Investment Rating - The report maintains a "Recommend" rating for Trip.com Group-S (9961 HK) [3][4] Core Views - Trip com s Q2 2024 performance exceeded expectations driven by outbound and overseas business growth [2] - Non GAAP net profit reached RMB 5 billion up 45 YoY with a Non GAAP profit margin of 39 [2] - Adjusted EBITDA was RMB 4 4 billion with a margin of 35 [2] - The company s outbound hotel and flight bookings have fully recovered to 100 of 2019 levels surpassing the industry average recovery rate of 70 [2] - Trip com s international OTA platform revenue grew 70 YoY maintaining a high growth rate [2] Business Performance - Q2 2024 net revenue was RMB 12 8 billion up 14 YoY [2] - Accommodation revenue grew 20 YoY to RMB 5 1 billion while transportation revenue increased only 1 YoY to RMB 4 9 billion [2] - Vacation package revenue surged 42 YoY to RMB 1 billion and corporate travel revenue rose 8 YoY to RMB 633 million [2] - Gross margin stood at 81 9 slightly down 0 26 pct YoY [2] - R&D and management expenses decreased 1 8 and increased 6 0 respectively with sales expenses rising 1 2 pct YoY [2] Growth Drivers - Outbound travel recovery and pure overseas markets are key growth drivers [2] - Domestic hotel ADR and average airfare prices declined but Chinese site hotel bookings grew 20 YoY [2] - Trip com s international business continues to expand with Trip com platform revenue growing 70 YoY [2] Financial Forecasts - 2024 2026 Non GAAP net profit is projected to be RMB 16 505 billion RMB 19 194 billion and RMB 21 858 billion respectively [3] - Non GAAP EPS for 2024 2026 is estimated at RMB 24 15 RMB 28 08 and RMB 31 98 [3] - Adjusted PE ratios for 2024 2026 are 14x 12x and 10x based on the closing price on August 27 2024 [3] Valuation Metrics - 2024 2026 revenue growth rates are forecasted at 17 5 16 4 and 14 5 respectively [4] - Adjusted net profit growth rates for 2024 2026 are 26 16 and 14 [4] - P E ratios based on adjusted net profit are 14x 12x and 10x for 2024 2026 [4] - P B ratios are projected at 1 7x 1 5x and 1 3x for 2024 2026 [4]

携程集团-S（09961.HK） 优于大市 二季度经调净利润同比增长 45%，经营效能再次验证 | --- | --- | --- | --- | --- | --- | |--------------------------------------------------------------|------------|-----------|-----------|-----------|-----------| | 盈利预测和财务指标 | 2022 | 2023 | 2024E | 2025E | 2026E | | 营业收入(百万元) | 20,039 | 44,510 | 52,428 | 61,312 | 71,044 | | (+/-%) | 0.1% | 122.1% | 17.8% | 16.9% | 15.9% | | 经调整净利润(百万元) | 1294 | 13071 | 16420 | 19153 | 22276 | | (+/-%) | -4.6% | 910.1% | 25.6% | 16.6% | 16.3% | | 每股收益（元） | 1.89 | 19.12 | 24.0 ...

