TRIP.COM(09961) 国信证券·2024-05-31 10:31Investment Rating - The report maintains an "Outperform" rating for Trip.com Group (9961 HK) [1] Core Views - Trip com Group is entering a new growth cycle by integrating domestic and international travel services aiming to become the leading online travel platform in Asia and the leading online transportation ticketing platform globally [2][4] - The company has demonstrated strong profitability post the 2023Q4 and 2024Q1 compensatory demand period with a GMV of 150 6 billion [4] - The online travel industry has seen significant improvements in its operating ecosystem with increased online penetration and a shift towards more personalized and diversified travel demands [4] Summary by Sections Trip com Group Overview - Trip com Group has been a leader in the online travel industry for 25 years with a GMV of $160 billion in 2023 making it the largest globally [4] - The company has shown strong recovery in domestic travel with a 28% increase in accommodation bookings and a 41% increase in transportation bookings compared to 2019 [10] - The company's non GAAP net profit in 2023 was 3 0 times that of Booking compared to 4 7 times in 2019 indicating improved operational efficiency [4] Industry Trends - The online travel industry has seen a significant shift towards online penetration with OTA platforms playing a crucial role in meeting the demand for personalized and diversified travel experiences [4] - The industry is moving towards a more stable competitive landscape with players focusing on profitability and efficiency [13] Competitive Landscape - The competitive landscape in the online travel industry has stabilized with players focusing on profitability and efficiency [13] - The key competitive factors include supply chain integration fulfillment efficiency and the ability to adapt to changing consumer demands [51] Growth Prospects - Trip com Group is well positioned to benefit from the recovery of outbound travel with an estimated 54% market share in online outbound travel [5] - The company's Trip com platform is expected to grow at a mid double digit rate over the next 3 5 years with significant potential in the Asian market [5] - The company's international expansion is supported by its strong supply chain and customer service system which has been built over a decade [73] Investment Recommendation - The report maintains a positive outlook on Trip com Group with a target valuation of 20 22x for 2024 corresponding to a market cap of RMB 3092 3401 billion representing a 22% 35% upside from the current level [5] - The company's strong supply chain and fulfillment system along with its ability to optimize marketing efficiency and labor productivity are key factors supporting its growth [5]