market and reported a daily net profit of 216 million yuan in Q3 2025, which exceeds the total net profit of the entire A-share tourism sector [5]. Group 2: Platform Dynamics - Platforms, initially designed to connect merchants and consumers, have increasingly become "harvesters," extracting commissions from merchants while inflating prices for consumers [7][10]. - The article notes that platforms like Ctrip have evolved from being helpful intermediaries to monopolistic entities that dictate terms to merchants, often leading to unsustainable business practices for those merchants [11][12]. Group 3: Revenue Models and Practices - Ctrip's commission structure includes three tiers: 10% for basic cooperation, 12% for gold cooperation with price guarantees, and 15% for exclusive partnerships, which can pressure merchants into unfavorable agreements [13]. - The investigation likely stems from practices such as "choose one from two," which restricts merchants' options and creates a coercive environment [13][14]. Group 4: Long-term Business Models - The article argues that a successful business model should focus on creating value for all participants rather than exploiting them, advocating for a shift back to a cooperative approach where platforms help merchants succeed [16][18]. - It emphasizes that sustainable business practices should prioritize long-term relationships and mutual benefits among platforms, merchants, and consumers [19][20]. Group 5: Regulatory Perspective - Effective antitrust measures should restore competition rather than impose blanket restrictions, allowing platforms to innovate while preventing exploitative practices [24][25]. - The article suggests that healthy competition will naturally regulate commission rates and service quality, benefiting both merchants and consumers [24]. Group 6: Conclusion - The article concludes that platforms must remember their original purpose of facilitating commerce rather than dominating it, advocating for a collaborative ecosystem where all parties can thrive [28][29].

Core Viewpoint - Ctrip has faced increasing tensions with merchants due to stagnant commission rates and restrictive practices, leading to a significant backlash from the hospitality industry and regulatory scrutiny [1][2]. Group 1: Commission Structure and Merchant Relations - Ctrip's commission rates have remained unchanged for six years, with overall costs for merchants reaching 30%-40% due to various promotional methods [1][11]. - Merchants report that despite high commission rates, declining traffic and average order values have made it difficult to sustain profitability, leading to sentiments of "working for the platform" [1][7]. - The introduction of the "special label" (特牌) for hotels has created additional burdens, as merchants are often restricted from selling on other platforms, impacting their revenue streams [3][4]. Group 2: Regulatory Actions and Investigations - The National Market Supervision Administration has initiated an antitrust investigation into Ctrip for potential abuse of market dominance, which includes examining practices across hotel and flight bookings [2][15]. - The Yunnan Provincial Tourism Homestay Industry Association has begun collecting evidence of unfair competition against Ctrip, indicating a growing movement among merchants to challenge the platform's practices [3][16]. Group 3: Market Dynamics and Competition - The hospitality market in Yunnan is experiencing a significant imbalance, with merchants relying heavily on Ctrip for bookings, often accounting for 70%-90% of their orders [7][11]. - As competition intensifies, the effectiveness of Ctrip's promotional strategies has diminished, leading to increased costs for merchants without guaranteed returns [10][11]. - Ctrip's market share in the domestic OTA sector is approximately 56%, with its strategic investments further consolidating its dominance [14][15]. Group 4: Future Outlook and Industry Implications - The ongoing antitrust investigation may lead to regulatory changes that could reshape Ctrip's operational practices and its relationship with merchants [15][16]. - Industry experts suggest that while regulatory actions may address some issues, the fundamental challenges of oversupply and insufficient demand in the market remain [16][17]. - Ctrip is actively pursuing international expansion to diversify its growth avenues, indicating a strategic shift in response to domestic market pressures [17][18].

