Investment Rating - The report maintains a "Buy" rating for Trip.com Group (9961.HK) [6] Core Views - The company reported Q3 2024 net revenue of 15.873 billion RMB, a year-over-year increase of 15.5%, exceeding Bloomberg consensus expectations [1] - The net profit attributable to shareholders reached 6.765 billion RMB, up 46.6% year-over-year, with Non-GAAP net profit at 5.963 billion RMB, a 21.8% increase year-over-year, significantly surpassing the consensus estimate of 4.773 billion RMB [1][2] - The company’s gross margin for Q3 was 82.4%, with a Non-GAAP operating profit margin of 34.4%, reflecting strong cost control and profitability [2] Revenue and Profitability - Revenue breakdown shows hotel accommodation at 6.802 billion RMB (up 21.7% YoY), transportation ticketing at 5.650 billion RMB (up 5.3% YoY), and vacation revenue at 1.558 billion RMB (up 17.3% YoY) [2] - The company’s international OTA platform saw hotel and flight bookings increase by over 60% year-over-year, indicating robust growth in international markets [2][3] Market Performance - The Asia-Pacific region remains the primary market for Trip.com, with booking volumes growing over 70% [3] - The company has also seen a 100% year-over-year increase in inbound hotel orders, with some hotels participating in overseas promotions experiencing over 200% growth in bookings [3] Financial Forecast - The report projects Non-GAAP net profits for FY2024, FY2025, and FY2026 to be 17.417 billion RMB, 18.997 billion RMB, and 21.407 billion RMB respectively, with corresponding Non-GAAP EPS of 25.48 RMB, 27.79 RMB, and 31.32 RMB [3][5] - The adjusted P/E ratios for the same periods are forecasted to be 18x, 17x, and 15x [3][5] Conclusion - The report expresses optimism regarding the company's ability to outperform the industry in outbound tourism, supported by its strong brand and user base [3]

Investment Rating - The report assigns a "Buy" rating for the company [2]. Core Views - The domestic market remains strong while the overseas market continues to expand [2]. - The company achieved robust performance in Q3 2024, with revenue and adjusted net profit reaching RMB 406.1 billion and RMB 150.0 billion, respectively, representing year-on-year growth of +18.7% and +44.3% [2]. - The strong growth is attributed to robust travel demand during the domestic summer vacation and Golden Week, as well as continued expansion in overseas markets [2]. Summary by Sections Financial Performance - For Q1-Q3 2024, the company reported revenue and adjusted net profit of RMB 406.1 billion and RMB 150.0 billion, respectively, with year-on-year increases of +18.7% and +44.3% [2]. - The company’s revenue for Q3 2024 was RMB 68.0 billion, reflecting a year-on-year growth of +16.2% [2]. - The company’s gross margin improved to 81.8% in Q3 2024, with a net profit margin of 36.9% [2]. Business Segments - The company’s revenue from accommodation bookings, transportation ticketing, and vacation travel for Q1-Q3 2024 was RMB 164.3 billion, RMB 155.2 billion, and RMB 34.7 billion, respectively, with year-on-year growth rates of +23.1%, +8.3%, and +42.3% [2]. - The international OTA platform continued to expand rapidly, with hotel and flight bookings growing over 60% year-on-year in Q3 2024 [2]. Market Outlook - The report anticipates that domestic travel demand will gradually stabilize, while outbound, inbound, and pure overseas markets are expected to maintain strong growth momentum [2]. - The target price for the company is set at USD 71.25, indicating a potential upside of 16.2% from the current stock price of USD 61.32 [2]. Financial Projections - The company’s projected revenue for 2024 is RMB 44,562 million, with a growth rate of 122.2% compared to 2023 [4]. - The projected Non-GAAP net profit for 2024 is RMB 13,071 million, reflecting a year-on-year increase of 910.1% [4]. Shareholder Information - Major shareholders include Baidu Group (8.89%) and Capital World Investors (5.92%) [2].

