Trip.com Group Ltd (TCOM) Conference Call Summary Company Overview - **Company**: Trip.com Group Ltd (TCOM.O) - **Industry**: Online Travel Agency (OTA) - **Market Cap**: US$36,956 million - **Current Stock Price**: US$53.66 - **Price Target**: US$75.00, revised from US$87.00 Key Points Financial Performance - **Revenue Growth**: TCOM reported strong revenue growth with a 4Q25 revenue beat and guidance for 1Q26 revenue growth of 12-17% [2][5] - **Booking Trends**: CNY domestic hotel bookings are growing at double-digit rates, with outbound travel also posting double-digit growth. QTD bookings are up 60% [2][3] - **Segment Performance**: - Hotel and packaged tours are growing in the high teens YoY - Corporate travel is expanding with a focus on customer base expansion - Transportation growth is in the 8-13% range [2] Operational Insights - **International Business**: International business accounted for ~40% of total revenue in 2025, up from 35% in 2024, indicating a strong trajectory towards a mid-term target of 50% [3] - **AI Development**: Management views AI as a catalyst for OTA businesses, emphasizing that TCOM's proprietary data and service capabilities mitigate potential threats from AI booking routing [4] Regulatory Environment - **Regulatory Uncertainty**: No updates on the regulatory front, but management expects business operations to remain intact despite ongoing investigations [5] - **WACC Increase**: The weighted average cost of capital (WACC) assumption was increased from 10.5% to 11.2% due to higher equity risk premiums related to regulatory concerns [5][11] Earnings Estimates - **EPS Adjustments**: 2026/27 EPS estimates were cut by 3-4% due to higher operating expenses, while revenue forecasts were raised by 1% [5][10] - **Operating Profit Margin**: Guidance for operating profit margin (OPM) is set at 28% for 1Q26, slightly lower due to a mix shift towards trip.com [2] Market Positioning - **Growth Engines**: TCOM is positioned to benefit from multiple growth engines, including domestic travel, outbound travel, and international expansion [22] - **Share Repurchase Program**: A US$5 billion share repurchase program was announced, representing over 10% of the market cap at the time of announcement [22] Risks and Considerations - **Market Competition**: Rising competition from other domestic players like Tongcheng Travel and Meituan poses a risk to market share [34] - **Macroeconomic Factors**: Potential macroeconomic slowdown and FX headwinds could impact travel demand [34] Valuation Metrics - **P/E Ratios**: The new price target implies a P/E of 18x for 2026 and 16x for 2027 [5][28] - **DCF Valuation**: Key assumptions include a WACC of 11.2% and terminal growth of 3% [16] Conclusion - TCOM is navigating a complex regulatory environment while capitalizing on strong travel demand and international expansion. The company remains focused on leveraging AI technology and enhancing operational efficiencies to maintain its competitive edge in the OTA market.

Summary of Tongcheng Travel Holdings (0780.HK) Conference Call Company Overview - **Company**: Tongcheng Travel Holdings - **Industry**: Online Travel Agency (OTA) - **Founded**: 2018 - **Market Position**: Third-largest OTA in China, focusing on accommodation reservation and transportation ticketing services [27][28] Key Financial Projections - **4Q25 Revenue**: Expected to grow by 13% year-over-year to RMB 4.78 billion, aligning with VisibleAlpha consensus [2] - **4Q25 Adjusted Earnings**: Estimated at RMB 760 million, consistent with consensus of RMB 752 million [2] - **2025E Revenue Growth**: Projected hotel revenue growth at 15.8% year-over-year, driven by ADR recovery and room nights growth [1] - **2026E Revenue Growth**: Anticipated low teens growth in hotel revenues, supported by expansion into lower-tier cities and outbound travel [1][3] Financial Metrics - **Gross Profit Margin**: Estimated at 65% for 4Q25, down from 66% in 3Q25 due to increased marketing expenses [2] - **Non-GAAP Operating Profit Margin**: Expected to decrease to 18% from 23% in 3Q25 [2] - **Earnings Estimates**: - 2023A: Net Profit of RMB 2,188 million, EPS of RMB 0.953 - 2024A: Net Profit of RMB 2,771 million, EPS of RMB 1.210 - 2025E: Net Profit of RMB 3,368 million, EPS of RMB 1.463 - 2026E: Net Profit of RMB 3,898 million, EPS of RMB 1.676 [5][10] Market and Regulatory Environment - **Regulatory Risks**: Ongoing anti-trust investigation on TCOM has raised concerns, but it is believed to have minimal impact on Tongcheng's operations due to its relative independence [4][23] - **Acquisition Strategy**: After several acquisitions in 2025, Tongcheng may slow its acquisition pace in 2026, focusing on smaller assets with clear synergies [4] Investment Outlook - **Target Price**: Remains at HK$28, with an expected share price return of 18.6% [6][10] - **Short-Term View**: Positive outlook due to undemanding valuation and upcoming Chinese New Year [1][23] - **Investment Rating**: Maintained as "Buy" based on structural strength, market share gains, and potential growth from outbound travel [28] Risks - **Competitive Landscape**: Risks include increased competition from OTA peers and reliance on hotel supply from Trip.com and Tencent's platforms [30] Additional Insights - **Traffic Expansion**: Aggressive traffic expansion strategy leveraging Tencent's platforms, with a significant portion of users from lower-tier cities [27] - **Revenue Composition**: In 2018, accommodation reservation, transportation ticketing, and others accounted for 35%, 62%, and 4% of total revenue, respectively [27] This summary encapsulates the key points from the conference call regarding Tongcheng Travel Holdings, highlighting financial projections, market conditions, and investment outlook.