Core Viewpoint - Ctrip has faced increasing tensions with merchants despite its commission rates remaining unchanged for six years, leading to investigations into its market practices and potential antitrust violations [1][3]. Group 1: Commission Structure and Merchant Relations - Ctrip's commission costs for merchants have reached 30%-40%, with many merchants feeling they are working for the platform due to declining traffic and prices [2][3]. - The introduction of promotional tools like "Pyramid" and "Cloud Ladder" has increased the financial burden on merchants, with some reporting costs of several thousand yuan per month just for advertising [2][14]. - Merchants in Yunnan have reported that Ctrip's special label ("Te Pai") restricts their ability to sell on other platforms, leading to significant pushback against Ctrip's practices [5][8]. Group 2: Antitrust Investigations - Ctrip is under investigation by the National Market Supervision Administration for potential monopolistic behavior, which includes its hotel and flight booking services [3][18]. - The investigation may lead to penalties, including fines based on Ctrip's previous annual sales, which could be between 3%-4% of its revenue [19][21]. - The antitrust inquiry is expected to address whether Ctrip has abused its market dominance, particularly through practices that may harm competition [18][19]. Group 3: Market Dynamics and Competition - Ctrip's market share in the hotel and travel sector is projected to reach 56% by the end of 2024, significantly outpacing competitors like Meituan and Fliggy [18]. - The competitive landscape has intensified, with merchants reporting that the effectiveness of advertising has diminished as competition increases, leading to higher costs without guaranteed returns [13][14]. - The overall market for tourism in China is experiencing "involution," where excessive competition is driving down profitability for many operators [20]. Group 4: Future Outlook - Ctrip is focusing on international expansion to seek new growth opportunities, particularly in attracting foreign tourists to China [20][21]. - The company has committed to cooperating with regulatory investigations and aims to maintain its service quality for users and partners [21].

Group 1 - The accounts of well-known figures Jia Guolong and Luo Yonghao have been banned on Weibo due to negative behavior, as stated by Weibo's CEO Wang Gaofei [1] - Jia Guolong responded to accusations from Luo Yonghao, emphasizing that his company, Xibei, has operated legally and has not engaged in any illicit activities [1][2] - Xibei's public relations vice president, Song Xuan, has resigned, citing personal development reasons and the pressure from recent events [4][6] Group 2 - Ctrip has been under investigation by local market regulatory authorities for alleged monopolistic practices, including price manipulation and forced exclusivity [5][7] - Some Moutai provincial direct stores are now allowing eligible taxpayers to purchase the Flying Moutai at a price of 1499 yuan per bottle, without the need to buy additional products [7] - New regulations for the recycling and utilization of used power batteries from electric vehicles will be implemented starting April 1, 2026, focusing on comprehensive lifecycle management [7] Group 3 - Several smartphone manufacturers, including Xiaomi and OPPO, have lowered their annual shipment forecasts by over 20% due to rising upstream supply chain costs [8] - Porsche announced a 10% decrease in global deliveries for 2025, totaling 279,449 vehicles, with significant declines in the European market attributed to supply shortages [12][13] - Gree Electric plans to distribute over 5.58 billion yuan in cash dividends to shareholders, with a payout of 10 yuan per 10 shares [10] Group 4 - Smart has suspended its charging cooperation with multiple charging operators, possibly due to financial pressures [11] - Major banks in the U.S. have reduced their workforce by approximately 10,600 employees, marking the highest reduction in nearly a decade [14] - The AI startup Anthropic has appointed former Microsoft executive Irina Ghose as its General Manager for India [14]

Core Viewpoint - Rosen Law Firm is investigating potential securities claims on behalf of shareholders of Trip.com Group Limited due to allegations of materially misleading business information [1] Group 1: Investigation and Legal Action - Shareholders of Trip.com Group Limited may be entitled to compensation through a class action without any out-of-pocket fees [2] - The Rosen Law Firm is preparing a class action to seek recovery of investor losses [2] Group 2: Stock Performance and Regulatory Issues - Trip.com stock fell 17% on January 14, 2026, after the company disclosed it is under investigation by China's market regulator for potential antitrust violations [3]

Group 1 - The article discusses the role of buy-side hedge professionals who conduct fundamental, income-oriented, long-term analysis across various sectors globally in developed markets [1] - It emphasizes the importance of engaging in discussions about investment ideas and strategies among professionals in the hedge fund industry [1] Group 2 - The article does not provide specific company or industry insights, focusing instead on the general practices and perspectives of hedge fund analysts [2][3]

