Investment Rating - The report assigns a 12-month rating of "Buy" for Trip.com with a price target of US$76.00, while the current price is US$65.54 [7][26]. Core Insights - Trip.com reported 1Q25 revenues of Rmb13.8 billion, reflecting a 16.2% year-over-year increase, which was largely in line with expectations. The operating expenses were 3.9% below estimates, primarily due to reduced marketing spending, leading to a non-GAAP operating profit of Rmb4.0 billion and a non-GAAP operating profit margin of 29.2%, exceeding expectations [2][3]. - The company demonstrated strong performance across segments, with accommodation revenue rising by 23%, transportation by 8%, and corporate travel by 12% year-over-year. Outbound hotel and air ticket bookings have recovered to over 120% of pre-COVID levels, significantly outperforming the industry's international flight capacity recovery of 83.9% [3][4]. - Management remains optimistic about sustaining growth, supported by resilient demand and favorable policies, indicating confidence in the company's outlook [4][5]. Financial Metrics - Key financial metrics for 1Q25 include net revenue of Rmb13.8 billion, non-GAAP operating profit of Rmb4.0 billion, and non-GAAP net profit of Rmb4.2 billion, which exceeded consensus estimates by 2.2% and 9.2% respectively [6]. - Forecasted revenues for Trip.com are projected to grow from Rmb20.0 billion in 2022 to Rmb96.8 billion by 2029, with net earnings expected to increase from Rmb1.3 billion in 2022 to Rmb34.4 billion by 2029 [6]. - The company is expected to maintain a strong EBIT margin, projected at 28.2% for 2025, with a return on invested capital (ROIC) of 20.4% [6]. Market Position - Trip.com is positioned as a leading travel service provider in China and internationally, operating multiple brands including Trip.com, Ctrip, Skyscanner, and Qunar. The company aims to generate 15-20% of total revenue from international businesses in the next three to five years [11].

Core Insights - Ctrip has released a report predicting the travel trends for the Dragon Boat Festival in 2025, highlighting a diverse development in the tourism market with a steady growth trajectory for domestic travel [1] Group 1: Travel Trends - The domestic surrounding travel bookings for the Dragon Boat Festival are expected to increase by 23% year-on-year, indicating a robust recovery in the tourism market [1] - Popular destinations include Beijing, Shanghai, and Nanjing, with strong travel demand from the Yangtze River Delta, Pearl River Delta, Beijing-Tianjin-Hebei, and Sichuan-Chongqing regions [1] Group 2: Hotel Pricing Dynamics - Hotel prices are set by the hotels themselves, and OTA platforms do not interfere; this leads to price discrepancies for the same room type due to different pricing strategies by agents [2] - It is advised for travelers to monitor hotel price trends and book in advance to secure better deals [2] Group 3: Cultural and Traditional Activities - There is a 50% year-on-year increase in searches for traditional cultural experiences during the Dragon Boat Festival, with activities like dragon boat racing and making zongzi gaining popularity [3] - Notable increases in tourism bookings were observed in Foshan, Hunan, and Zhejiang, with growth rates of 167%, 85%, and 40% respectively for travel orders [3] Group 4: International Travel - Popular international destinations include Japan and South Korea, with a significant interest in short-haul flights [4] - Unique destinations like Egypt and Russia have seen hotel booking increases of 193% and 133% respectively, indicating a growing interest in diverse travel options [4]