Summary of the Conference Call on the China OTA Industry Industry Overview - **Industry**: China Online Travel Agency (OTA) Sector - **Key Focus**: Competitive dynamics and strategic updates within the OTA industry in China Core Insights 1. **High Entry Barriers**: The complexity of building OTA supply chains and service infrastructure creates significant entry barriers, which may take 3-5 years for new entrants to overcome. Established players have clear scale advantages [2][3] 2. **Transportation Supply Chain**: The transportation supply chain is simpler with around 100 airline carriers in China, but the ROI and margins are low due to limited direct monetization through commissions. Revenue opportunities lie in cross-selling value-added services [2] 3. **Hotel Supply Chain Challenges**: Establishing a hotel supply chain is more complex due to nearly 1 million suppliers, including alternative accommodations. Many small and independent hotels require extensive business development efforts [2] 4. **Customer Service Advantages**: Leading OTAs like Trip.com have developed large in-house customer service teams, providing superior service quality through a one-stop shop platform that can address cross-business issues [2] Competitive Landscape 1. **Stable Competition**: Despite new platforms showing interest in the OTA space, the competitive landscape remains stable. New entrants face constraints in supply capabilities, customer service, and user mindshare [3] 2. **Fliggy's Position**: Fliggy has gained traffic support post-Alibaba's restructuring but still lags in hotel inventory depth and price competitiveness compared to market leaders [3] 3. **Douyin's Strategy**: Douyin has shifted from a full OTA model back to a "content + voucher" approach due to slow hotel coverage and customer profile mismatches [3] 4. **JD.com's Early Stage**: JD.com is in the early stages of developing its hotel supply chain, focusing on service provider coordination and system integration [3] AI Disruption Concerns 1. **Limited Immediate Impact**: Concerns regarding AI disruption in the OTA sector are considered overblown at this stage. Current AI platforms are likely to serve as price comparators but face limitations in real-time price retrieval due to OTAs' defensive measures [4] 2. **Long-Term AI Integration**: For AI platforms to facilitate closed-loop bookings, they must improve their supply chains and services, necessitating ongoing monitoring [4] Stock Implications 1. **Earnings Visibility**: The stable competition in the OTA sector supports the earnings visibility of leading companies. The report is optimistic about the OTA sector's prospects in 2026, citing reasonable valuations [5] 2. **Valuation Metrics**: TCOM/Tongcheng is trading at 16x/11x 2026E PE, compared to 14x for the broader Chinese internet sector [5] Risks to Consider 1. **Evolving Competition**: The competitive landscape is subject to change, which could intensify competition [7] 2. **Technological Trends**: Rapid changes in technology and user preferences pose risks [7] 3. **Monetization Uncertainty**: Uncertain monetization strategies could impact profitability [7] 4. **Traffic Acquisition Costs**: Rising costs associated with traffic acquisition and brand promotions are a concern [7] 5. **Regulatory Changes**: Potential regulatory changes could affect the industry landscape [7] Additional Notes - The report emphasizes the importance of monitoring ongoing developments in the OTA sector and the potential for new entrants to disrupt the market in the future [4][5]

Summary of Tongcheng Travel Holdings 3Q25 Earnings Call Company Overview - **Company**: Tongcheng Travel Holdings - **Industry**: Online Travel Agency (OTA) in Asia Pacific - **Date of Earnings Call**: November 25, 2025 Key Financial Results - **3Q25 Revenue**: Revenue exceeded estimates by 1%, driven by a 15% growth in the core OTA business, outperforming peers in the domestic market [2][4] - **Gross Profit Margin (GPM)**: Achieved 65.7%, 1 percentage point better than estimates due to a favorable mix shift towards core OTA [2][4] - **Net Profit**: Beat estimates by 3%, with a year-over-year margin improvement of 1 percentage point [2][4] M&A Activity - **Wanda Hotel Management Acquisition**: Closed in mid-October, expected to contribute approximately RMB 160-180 million in revenue and RMB 20 million in profit for 4Q25. This acquisition includes 239 hotels, primarily high-end in tier two or lower cities, and is seen as a future growth engine [3][4] 4Q25 Outlook - **Revenue Growth Projection**: Anticipated growth of 10-15% overall, with core OTA growth at 15-20%. Accommodations expected to be the main contributor with 12-17% revenue growth [4] - **Transportation Revenue Growth**: Projected at 6-11%, driven by improved take rates and value-added service (VAS) adoption [4] - **Other Revenue Growth**: Expected to accelerate to 45-50% due to M&A contributions [4] - **Profit Guidance**: Adjusted profit range for 4Q25 is RMB 720-780 million, with no change to full-year guidance [4] Long-term Projections - **2026 Revenue Growth**: Management expects low to mid-teens organic core OTA revenue growth (13-18% including M&A) and a further 0.5 percentage point margin improvement [4] - **Marketing Investments**: Plans to increase marketing