Zhao Yin Guo Ji·2025-05-21 02:23Investment Rating - The report maintains a "BUY" rating for Trip.com Group (TCOM), with a target price of US$70.00, indicating a potential upside of 10.4% from the current price of US$63.38 [2][16]. Core Insights - Trip.com Group reported a total revenue of RMB13.9 billion for 1Q25, reflecting a 16% year-over-year growth, which aligns with forecasts and consensus estimates. The non-GAAP operating income was RMB4.0 billion, exceeding expectations by 7% due to optimized sales and marketing expenditures [1]. - The company is on track with its overseas expansion strategy, which is expected to enhance long-term value despite potential short-term earnings pressure from increased investments [1]. - The report anticipates resilient revenue growth in 2Q25, projecting a total revenue of RMB14.6 billion, representing a 15% year-over-year increase [7]. Financial Performance - For FY25E, total revenue is projected at RMB61.5 billion, with a year-over-year growth of 15.2%. The adjusted net profit is expected to be RMB17.8 billion, reflecting a slight decline of 1.3% compared to FY24A [8][10]. - The non-GAAP operating profit margin for 1Q25 was reported at 29.2%, which is 1.7 percentage points better than consensus estimates, driven by effective cost management [7][9]. - The company’s gross profit margin for 1Q25 was 80.3%, slightly below consensus expectations, indicating a need for continued focus on cost efficiency as revenue contributions from Trip.com increase [7][9]. Market Position and Growth - Trip.com’s domestic business showed strong booking volume growth, with hotel bookings increasing by approximately 10-15% year-over-year in 2Q25, while outbound bookings surpassed 120% of 2019 levels in 1Q25 [7]. - The international segment accounted for 13% of total revenue in 1Q25, with over 50% year-over-year growth, suggesting a robust recovery and expansion in overseas markets [7]. - The company is expected to maintain its investment strategy to support international growth, particularly in emerging markets like Japan, Malaysia, and Thailand, while also investing in new markets such as the Middle East and Europe [7].