Group 1 - The article discusses the role of buy-side hedge professionals who conduct fundamental, income-oriented, long-term analysis across various sectors in developed markets globally [1] - It emphasizes the importance of engaging in discussions about investment ideas and strategies among professionals in the hedge fund industry [1] Group 2 - The article does not provide specific company or industry insights, focusing instead on the general practices and perspectives of hedge fund analysts [2][3]

Financial Impact - Ctrip (TCOM) is under investigation for alleged monopolistic practices, with a potential fine estimated at RMB 1.5 billion, representing 4% of its 2024 domestic revenue[2][5] - The financial impact of the fine is considered limited, with a projected net profit margin decrease of 2 percentage points for the 2026 fiscal year[5][10] Revenue Projections - Ctrip's total revenue for the 2026 fiscal year is expected to reach RMB 70.1 billion, reflecting a 13% year-on-year growth[10][11] - Domestic accommodation revenue is projected to grow by 3% year-on-year, while overall accommodation revenue is expected to increase by 13%[10][11] Profitability Metrics - Non-GAAP operating profit for 2026 is estimated at RMB 19.1 billion, a 5% increase from the previous year, with a profit margin of 27%, down 2 percentage points[10][11] - The net commission rate is expected to stabilize at 8.8%, which is within the historical range of 8%-10%[10][11] Market Position and Risks - Ctrip is expected to maintain its leading position in the online travel market, but faces risks of market share loss due to regulatory pressures and competition[8][9] - Potential loss of price-sensitive customers and hotel inventory could occur if Ctrip allows merchants to set their own prices without inventory lock-in[9] Valuation Outlook - Ctrip's valuation may revert to historical levels of 12-15 times earnings, with the stock price potentially dropping to a range of USD 44-55 per ADR[15] - The company’s valuation has been driven by strong revenue growth and profit margin expansion, but regulatory scrutiny may hinder future profitability[15]

Core Viewpoint - The article discusses the antitrust investigation into Ctrip, highlighting it as a stress test for platform governance capabilities from an ESG perspective [2]. Group 1: Antitrust Investigation - The antitrust investigation into Ctrip is not a sudden event but indicates accumulated structural issues within the company [2]. - The investigation focuses on whether Ctrip has abused its market dominance, with a market share of over 50% typically indicating such dominance [5]. - Ctrip's market share in the OTA sector is projected to reach 56% by 2024, solidifying its leading position [5]. - Allegations include practices like "forced choice" for merchants, which have been previously cited in other antitrust cases against major platforms [6][5]. Group 2: Financial Performance - Ctrip's gross margin is approximately 81% and net margin around 33%, comparable to leading companies like Tencent and NetEase [10]. - The majority of Ctrip's revenue comes from accommodation bookings and transportation ticketing, which are typical transaction-based intermediary services [10]. - The high profits of Ctrip are attributed to its control over transaction entry points and pricing, rather than creating new content or relying on unique technology [10]. Group 3: ESG Governance Perspective - The article raises the question of whether monopolistic practices are inherently wrong, emphasizing that achieving market dominance through legal means is not illegal [7]. - Ctrip's high profits have not been reinvested into the industry, raising concerns about its responsibilities as a "chain leader" in the tourism sector [11]. - The structural imbalance of "high profits, low accountability" is a long-standing issue in Ctrip's profit model [12]. - The core responsibility of leading companies is to avoid abusing their market power and to ensure fair competition [13]. Group 4: Market Reaction and Future Implications - Following the announcement of the antitrust investigation, Ctrip's stock price dropped by 18%, indicating market concerns over governance risks [14]. - Ctrip's ESG rating was A in 2025, but there is a noted gap between its compliance commitments and actual business practices [14]. - The investigation may lead to a reassessment of Ctrip's business model and could impact its future operations and ESG ratings [17].