spending for emerging outbound business and its own app [4] Valuation Metrics - **Current P/E Ratios**: Trading at 13.6x for 2025 and 11.6x for 2026, considered attractive given the double-digit core OTA revenue growth and margin expansion [5] - **Price Target**: Set at HK$29.00, indicating a 34% upside from the current price of HK$21.62 [7] Risks and Considerations - **Upside Risks**: Strong pent-up demand and moderating competition in lower-tier cities could enhance margins [12] - **Downside Risks**: Softer macroeconomic growth in China and intensifying competition in lower-tier cities could impact performance [12] Additional Insights - **Market Capitalization**: Approximately RMB 45.203 billion [7] - **Average Daily Trading Value**: HK$253 million [7] - **52-Week Price Range**: HK$24.90 - HK$17.02 [7] This summary encapsulates the key points from the earnings call, highlighting the company's performance, strategic initiatives, and market outlook.

Financial Data and Key Metrics Changes - In Q3 2025, the company reported a net revenue of RMB 5.5 billion, reflecting a year-over-year increase of 10.4% [18] - Adjusted net profit reached RMB 1,060 million, marking a 16.5% year-over-year growth, with an adjusted net margin expanding to 19.2% from 18.2% [19][22] - Gross profit increased by 14.4% year-over-year to RMB 3.6 billion, with a gross margin of 65.7% [22] - Annual paying users reached a historic high of 253 million, representing a year-over-year growth of 8.8% [11] Business Line Data and Key Metrics Changes - The accommodation reservation business achieved RMB 1.6 billion in revenue for Q3 2025, a 14.7% increase from the same period in 2024, driven by increased hotel room nights sold [19] - Transportation ticketing revenue reached RMB 2.2 billion, marking a 9.0% year-over-year increase [20] - Other business segments, including hotel management, saw revenue grow to RMB 821 million, a 34.9% year-over-year increase [21] Market Data and Key Metrics Changes - The international air ticketing business accounted for around 6% of total transportation ticketing revenue, up about two percentage points year-over-year [21] - The company noted a significant increase in the proportion of higher-quality accommodation bookings, with over 20% growth in room nights sold [38] Company Strategy and Development Direction - The company aims to enhance user value and operational efficiency in its domestic business while expanding its outbound business and strengthening its global market presence [24][25] - Following the acquisition of Wanda Hotel Management, the company plans to integrate its operations to accelerate growth in the hotel management segment [6][32] - The focus remains on technological innovation to drive product and service upgrades, ensuring high-quality travel experiences for users [5] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience and growth potential of China's travel industry, driven by changing consumer behaviors and preferences [3][5] - The company anticipates continued growth in the outbound travel segment, targeting a revenue contribution of 10%-15% in the coming years [30] - Management remains committed to balancing market expansion with profitability, aiming for robust growth in both top line and bottom line [24][25] Other Important Information - The company has achieved an MSCI ESG rating of AAA, placing it among the top 5% of companies globally in its industry [15] - The standalone app has seen strong growth, with daily active users hitting nearly 5 million before the National Day holidays [12] Q&A Session Summary Question: Future growth engines regarding international business and hotel management - Management highlighted that the outbound business is a key growth driver, with expectations for rapid growth and profitability in the coming years [29][30] - The hotel management business is expected to expand significantly, with a focus on integrating the Wanda brand and enhancing operational efficiency [32][33] Question: Future hotel ADR trends and competition in the domestic market - Management noted that domestic ADR has stabilized and is expected to improve, driven by a shift towards higher-quality accommodations [38] - The company believes its established supply chain and user understanding provide a strong competitive advantage against new entrants [42][43] Question: Margin trends and AI technology impact - Management indicated that margin expansion remains a priority, supported by improved operational efficiency and AI integration [55][58] - AI technology is seen as beneficial for enhancing operational efficiency and user experience, with ongoing investments planned [59][60] Question: Impact of recent events in Japan on business performance - Management does not expect a material impact on overall performance but will monitor developments closely and adjust strategies as needed [64]