Investment Rating - Maintain BUY rating with a target price of US$71 0, representing a 15 8% upside from the current price of US$61 32 [1][2] Core Views - Trip com Group (TCOM) reported strong 3Q24 results with total revenue of RMB15 9bn, up 16% YoY, 2% above Bloomberg consensus estimates [1] - Non-GAAP operating income (OP) was RMB5 5bn, 6% better than consensus, driven by optimized sales and marketing spend [1] - Domestic business volume growth exceeded expectations, and outbound business recovery is on track, reaching 120% of 2019 levels in 3Q24 [1] - Incremental investment in international expansion is expected to support long-term revenue and earnings growth [1] - DCF-based target price raised by 8% to US$71 0, reflecting a more positive earnings outlook and valuation rollover to 2025E [1][10] Financial Performance Revenue and Profitability - 3Q24 revenue: RMB15 9bn, up 16% YoY, with domestic hotel reservations growing by mid-to-high-teens YoY and outbound air and hotel reservations recovering to 120% of 2019 levels [1] - Non-GAAP OPM for 3Q24 was 34 4%, 1 5ppts better than consensus, driven by efficient S&M spend [1] - 4Q24E revenue estimated at RMB12 4bn, up 20% YoY, 2% ahead of consensus [1] - Non-GAAP OPM for 4Q24E/2024E estimated at 20 7%/30 3%, compared to 25 6%/29 6% in 4Q23/2023 [1] Segment Performance - Domestic air tickets volume grew by mid-to-high single digits (MHSD) YoY in 3Q24, with a similar trend in 4Q24 QTD [1] - Outbound air and hotel reservations outperformed the industry by ~40ppts, reaching 120% of 2019 levels in 3Q24 [1] - Trip com achieved robust YoY revenue growth of ~60% in 3Q24, driven by strong growth in air tickets and hotel reservations [1] Forecasts - Revenue for 2024E/2025E/2026E estimated at RMB52 985bn/60 765bn/67 886bn, with YoY growth of 18 9%/14 7%/11 7% [5] - Adjusted net profit for 2024E/2025E/2026E estimated at RMB16 811 7bn/17 807 3bn/20 149 2bn, with YoY growth of 28 6%/5 9%/13 2% [5] Valuation and Growth - DCF-based target price of US$71 0, translating into 21 3x/20 7x 2024E/2025E PE (non-GAAP) [1][10] - Non-GAAP OP expected to grow at a 23-25E CAGR of 19% [1] - Gross margin for 2024E/2025E/2026E estimated at 81 5%/81 4%/81 4%, with operating margin at 26 3%/27 4%/28 5% [5][19] International Expansion - Trip com's international expansion, particularly in Asia, is supported by low online penetration and strong supply chain capabilities [1] - The company is expected to achieve a better OPM profile in international markets compared to domestic business, driven by higher AOV for international hotels and higher take rates for international ticketing [1]

Investment Rating - The report maintains a "Buy" rating for Trip.com Group (TCOM) with a target price of $71.00, reflecting an upside potential of 15.8% from the current price of $61.32 [10][19]. Core Insights - Trip.com Group reported solid business growth, with total revenue for Q3 2024 reaching RMB 15.9 billion, a year-on-year increase of 16%, exceeding Bloomberg consensus estimates by 2% [7][8]. - The company’s non-GAAP operating profit for the same period was RMB 5.5 billion, surpassing expectations by 6%, driven by better-than-expected sales and marketing expenditure optimization [7][8]. - The report highlights the robust recovery in outbound travel and the company's ongoing international expansion efforts, which are expected to contribute to long-term revenue and profit growth [7][9]. Financial Performance Summary - For FY 2024, total revenue is projected to be RMB 52.985 billion, representing an 18.9% year-on-year growth [13]. - Non-GAAP net profit is expected to reach RMB 16.812 billion in FY 2024, reflecting a 28.6% increase compared to the previous year [13]. - The report anticipates a compound annual growth rate (CAGR) of 23-25% for non-GAAP operating profit over the next few years [7][9]. Booking and Revenue Growth - The report indicates that domestic hotel bookings in Q3 2024 grew in the mid to high single digits year-on-year, with a similar trend expected to continue into Q4 2024 [8]. - Outbound flight and hotel bookings have recovered to 120% of 2019 levels, outperforming the industry average by approximately 40 percentage points [8][9]. - The company is expected to achieve a revenue of RMB 12.4 billion in Q4 2024, a 20% increase year-on-year, which is above market expectations [8]. Cost Management and Profitability - Trip.com’s non-GAAP operating profit margin for Q3 2024 was 34.4%, exceeding market expectations by 1.5 percentage points, primarily due to better-than-expected sales and marketing expenses [9]. - The report projects that the non-GAAP operating profit margin will reach 20.7% for Q4 2024 and 30.3% for the full year [9]. Valuation Metrics - The target price of $71.00 corresponds to non-GAAP P/E ratios of 21.3x and 20.7x for FY 2024 and FY 2025, respectively [19]. - The report emphasizes a positive outlook on Trip.com’s global expansion, particularly in the Asian market, where online penetration remains low [9][19].