Investment Rating - The report reiterates a "BUY" rating for Trip.com Group (TCOM) with a target price of US$65.80, indicating a potential upside of 55.4% from the current price of US$42.34 [2][10]. Core Insights - Trip.com Group reported a net revenue of RMB12.8 billion for 2Q24, reflecting a year-over-year growth of 13.6%, which aligns with Bloomberg consensus estimates. The non-GAAP operating income was RMB4.2 billion, exceeding consensus forecasts by 6% due to effective cost control in R&D [2][3]. - The company is expected to experience resilient revenue growth driven by strong travel demand from its high-end customer base during the summer peak season, despite facing macroeconomic challenges and tougher comparisons in 3Q24 [2][3]. - The management anticipates a reacceleration in year-over-year revenue growth in 4Q24 as the impact of business adjustments diminishes and comparisons become easier [2][3]. Financial Performance Summary - For FY24E, Trip.com is projected to achieve revenue of RMB52.8 billion, representing an 18.5% year-over-year growth. The adjusted net profit is expected to reach RMB16.4 billion, with a year-over-year growth of 25.8% [3][8]. - The non-GAAP operating profit margin (OPM) for 2Q24 was reported at 33.1%, which is 1.9 percentage points higher than consensus estimates, driven by better-than-expected R&D expense ratios [2][3]. - The company achieved a gross profit margin of 81.8% for FY24E, with an operating margin of 27.5% and a non-GAAP net margin of 31.2% [8][9]. Revenue Breakdown - Domestic hotel reservations grew approximately 20% year-over-year in 2Q24, with double-digit growth continuing in 3Q24. Outbound air and hotel reservations have recovered to 110%-120% of 2019 levels, outperforming the market by 20-30% [2][3]. - Revenue from inbound travel accounted for 25% of total revenue in 2Q24, up from 20% in 1Q24, contributing approximately 2.6% to the total group-level revenue [2][3]. Future Projections - For 3Q24E, Trip.com is estimated to record revenue of RMB15.6 billion, reflecting a 13% year-over-year increase, consistent with Bloomberg consensus [2][3]. - The company expects to maintain a non-GAAP OPM of 33.1% for 3Q24E, with projections for FY25E showing continued growth in revenue and profitability [2][3].

Key TakeawaysOnline travel platform Trip.com Group reported better-than-expected profit and sales as demand for cross-border and holiday travel surged.The biggest Chinese online travel service said revenue for the latest quarter was boosted by the resilience of travel consumption in China.Trip.com's sales for accommodation reservations, transportation ticketing, package tours, and corporate travel were all higher.Its U.S.-listed shares jumped nearly 9% Tuesday after the earnings news was released. U.S.-list ...

Key TakeawaysShares of companies in the travel industry moved higher Tuesday, aided by strong earnings results from Singapore-based travel platform Trip.com.Stocks posting gains included cruise operators Norwegian Cruise Line, Royal Caribbean, and Carnival, as well as online travel platform Expedia.Cruise operators received an additional boost from a Zacks Equities Research report highlighting the industry's booking and pricing trends. Shares of travel-industry companies moved higher on Tuesday, lifted by t ...

分组1 - Trip.com reported quarterly earnings of $1 per share, exceeding the Zacks Consensus Estimate of $0.74 per share, and up from $0.70 per share a year ago, representing an earnings surprise of 35.14% [1] - The company posted revenues of $1.76 billion for the quarter ended June 2024, which was 2.52% below the Zacks Consensus Estimate, but an increase from $1.55 billion year-over-year [1] - Over the last four quarters, Trip.com has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [1] 分组2 - The stock has gained approximately 17.1% since the beginning of the year, compared to the S&P 500's gain of 18.1% [2] - The current consensus EPS estimate for the upcoming quarter is $0.94 on revenues of $2.19 billion, and for the current fiscal year, it is $3.20 on revenues of $7.31 billion [4] - The Leisure and Recreation Services industry, to which Trip.com belongs, is currently ranked in the bottom 39% of over 250 Zacks industries, indicating potential underperformance compared to higher-ranked industries [5]