Core Insights - Ctrip Group reported a net revenue of 13.8 billion RMB for Q1 2025, a 16% year-on-year increase, with a net profit of 4.3 billion RMB and a gross margin of 81% [1] - The company continues to show resilience in the travel industry recovery, driven by rapid international expansion and technological empowerment [1] Business Performance - All four core business segments of Ctrip achieved double-digit growth: accommodation booking revenue reached 5.5 billion RMB, transportation ticketing revenue was 5.4 billion RMB, vacation travel revenue was 947 million RMB, and business travel management revenue was 573 million RMB [2] - International business became a key growth driver, with overall travel booking volume on the international OTA platform increasing by over 60%, and international revenue share rising from 10% in Q1 2024 to 14% in Q1 2025 [2] - Outbound travel business showed strong performance, with total transaction volume (GTV) recovering to 120% of the same period in 2019, significantly above the industry average [2] - Inbound travel orders increased by approximately 100% year-on-year, driven by the optimization of China's visa-free policies, with hotel bookings from major visa-free regions growing over 240% [2] Technological Empowerment - Ctrip prioritizes AI technology, achieving a 20% reduction in labor costs through applications like intelligent customer service [3] - AI-assisted content production tools reduced content creation time from 8.5 minutes to 15 seconds, with a content qualification rate exceeding 98.9% [3] - The company plans to add 200 international self-service ticketing points by 2025 and enhance digital infrastructure for inbound tourism [3] Global Expansion and Capital Operations - Ctrip is building a competitive moat through global expansion, with a market share exceeding Booking in Southeast Asia, particularly 71% in Indonesia [4] - The company announced a plan to repurchase 400 million USD in stock and distribute 200 million USD in cash dividends, reflecting management's confidence in long-term value [4] - Ctrip's net profit for 2024 reached 17.067 billion RMB, a 72.08% year-on-year increase, supporting the buyback and dividend plans [4] Challenges and Opportunities - Despite strong performance, Ctrip faces short-term challenges, including lower profit margins in Southeast Asia and increased marketing costs in international markets [5] - The management remains optimistic about future growth, targeting a leading position in the Asian market, supported by favorable policies and increased R&D investment [5] - Ctrip's AI customer service has resolved 80% of inquiries, with over 70% automation in after-sales service, saving an average of 10,000 hours of labor daily [5] CEO Statement - Ctrip's CEO highlighted the first-quarter performance as a testament to the platform's advantages and the resilience of travel demand, emphasizing the company's commitment to innovative, localized, and customer-centric travel solutions [6] - The company is transitioning from a single OTA platform to a travel technology giant, with increasing international business share and deepening AI strategy [6]

Group 1: Stock Recommendations - Recommended stocks include Geely Automobile, Xpeng Motors, Zoomlion, Sany Heavy Industry, Atour Group, Luckin Coffee, and Proya, all rated as "Buy" with target price increases ranging from 12% to 37%[5] - The average market capitalization of the recommended stocks is approximately $25 billion for Geely Automobile and $19.7 billion for Xpeng Motors[5] - The average daily trading volume for these stocks varies, with Geely Automobile at $200.2 million and Xpeng Motors at $248.2 million[5] Group 2: Financial Metrics - Price-to-earnings (P/E) ratio for FY24A shows Geely Automobile at 10.90, while Xpeng Motors is not available (N/A)[5] - Return on equity (ROE) for FY24A is highest for Atour Group at 47.5%, while Xpeng Motors is N/A[5] - Dividend yield for FY24A is 1.7% for Geely Automobile and 5.4% for Xpeng Motors[5] Group 3: Performance Review - The basket of 22 stocks listed in the previous report had an average return of 6.0%, compared to the MSCI China Index return of 8.1%[9] - Out of the 22 stocks, 6 outperformed the benchmark index[9]

Group 1 - Trip.com Group Limited held its Q1 2025 earnings conference call on May 19, 2025, featuring key executives including the Executive Chairman, CEO, and CFO [1][3] - The call included a presentation followed by a question-and-answer session, indicating an interactive format for discussing the company's performance and outlook [2] Group 2 - The company emphasized that the discussion would include forward-looking statements, which are subject to risks and uncertainties, and results may differ from those expressed [4]

Group 1 - On May 19, 2025, Ctrip launched a series of initiatives to boost tourism across over 30 provinces in response to the Ministry of Culture and Tourism's theme "Beautiful Mountains and Rivers, Wonderful Journey," including a subsidy of 1 billion yuan [1][5] - Ctrip's senior vice president Wang Wei emphasized the importance of integrating tourism with rural revitalization and urban renewal during the main event held in Ningbo, showcasing the company's commitment to sustainable development in the tourism sector [2][3] - The company introduced a "Ten-Hundred-Thousand" consumption promotion plan in collaboration with Ningbo's tourism sector, featuring ten premium travel routes and significant consumer subsidies to enhance local tourism consumption [3][5] Group 2 - Ctrip's offline stores achieved a record daily transaction volume exceeding 200 million yuan, driven by targeted marketing strategies and collaborative events with various local tourism departments [4] - The company launched a large-scale promotional campaign called "55 Good Price Festival," offering discounts and vouchers worth over 250 million yuan across various travel categories, aiming for a direct transaction volume of 350 million yuan during the event [5][6] - Ctrip's "Envision.2025 Global Partner Conference" is set to take place in Shanghai and Chengdu, inviting over 3,000 tourism executives from 74 countries to discuss global tourism trends and promote inbound tourism to China [9][10] Group 3 - Ctrip initiated the "A Song Tells a City" original music competition to enhance emotional connections with cities, attracting participation from nearly 400 cities and over 5,000 musicians, aiming to promote cultural tourism through music [8][10] - The company is enhancing its services for international tourists by offering free half-day tours in major cities like Shanghai and Beijing, aiming to improve the experience for inbound travelers [9][10] - Ctrip is building a "Tourism+" ecosystem through technological empowerment and innovative models, creating a new landscape for the integration of culture and tourism [10]