Investment Rating - The report maintains a "Buy" rating for the company, Trip.com Group (9961 HK), with a target price raised to HKD 605.00, indicating a potential upside of 26.5% from the current price of HKD 478.20 [1][5][12]. Core Insights - The company's hotel business has performed better than expected, and the transportation segment is returning to normal growth, leading to an upward revision of revenue forecasts for 2024 and 2025 by 4% and 6% respectively. Trip.com is expected to continue contributing to revenue growth, with manageable investments and losses [1][2]. - The company reported a revenue of RMB 15.9 billion for Q3 2024, a year-on-year increase of 16%, surpassing market expectations. The growth was driven by accommodation (+22%), transportation (+5%), vacation (+17%), and business travel (+11%) segments [2][6]. - Adjusted net profit for Q3 2024 reached RMB 6 billion, a 22% increase year-on-year, exceeding expectations due to optimized cross-selling and effective cost control [2][6]. Financial Forecasts - Total revenue projections for 2024E have been updated to RMB 52.93 billion, reflecting an 18.8% growth rate, while 2025E revenue is forecasted at RMB 60.6 billion, a 14.5% growth rate [4][17]. - The adjusted operating profit for 2024E is expected to be RMB 16.08 billion, with an operating profit margin of 30.4% [4][17]. - The adjusted net profit for 2024E is projected at RMB 17.84 billion, with a net profit margin of 33.7% [4][17]. Performance Metrics - The company has shown a strong recovery in its hotel and transportation segments, with the average daily rate (ADR) pressure easing and outbound travel bookings recovering to 120% of 2019 levels [2][6]. - Marketing expenses have increased by 23% year-on-year, but remain stable as a percentage of revenue at 21% [2][6]. - The company’s gross profit margin is projected to be 81.5% for 2024E, slightly down from 81.7% in the previous forecast [4][17].

Group 1 - Michael Wiggins De Oliveira is an inflection investor, focusing on buying undervalued companies at pivotal moments when their profitability is expected to increase significantly over the next year [1] - The investment strategy emphasizes technology and the Great Energy Transition, including uranium, with a concentrated portfolio of approximately 15 to 20 stocks and an average holding period of 18 months [1] - Michael has over 10 years of experience analyzing companies in the tech and energy sectors, and has built a following of over 40,000 on Seeking Alpha [2] Group 2 - Michael leads the investing group Deep Value Returns, which offers insights through a concentrated portfolio of value stocks, timely updates on stock picks, and a weekly webinar for live advice [3] - The Deep Value Returns community is described as active, vibrant, and supportive, providing accessible chat options for both new and experienced investors [3]