Core Insights - Trip.com is the leading online travel agent in China, holding an estimated 50% market share and expanding in Southeast Asia [3] - The company has experienced rapid profit growth as travel restrictions ease, with a projected increase in earnings per ADS from approximately $2 last year to about $3 this year [4][9] - The Chinese travel market is expected to grow faster than the overall economy, driven by increased discretionary spending [10] Company Performance - In Q2 FY2024, Trip.com reported a revenue increase of approximately 14% year-over-year, with adjusted non-GAAP earnings growing by around 47% [4] - Accommodation reservations are the primary profit driver, while flight prices are moderating as capacity increases [4] - The company generated about $1.6 billion in free cash flow during FY2023, with no dividends paid and limited share buybacks [11] Market Position - Trip.com owns major brands like Ctrip and Qunar, controlling about 36% of the Chinese market, significantly larger than its nearest competitor [7] - The business model is similar to that of Booking and Airbnb, focusing on driving traffic to its platform [7] - Despite competition from platforms like Douyin, Trip.com is expected to maintain a strong market share due to its extensive accommodation options [8] Industry Outlook - The Chinese travel industry is projected to grow at rates exceeding GDP growth, fueled by pent-up demand and increased consumer spending [10][9] - International travel is recovering, with flight capacity reaching 70% of pre-COVID levels, indicating ongoing growth potential [5][6] - The overall economic growth in China is expected to be around 5% in 2024, supporting the services sector, including tourism [9] Valuation and Governance - Trip.com trades at a forward earnings multiple of approximately 14X, which is considered attractive given its growth prospects [11] - Concerns exist regarding corporate governance and shareholder returns, as the company has not initiated significant buybacks or dividends [12][11] - The lack of transparency in capital allocation and potential risks associated with Variable Interest Entities (VIEs) are noted [11][12]

Financial Data and Key Metrics - Net revenue for Q2 2024 was RMB12.8 billion, a 14% YoY increase and a 7% QoQ increase, driven by strong recovery in the travel market [23] - Adjusted EBITDA margin for Q2 was 35%, up from 33% in the same period last year [25] - Diluted earnings per ordinary share and per ADS were RMB5.57 ($0.77) for Q2 2024, with non-GAAP diluted earnings per share at RMB7.25 ($1) [25] - Cash and cash equivalents, restricted cash, short-term investments, and financial products totaled RMB99.0 billion ($13.6 billion) as of June 30, 2024 [26] Business Line Data and Key Metrics - Accommodation reservation revenue grew 20% YoY to RMB5.1 billion, with outbound hotel bookings fully recovering to 2019 levels [23] - Transportation ticketing revenue increased 1% YoY to RMB4.9 billion, with outbound air ticket bookings also fully recovering to 2019 levels [23] - Package tour revenue surged 42% YoY to RMB1.0 billion, driven by strong growth in outbound package tours [24] - Corporate travel revenue rose 8% YoY to RMB633 million, supported by increased adoption of managed corporate travel services [24] Market Data and Key Metrics - Outbound travel bookings recovered to 100% of 2019 levels, outperforming the industry average by 20%-30% [13] - APAC destinations like Japan, Thailand, and Malaysia saw strong resurgence, with long-haul destinations such as France and Europe experiencing over 100% YoY growth in summer travel [13][14] - Inbound travel to China surged 150% YoY, with visa-free country visitors increasing by 190% [8] - International OTA platform revenue grew 70%, with APAC revenue increasing 76% YoY [16] Company Strategy and Industry Competition - The company is leveraging AI to enhance user experience, with tools like Trip.Best, TripTrends, and TripGenie providing personalized recommendations and real-time insights [9][10][30] - Mobile-first strategy continues to drive growth, with 65% of international OTA transactions and 75% in Asia conducted via mobile platforms [16] - The company is collaborating with 27 cities and 22 local airports to boost regional tourism and connectivity [15] - Sustainability initiatives, such as promoting electric vehicle rentals and solar panel installations, have improved the company's MSCI rating from BB to A [21] Management Commentary on Operating Environment and Future Outlook - Travel demand remains resilient, with strong interest in both domestic