Core Viewpoint - Ctrip Group's international business has become a key growth engine, with significant increases in both inbound and outbound travel, contributing to the overall financial performance of the company [2][3]. Financial Performance - In Q1 2025, Ctrip Group reported net operating revenue of 13.8 billion yuan and a net profit of 4.3 billion yuan. The revenue breakdown for major business segments includes accommodation bookings at 5.5 billion yuan, transportation ticketing at 5.4 billion yuan, vacation travel at 0.947 billion yuan, and business travel management at 0.573 billion yuan [2]. International Business Growth - Ctrip's international OTA platform saw travel booking volume increase by over 60% year-on-year, driven by strategic investments and service optimizations in overseas markets [2]. - Inbound travel orders doubled year-on-year, with hotel bookings from major visa-exempt regions in the Asia-Pacific increasing by over 240%. Notable growth was observed from emerging markets such as South Korea, Thailand, Malaysia, and Indonesia [2]. - Outbound travel orders exceeded 120% of pre-pandemic levels in Q1 2025 [2]. Economic Impact - The growth in international and inbound travel has injected liquidity into the market, enhancing foreign exchange consumption and creating job opportunities within the domestic tourism service industry [3]. - Chinese tourists' spending power has significantly contributed to the global tourism market, enhancing China's influence in global tourism consumption [3]. Service and Product Development - Ctrip Group offers a comprehensive range of Chinese tourism products, including accommodation, transportation, attractions, and local experiences. The company aims to become the preferred platform for global travelers visiting China by enhancing product systems and user experiences [4]. - Ctrip is committed to sustainable development, contributing to rural revitalization and job creation, with over 40,000 new jobs generated through its vacation farm initiatives [4]. Management Perspective - The CEO of Ctrip Group emphasized the platform's advantages, the resilience of travel demand, and the company's ability to seize growth opportunities in diverse markets. The focus remains on providing innovative, localized, and customer-centric travel solutions [5].