Financial Data and Key Metrics - The hotel occupancy rate in China has surpassed last year's levels, improving from lower than 2023 levels in Q3, partly due to easier comps and more travelers choosing off-peak seasons [1] - Outbound flight and hotel bookings maintained strong year-over-year growth momentum, exceeding 120% of the same period in 2019, with mid- to high double-digit growth in flight and hotel bookings [1] - Trip.com's air and hotel reservations grew robustly by 60-70% year-over-year in Q3, with the APEC region accounting for over 70% of total bookings and showing the fastest growth [3] - Hotel-related revenue accounted for more than 40% of Trip.com's total revenue in Q3, with cross-selling from transportation to hotels continuing to rise [3] - The Trip.com brand contributed around 9% of the group's total revenue, up from 77% in the same period last year [3][4] Business Line Performance - The Trip.com brand's mobile app remained the top channel, contributing 65-70% of global orders and over 70% in the APAC region [3][4] - The company continues to invest in the Trip.com brand, particularly in the international market and the APAC region [4] Market Performance - The China travel market followed normal seasonality post-National Day holiday, with strengthened year-over-year momentum [1] - Outbound flight capacity reached around 80% of the 2019 level in Q3 and exceeded 80% in Q4, with expectations for further improvement in the coming year [2] Strategy and Industry Competition - The company anticipates normalized growth for its China-related business, with continued emphasis on inbound and outbound cross-border travel [1] - Asia is a critical market, representing 50% of GDP growth and 50% of travel industry growth, with a focus on providing a one-stop shopping platform and excellent customer service [4] - The company is investing heavily in technology and AI to improve user experience, coding efficiency, customer service, and content generation [5] Management Commentary on Operating Environment and Future Outlook - The company expects a normalized growth pattern for its China-related business and continued strong growth momentum for the Trip.com brand [1] - Management believes that the expansion and diversification of travel suppliers will significantly contribute to the overall growth of the travel industry [2] - A healthy economic environment is expected to benefit all industries, including travel [3] Other Important Information - The company has achieved efficient operational efficiencies across all expense lines, including cost, product development, and sales marketing expenses, with marketing expenses as a percentage of gross bookings being less than 1% [7][8] - The company anticipates an expanded capital return program for 2025, potentially including dividends and buybacks, subject to board approval [7] Q&A Summary Question: Recent performance post-National Day holiday and 2025 outlook [1] - Post-National Day holiday, the China travel market followed normal seasonality with strengthened year-over-year momentum, and the company expects normalized growth for its China-related business with continued emphasis on cross-border travel Question: Hotel price changes, China hotel inventory growth, and 2025 outlook [2] - Hotel prices are still below last year's levels, and the number of hotels in China listed on the platform was 6-7% higher compared to last year, with expectations for long-term growth from the expansion and diversification of travel suppliers Question: Outbound flight capacity changes and recovery timeline [2] - Outbound flight capacity reached around 80% of the 2019 level in Q3 and exceeded 80% in Q4, with expectations for further improvement in the coming year Question: Changes in traveler overspending and impact of stimulus measures [3] - A healthy economic environment is expected to benefit all industries, including travel Question: Operational and financial performance for Q3 [3] - Trip.com's air and hotel reservations grew robustly by 60-70% year-over-year, with the APEC region accounting for over 70% of total bookings and showing the fastest growth Question: Strategy in Asia and market share growth [4] - Asia is a critical market, and the company focuses on providing a one-stop shopping platform, excellent customer service, and leveraging its volume to drive good products to customers Question: AI initiatives and operating highlights [5] - The company invests heavily in AI to improve user experience, coding efficiency, customer service, and content generation, with AI expected to enhance operational efficiency and user engagement Question: Financial impact of AI in the short-term and long-term [6] - The financial impact of AI investments has been minimal so far, but operational improvements from AI are expected to eventually reflect in financial performance Question: Capital usage and operating leverage [7] - The company anticipates an expanded capital return program for 2025, potentially including dividends and buybacks, and aims to enhance marketing efficiencies across all markets Question: Marketing expenses and operational efficiencies [8] - Marketing expenses as a percentage of gross bookings were less than 1%, benefiting from high customer loyalty and strong cross-selling, with expectations for increased marketing expenses in Q4 due to seasonality

Group 1: Earnings Performance - Trip.com reported quarterly earnings of $1.25 per share, exceeding the Zacks Consensus Estimate of $0.91 per share, and up from $1 per share a year ago, representing an earnings surprise of 37.36% [1] - The company has surpassed consensus EPS estimates in all four of the last quarters [2] - Trip.com posted revenues of $2.26 billion for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 2.93%, compared to year-ago revenues of $1.88 billion [2] Group 2: Stock Performance - Trip.com shares have increased approximately 65.2% since the beginning of the year, significantly outperforming the S&P 500's gain of 23.1% [4] - The current consensus EPS estimate for the upcoming quarter is $0.57 on revenues of $1.71 billion, and for the current fiscal year, it is $3.36 on revenues of $7.35 billion [8] Group 3: Industry Outlook - The Leisure and Recreation Services industry, to which Trip.com belongs, is currently ranked in the top 8% of over 250 Zacks industries, indicating a favorable outlook [9] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that investors should monitor these revisions closely [6]