and international travel [12][13] - The company expects travel activities in H2 2024 to follow normal seasonal patterns, with favorable YoY comparisons post-National Day holiday [37] - AI is seen as a transformative force in the travel industry, with potential to revolutionize user experiences and operational efficiency [11][30] Other Important Information - The company launched the Old Friends Club for senior travelers, generating over RMB1.6 billion in spending year-to-date [18] - Entertainment-plus-travel products saw a 70% YoY increase in GMV, reflecting strong demand from younger travelers [20] - The company introduced a Family Card feature to assist elderly travelers with trip planning, catering to the evolving preferences of the silver generation [19] Q&A Session Summary Question: Why did the company use digital humans for the earnings call? - The use of digital humans underscores the company's commitment to innovation and highlights the potential of AI in transforming communication and user engagement [29] Question: How is travel demand holding up amid China's consumption slowdown? - GMV per traveler remains consistent, with strong interest in both domestic and international travel, indicating resilient travel demand [33] Question: What are the summer travel booking trends and H2 outlook? - Outbound travel bookings exceeded 2019 levels by 110%-120%, with domestic hotel reservations showing double-digit YoY growth [36] - The company expects normal seasonal patterns in H2, with robust growth in global markets [37] Question: What is the domestic ADR trend and its impact on business? - Domestic ADR and airfares decreased YoY but improved sequentially, with increased supply and outbound travel drawing mid-to-high-end travelers [40] - ADR pressure is expected to ease in Q4, with long-term benefits from supply expansion [41] Question: How is outbound travel recovering, and what are the pricing trends? - Outbound flight capacity recovered to nearly 80% of 2019 levels, with airfares 5%-10% above pre-COVID levels [45] Question: What are the key drivers of Trip.com's Q2 performance and margin trends? - Trip.com achieved 70% revenue growth, with APAC contributing over 70% of total revenue [48] - Margins are expected to follow seasonal patterns, with Q3 typically being the strongest [56] Question: How does the company differentiate itself in international markets? - The company offers one-stop travel services through its mobile app, focusing on product innovation and service quality to enhance user experience [52][53] Question: What are the company's AI initiatives and their business impact? - AI tools like Trip.Best, TripTrends, and TripGenie drive consumer awareness, improve trip planning, and enhance operational efficiency [59][60] Question: What are the opportunities in China's inbound travel market? - Inbound travel to China represents a significant opportunity, with bookings growing 200% YoY and contributing over 25% to Trip.com's revenue [64] Question: What is the company's M&A strategy and capital return policy? - The company prioritizes organic growth and synergies among existing brands, with a focus on sustainable competitive advantages [67] - Capital allocation focuses on growth investments, disciplined cost management, and consistent shareholder returns through dividends or buybacks [68]

Revenue Growth - Net revenue for Q2 2024 increased by 14% YoY to RMB12.8 billion (US$1.8 billion)[1] - Accommodation reservation revenue grew 20% YoY to RMB5.1 billion (US$707 million) in Q2 2024[1] - Transportation ticketing revenue increased 1% YoY to RMB4.9 billion (US$670 million) in Q2 2024[1] - Packaged-tour revenue surged 42% YoY to RMB1.0 billion (US$141 million) in Q2 2024[2] - Revenue from accommodation reservation grew from RMB 4,285 million in June 2023 to RMB 5,136 million in June 2024, a 19.9% increase[7] Net Income and Profitability - Net income for Q2 2024 was RMB3.9 billion (US$535 million), compared to RMB648 million in Q2 2023[2] - Net income attributable to Trip.com Group Limited rose from RMB 631 million in June 2023 to RMB 3,833 million in June 2024, a 507.1% surge[8] - Non-GAAP diluted earnings per ADS for Q2 2024 was RMB7.25 (US$1.00)[3] - Non-GAAP net income attributable to Trip.com Group Limited increased from RMB 3,434 million in June 2023 to RMB 4,985 million in June 2024, a 45.2% growth[9] - Earnings per ADS (Basic) rose from RMB 0.97 in June 2023 to RMB 5.84 in June 2024, a 