TRIP.COM(09961) 交银国际证券·2024-05-21 11:32Investment Rating - The investment rating for the company is "Buy" with a target price of HKD 509.00, indicating a potential upside of 16.6% from the current price of HKD 436.40 [2][8]. Core Insights - The report highlights that while hotel prices in mainland China have decreased, the booking volume has exceeded expectations, leading to an anticipated stable profit margin for the year [1]. - For Q1 2024, the company reported revenues of RMB 11.9 billion, a year-on-year increase of 29%, slightly above market expectations. Adjusted net profit rose by 96% to RMB 4.1 billion, with a net profit margin of 34% [1][4]. - The report anticipates that the company's outbound revenue will nearly fully recover to 2019 levels, with international business expected to grow by over 30% [1]. Summary by Sections Financial Performance - Q1 2024 revenue breakdown: Hotel accommodation revenue increased by 29%, transportation by 20%, vacation packages by 129%, and business travel by 15% [1]. - Adjusted net profit for Q1 2024 was RMB 4.1 billion, exceeding expectations by 32% and 45% compared to market forecasts [1][4]. - The company maintained a stable marketing expense ratio at 19%, better than the expected 22-23% [1]. Market Outlook - The report projects a 10% decline in hotel prices in Q2 2024, with a potential marginal improvement in Q4 2024. Despite price declines, the company is expected to maintain double-digit growth in booking volumes due to strong brand recognition and supply chain advantages [1]. - The company is expected to achieve a 30.1% adjusted net profit margin in 2024, with adjusted net profit and earnings per share forecasts raised by 12% and 27% respectively [1][4]. Valuation - The target price has been adjusted from HKD 440 to HKD 509 based on a 20x P/E ratio for 2024, reflecting confidence in sustained travel demand and the company's competitive advantages in both domestic and international markets [2][4].