Financial Performance - In Q3 2024, Trip.com Group reported a net revenue of RMB 15.9 billion (USD 2.3 billion), representing a 16% year-over-year increase, driven by strong travel demand[8]. - The company's net profit for Q3 2024 was RMB 6.8 billion (USD 970 million), compared to RMB 4.6 billion in the same period of 2023, marking a significant increase[11]. - Adjusted EBITDA for Q3 2024 was RMB 5.7 billion (USD 880 million), up from RMB 4.6 billion in Q3 2023[11]. - The revenue from accommodation bookings was RMB 6.8 billion (USD 969 million), a 22% increase year-over-year, while transportation ticketing revenue was RMB 5.7 billion (USD 850 million), up 5% year-over-year[8]. - Total revenue for the three months ended September 30, 2023, was RMB 13,751 million, a decrease of 5.5% compared to RMB 14,556 million for the same period in 2022[26]. - Net income attributable to Trip.com Group Limited for the three months ended September 30, 2023, was RMB 4,615 million, representing a 20.5% increase from RMB 3,833 million in the same period of the previous year[31]. - The gross profit for the three months ended September 30, 2023, was RMB 11,273 million, with a gross margin of approximately 82%[26]. - Adjusted EBITDA for the three months ended September 30, 2023, was RMB 4,622 million, with an adjusted EBITDA margin of 34%[39]. - The company reported a basic earnings per share of RMB 7.05 for the three months ended September 30, 2023, compared to RMB 5.84 for the same period in 2022, reflecting a year-over-year increase of 20.7%[32]. - The company expects total revenue for the three months ending June 30, 2024, to be approximately RMB 12,788 million, indicating a projected growth of 6.5% compared to the same period in 2023[26]. Operational Highlights - Hotel and flight bookings on the international OTA platform grew by over 60% year-over-year, with outbound hotel and flight bookings fully recovering to 120% of pre-pandemic levels[5][6]. - Research and development expenses for Q3 2024 were RMB 3.6 billion (USD 519 million), a 2% increase year-over-year, reflecting rising costs associated with R&D personnel[9]. - Sales and marketing expenses rose to RMB 3.4 billion (USD 482 million), a 23% increase year-over-year, due to higher costs related to sales and marketing activities[9]. - Research and development expenses for the three months ended September 30, 2023, were RMB 3,577 million, an increase of 19.5% from RMB 2,993 million in the same period of the previous year[26]. - The company reported a significant increase in user data, with a total of 5,589 million in accommodation bookings for the three months ended September 30, 2023[26]. - Trip.com Group Limited is focusing on market expansion and new product development to enhance its competitive position in the travel industry[26]. Financial Position - As of September 30, 2024, the company had cash and cash equivalents totaling RMB 86.9 billion (USD 12.4 billion)[12]. - Ctrip Group reported a total asset increase from RMB 219,137 million as of December 31, 2023, to RMB 244,300 million by September 30, 2024, representing an increase of approximately 11.5%[22]. - The company's cash and cash equivalents decreased from RMB 43,983 million to RMB 41,982 million, a decline of about 4.5%[22]. - Total liabilities rose from RMB 96,131 million to RMB 104,173 million, indicating an increase of approximately 8.5%[24]. - Shareholders' equity increased from RMB 122,184 million to RMB 138,410 million, reflecting a growth of around 13.3%[24]. Strategic Outlook - The company expressed optimism about the continued growth of the travel industry, driven by consumer confidence and a surge in travel enthusiasm[7]. - Trip.com Group is committed to leveraging AI technology as a core driver for shaping the future of the global travel industry[7]. - Ctrip Group's mission is to provide a comprehensive travel platform for both Chinese tourists and international travelers, emphasizing high-quality travel experiences[20]. - The company operates under several brands, including Ctrip, Qunar, Trip.com, and Skyscanner, aiming to inspire travel exploration and support users throughout their journeys[20]. - Ctrip Group's reliance on partnerships with suppliers and competitors poses risks, particularly in managing growth rates and strategic investments[19]. - The company has faced challenges related to economic fluctuations and regulatory dynamics affecting its operations in various jurisdictions[19]. - Ctrip Group's financial data includes non-GAAP measures to provide a clearer picture of its operational performance, although these measures may not align with other companies' non-GAAP data[19].

Core Insights - Trip.com Group Limited reported strong financial results for Q3 2024, with net revenue increasing by 16% year-over-year to RMB15.9 billion (US$2.3 billion) [2][3] - The company experienced robust growth in international businesses, with outbound hotel and air reservations reaching approximately 120% of pre-COVID levels from 2019 [2][3] - The travel industry is expected to continue its growth trajectory, driven by increasing consumer confidence and advancements in AI technology [2] Financial Performance - Net income for Q3 2024 was RMB6.8 billion (US$970 million), up from RMB4.6 billion in Q3 2023 [3] - Adjusted EBITDA for the quarter was RMB5.7 billion (US$808 million), an increase from RMB4.6 billion in the same period last year [3] - Accommodation reservation revenue rose by 22% year-over-year to RMB6.8 billion (US$969 million), while transportation ticketing revenue increased by 5% to RMB5.7 billion (US$805 million) [3] Revenue Breakdown - Packaged-tour revenue grew by 17% year-over-year to RMB1.6 billion (US$222 million) [3] - Corporate travel revenue increased by 11% to RMB656 million (US$93 million) [3] - The cost of revenue for Q3 2024 was RMB2.8 billion (US$399 million), reflecting a 13% increase from the previous year [3] Operational Highlights - The company noted a significant increase in accommodation reservations, with a 32% rise from the previous quarter [3] - Sales and marketing expenses rose by 23% year-over-year to RMB3.4 billion (US$482 million), driven by promotional activities [3] - As of September 30, 2024, the company had cash and cash equivalents totaling RMB86.9 billion (US$12.4 billion) [3]