502.1% increase[8] Adjusted EBITDA and Margins - Adjusted EBITDA for Q2 2024 was RMB4.4 billion (US$611 million), with a margin of 35%[2] - Adjusted EBITDA margin improved from 33% in June 2023 to 35% in June 2024[9] - Adjusted EBITDA increased from RMB 3,678 million in June 2023 to RMB 4,436 million in June 2024, a 20.6% growth[9] Financial Position and Assets - Total assets increased from RMB 219,137 million in December 2023 to RMB 247,823 million in June 2024, a growth of 13.1%[6] - Cash, cash equivalents, and restricted cash increased from RMB 43,983 million in December 2023 to RMB 51,553 million in June 2024, a 17.2% rise[6] - Short-term investments nearly doubled from RMB 17,748 million in December 2023 to RMB 38,216 million in June 2024, a 115.3% increase[6] - Total current liabilities grew from RMB 72,411 million in December 2023 to RMB 92,116 million in June 2024, a 27.2% rise[6] Operational Recovery and Expenses - Domestic and international hotel reservations recovered to 100% of pre-COVID levels in Q2 2024[1] - Sales and marketing expenses increased 20% YoY to RMB2.8 billion (US$390 million) in Q2 2024[2] Capital Market Activities - The company completed a US$1.5 billion convertible senior notes offering in June 2024[3]

Financial Performance - Q2 2024 net revenue increased by 14% year-over-year to RMB 12.8 billion (USD 1.8 billion)[4] - Q2 2024 net profit reached RMB 3.9 billion (USD 535 million), compared to RMB 648 million in the same period of 2023[3] - Q2 2024 adjusted EBITDA was RMB 4.4 billion (USD 611 million), with an adjusted EBITDA margin of 35%, up from 33% in the same period of 2023[5] - Net revenue for the six months ended June 30, 2024, was RMB 24,677 million (USD 3,395 million), up from RMB 20,445 million in the same period in 2023[16] - Gross profit for the six months ended June 30, 2024, reached RMB 20,127 million (USD 2,769 million), compared to RMB 16,801 million in 2023[16] - Operating profit for the six months ended June 30, 2024, was RMB 6,870 million (USD 945 million), up from RMB 5,218 million in 2023[16] - Net profit attributable to Trip.com Group Limited for the six months ended June 30, 2024, was RMB 8,145 million (USD 1,121 million), compared to RMB 4,006 million in 2023[17] - Basic earnings per share for the six months ended June 30, 2024, were RMB 12.46 (USD 1.71), up from RMB 6.14 in 2023[17] - Net profit for Q2 2024 reached RMB 3,833 million (USD 535 million), a significant increase from RMB 648 million in Q2 2023[18] - Adjusted EBITDA for Q2 2024 was RMB 4,436 million (USD 611 million), with an adjusted EBITDA margin of 35%[18] - Diluted earnings per share (non-GAAP) for Q2 2024 were RMB 7.25 (USD 1.00), up from RMB 5.11 in Q2 2023[19] - Operating profit for the six months ending June 30, 2024, was RMB 6,870 million (USD 945 million)[18] - The company reported a net profit (non-GAAP) of RMB 4,985 million (USD 686 million) for Q2 2024, compared to RMB 3,434 million in Q2 2023[18] - The company's net profit (non-GAAP) for the six months ending June 30, 2024, was RMB 9,040 million (USD 1,244 million)[18] Revenue Breakdown - Accommodation booking revenue in Q2 2024 increased by 20% year-over-year to RMB 5.1 billion (USD 707 million)[4] - Travel package revenue in Q2 2024 surged by 42% year-over-year to RMB 1 billion (USD 141 million)[4] - Revenue from accommodation booking for the six months ended June 30, 2024, was RMB 9,632 million (USD 1,325 million), compared to RMB 7,765 million in 2023[16] - Revenue from transportation ticketing for the six months ended June 30, 2024, was RMB 9,871 million (USD 1,358 million), compared to RMB 8,970 million in 2023[16] - Revenue from travel packages for the six months ended June 30, 2024, was RMB 1,908 million (USD 263 million), up from RMB 1,108 million in 2023[16] Travel and Booking Trends - Domestic hotel bookings on the company's Chinese platform increased by approximately 20% year-over-year, driven by rapid growth in outbound and local travel[3] - Outbound hotel and flight bookings fully recovered to 100% of pre-pandemic levels in 2019, significantly surpassing the industry average international flight recovery rate of over 70%[3] - Total revenue from the company's international OTA platform grew by approximately 70% year-over-year[3] Financial Position and Assets - As of June 30, 2024, the company's cash and cash equivalents, restricted cash, short-term investments, and time deposits and wealth management products