Company Performance - Trip.com reported quarterly earnings of $0.82 per share, missing the Zacks Consensus Estimate of $0.86 per share, and showing a slight decrease from $0.83 per share a year ago, resulting in an earnings surprise of -4.65% [1] - The company posted revenues of $1.91 billion for the quarter ended March 2025, which was below the Zacks Consensus Estimate by 0.25%, but an increase from $1.65 billion year-over-year [2] - Over the last four quarters, Trip.com has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Outlook - Trip.com shares have declined approximately 5.4% since the beginning of the year, contrasting with the S&P 500's gain of 1.3% [3] - The current consensus EPS estimate for the upcoming quarter is $1.01 on revenues of $2.04 billion, and for the current fiscal year, it is $3.44 on revenues of $8.45 billion [7] - The estimate revisions trend for Trip.com is mixed, leading to a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Leisure and Recreation Services industry, to which Trip.com belongs, is currently ranked in the top 36% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Data and Key Metrics Changes - For Q1 2025, Trip.com Group reported a net revenue of RMB 13.8 billion, representing a 16% increase year over year and a 9% increase quarter over quarter, driven by strong travel consumption and resilient demand across segments [23] - Adjusted EBITDA grew by 7% year over year, reaching RMB 4.2 billion, compared to RMB 4 billion in the same period last year [13][27] - Diluted earnings per ordinary share were RMB 6.09 (US$0.84), while non-GAAP diluted earnings per share were RMB 5.90 (US$0.82) [27][28] Business Line Data and Key Metrics Changes - Accommodation reservation revenue for Q1 was RMB 5.5 billion, a 23% increase year over year and a 7% increase quarter over quarter [23] - Transportation ticketing revenue was RMB 5.4 billion, reflecting an 8% year over year increase and a 13% increase quarter over quarter [24] - Packaged tour revenue reached RMB 947 million, representing a 7% increase year over year and a 9% increase quarter over quarter [25] - Corporate travel revenue was RMB 573 million, a 12% increase year over year but an 18% decrease quarter over quarter, consistent with normal seasonality [26] Market Data and Key Metrics Changes - Inbound travel bookings surged by approximately 100% year over year, with hotel bookings from key visa-free countries in APAC increasing by over 240% [15][16] - Overall bookings on the international OTA platform grew by over 60% year over year, with APAC remaining a major growth engine [14] - Outbound air bookings returned to more than 120% of 2019 levels, outperforming the market by 30-40% [17] Company Strategy and Development Direction - The company is focusing on enhancing its AI capabilities to improve user experience and streamline the travel booking process, with AI tools integrated throughout the customer journey [10][11] - Trip.com aims to capture the growing inbound travel market by enriching its offerings and improving service capabilities, including multilingual support and personalized itineraries [9] - The company is committed to expanding its market presence in both mature and emerging markets, leveraging strategic partnerships and localized operations [8][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of travel demand, supported by strong consumer confidence and favorable policies [29] - The company anticipates continued growth in inbound travel due to favorable visa policies and increased accessibility to China [16][72] - Management noted that leisure travel demand remains strong, with corporate users expecting their travel budgets to grow or remain unchanged by 2025 [48] Other Important Information - The company has repurchased approximately US$84 million of its shares, demonstrating a commitment to delivering value to shareholders [28][80] - Trip.com has launched free city tours for transit travelers in Shanghai and Beijing to enhance visitor experience [17] Q&A Session Summary Question: Insights on AI in the travel industry - Management discussed the strengths of vertical AI agents in providing real-time travel data and enhancing the travel experience, while general AI agents offer broader information [31][32] Question: Performance during the Labor Day holiday - Domestic hotel bookings increased by over 20% year over year, with inbound bookings surging by approximately 150% [36][37] Question: Outbound travel trends and expectations - Outbound bookings have consistently outperformed the industry, with strong growth in long-haul destinations like Europe [39][40] Question: Hotel price trends and outlook - Hotel ADR decreased by high single digits in Q1, but prices stabilized during the Labor Day holiday, with expectations for stabilization due to increasing travel demand [43][44] Question: Consumer sentiment amid macroeconomic conditions - Travel demand remains resilient, with leisure travel demand strong and corporate travel budgets expected to grow or remain stable [47][48] Question: Domestic competitive landscape - Competition in the domestic market is rationalized, with a strong focus on loyalty programs and customer service [51][52] Question: International business marketing strategies - The company is intensifying marketing efforts in Asia, leveraging mobile app user acquisition as a key growth strategy [59][60] Question: Inbound business developments - Inbound travel has seen strong momentum due to favorable policies, with significant growth in bookings [70][72] Question: Sales and marketing expenses outlook - Marketing expenses may fluctuate due to seasonality, but the company aims to improve marketing efficiencies in the long term [75][76] Question: Capital return program updates - The company plans to continue share buybacks and has approved a total amount of US$600 million for this purpose [79][80]

Financial Performance - In Q1 2025, Ctrip Group reported net operating revenue of 13.8 billion, a year-on-year increase of 16% and a quarter-on-quarter increase of 7% [1] - The net profit for the same period was 4.3 billion [1] - Revenue from key business segments included accommodation bookings at 5.5 billion, transportation ticketing at 5.4 billion, travel vacation at 0.947 billion, and business travel management at 0.573 billion [1] International Business Growth - Ctrip's international OTA platform saw overall travel booking volume increase by over 60% year-on-year, attributed to strategic investments in overseas markets and service optimization [1] - The inbound travel business experienced significant growth, with inbound orders increasing by approximately 100% and hotel bookings from major visa-free regions in the Asia-Pacific rising over 240% [2] - Outbound travel orders exceeded 120% of pre-pandemic levels from 2019 in Q1 [1] Market Impact - The rapid growth in international and inbound travel has injected liquidity into the market, enhancing foreign exchange consumption and creating more job opportunities [2] - Chinese tourists' spending power has significantly contributed to the global tourism market, increasing China's influence in global tourism consumption [2] - Ctrip aims to leverage its comprehensive range of Chinese tourism products and strong service capabilities to become the preferred platform for global travelers visiting China [2]