totaled RMB 99 billion (USD 13.6 billion)[6] - Cash, cash equivalents, and restricted cash increased from RMB43.983 billion ($7.094 billion) as of December 31, 2023 to RMB51.553 billion ($7.094 billion) as of June 30, 2024[14] - Total current assets grew from RMB88.732 billion ($16.725 billion) to RMB121.539 billion ($16.725 billion) over the same period[14] - Short-term investments increased from RMB11.410 billion ($1.776 billion) to RMB12.907 billion ($1.776 billion) as of June 30, 2024[14] - Prepaid expenses and other current assets rose from RMB15.591 billion ($2.596 billion) to RMB18.863 billion ($2.596 billion)[14] - Total assets expanded from RMB219.137 billion ($34.102 billion) to RMB247.823 billion ($34.102 billion) over the six-month period[14] - Total liabilities increased from RMB 96,131 million in 2023 to RMB 116,431 million in 2024, with current liabilities rising from RMB 72,411 million to RMB 92,116 million[15] - Total equity attributable to Trip.com Group Limited increased from RMB 122,184 million in 2023 to RMB 130,500 million in 2024[15] Debt and Financing - The company issued $1.5 billion in convertible senior notes due in 2029, including an additional $200 million due to the full exercise of the initial purchasers' option[7] - The convertible notes bear an annual interest rate of 0.75% and will be settled in cash upon conversion[7] - Concurrent with the notes offering, the company repurchased approximately 6 million ADSs for a total consideration of $300 million[8] - Interest expenses for the six months ending June 30, 2024, were RMB 1,013 million (USD 139 million)[18] Accounting and Reporting - The company provides non-GAAP financial measures to supplement GAAP financial statements, including adjusted EBITDA and adjusted EBITDA margin[11] - Revenue from product development under IFRS for the six months ending June 30, 2024, was RMB 6,155 million[22] - Sales and marketing expenses under IFRS for the six months ending June 30, 2024, were RMB 5,156 million[22] - Product R&D expenses under US GAAP were RMB 5,627 million, adjusted to RMB 5,595 million under IFRS[23] - Sales and marketing expenses under US GAAP were RMB 4,110 million, adjusted to RMB 4,104 million under IFRS[23] - Operating profit under US GAAP was RMB 5,218 million, adjusted to RMB 5,307 million under IFRS[23] - Net profit under US GAAP was RMB 4,022 million, adjusted to RMB 4,043 million under IFRS[23] - Total assets under US GAAP were RMB 247,823 million, adjusted to RMB 247,492 million under IFRS[24] - Total liabilities under US GAAP were RMB 116,431 million, adjusted to RMB 115,527 million under IFRS[24] - Total equity under US GAAP was RMB 131,392 million, adjusted to RMB 131,965 million under IFRS[24] - Intangible assets and land use rights under US GAAP were RMB 12,551 million, adjusted to RMB 12,623 million under IFRS[24] - Property, plant, and equipment under US GAAP were RMB 5,083 million, adjusted to RMB 4,932 million under IFRS[24] - Investments under US GAAP were RMB 45,392 million, adjusted to RMB 42,792 million under IFRS[24] - Available-for-sale debt investments are measured at fair value under US GAAP, with unrealized gains or losses reflected in "Accumulated Other Comprehensive Income" in the consolidated balance sheet[27] - Under IFRS, certain debt investments are classified as financial assets measured at fair value through profit or loss due to failing the SPPI test[27] - Under US GAAP, preferred stock investments require fair value adjustments through income or other comprehensive income, which is not applicable under IFRS[28] - Convertible bonds are measured at amortized cost under US GAAP, with any difference between initial carrying amount and repayment amount recognized as interest expense using the effective interest method[28] - Under IFRS, convertible bonds are designated as measured at fair value with changes recognized in profit or loss, except for credit risk changes which are recognized in other comprehensive income[28] - Software is recorded under property, plant, and equipment under US GAAP[28] - Under IFRS, software is reported under intangible assets, requiring reclassification from property, plant, and equipment[28] Corporate Events - The company will hold an earnings conference call on August 26, 2024, at 8:00 PM Eastern Time (August 27, 8:00 AM Hong Kong Time)[9] Shareholder Information - Weighted average diluted shares outstanding (non-GAAP) for Q2 2024 were 687,977,626[19]