Financial Data and Key Metrics Changes - In Q3 2025, the company reported a net revenue of CNY 5.5 billion, reflecting a year-over-year increase of 10.4% from Q3 2024 [17] - Adjusted net profit reached RMB 1,060 million, representing a 16.5% year-over-year growth, with an adjusted net margin expanding to 19.2% compared to 18.2% in the same period last year [18] - Gross profit increased by 14.4% year-over-year to RMB 3.6 billion, with a gross margin of 65.7% [22] Business Line Data and Key Metrics Changes - The core OTA business revenue grew by 14.9% year-over-year to RMB 4.6 billion, driven by accommodation reservations, transportation ticketing, and other segments [18] - Accommodation reservation revenue reached RMB 1.6 billion, a 14.7% increase from Q3 2024, attributed to higher hotel room nights sold and a slight increase in ADR [18] - Transportation ticketing revenue was RMB 2.2 billion, marking a 9.0% year-over-year increase [20] - Other business segments saw revenue of RMB 821 million, a growth of 34.9% year-over-year, primarily due to the hotel management business [21] Market Data and Key Metrics Changes - The annual paying users reached a historic high of 253 million, representing a year-over-year growth of 8.8% [11] - The cumulative number of passengers served on the platform exceeded 2 billion, indicating a stable annual purchase frequency of 8 times per user [11] - The international air ticketing business accounted for around 6% of total transportation ticketing revenue, up about 2 percentage points year-over-year [30] Company Strategy and Development Direction - The company aims to maintain its focus on the mass market while expanding its outbound business and exploring new growth drivers across the travel industry [5] - The acquisition of Wanda Hotel Management is expected to accelerate the growth of the hotel management business and strengthen the company's competitive positioning [11] - The company is committed to integrating AI technologies to enhance operational efficiency and user experience [5][15] Management Comments on Operating Environment and Future Outlook - Management noted that the travel market in China is showing robust growth, driven by rising demand for immersive experiences and innovative service models [3] - The company plans to capitalize on market opportunities while managing risks with discipline and prudence, aiming for robust growth in both top line and bottom line [24] - Management expressed confidence in achieving long-term sustainable growth and delivering value to stakeholders through a clear strategic roadmap [5][34] Other Important Information - The company has achieved an MSCI ESG rating of AAA, placing it among the top 5% of companies globally in its industry [15] - The standalone app has seen strong growth, with daily active users hitting nearly 5 million before the National Day holidays [12] Q&A Session Summary Question: Future growth engines regarding international business and hotel management - Management highlighted that the outbound business is a key growth driver, with expectations for rapid growth and profitability in the coming years [30][31] - The hotel management business is expected to expand significantly, with a focus on integrating Wanda Hotel Management to enhance offerings and profitability [32][34] Question: Future hotel ADR trends and competition in the domestic market - Management noted that domestic ADR has stabilized and is expected to improve, driven by a shift towards higher-quality accommodations [39][40] - The company believes it has strong defensive moats against competition due to its established supply chain and user understanding [42][43] Question: Margin trends and AI technology impact - Management indicated that margin expansion remains a priority, supported by improved operational efficiency and AI integration [55][57] - AI technology is expected to enhance operational efficiency and user experience, contributing positively to the company's performance [58][60] Question: Impact of recent incidents in Japan on business performance - Management does not expect a material impact on full-year performance but will monitor developments closely and adjust strategies as needed [63]

Financial Data and Key Metrics Changes - The adjusted operating profit for Q2 was $44.2 million, reflecting an 18% year-on-year growth [5][32] - The company reported a loss of $5.7 million for the quarter compared to a profit of $17.9 million in the same quarter last year, primarily due to interest and foreign exchange costs [31][32] - The adjusted margin growth for models and packages accelerated from 16.3% in Q1 to 21.6% in Q2 [29] Business Line Data and Key Metrics Changes - The international air ticketing revenue grew by over 29.6% year-on-year in constant currency terms, significantly outpacing industry growth [6] - The accommodation business, including hotels and holiday packages, delivered an 18% volume growth year-on-year [15] - The bus ticketing business saw strong growth, with all regions growing over 20% year-on-year [22] Market Data and Key Metrics Changes - The international business now contributes 28% to overall revenue, up from 25% during the same period last year [7] - Analysts estimate that recent fiscal and monetary measures could unlock an additional consumer spending of $3 billion to $3.5 billion [7] - The domestic air market experienced a decline of 3% year-on-year due to supply constraints [28] Company Strategy and Development Direction - The company is focused on enhancing customer experience through AI, launching an AI-powered travel assistant, Myra, to improve user engagement [8][10] - The strategy includes expanding the international air segment, which is seen as a significant growth opportunity [6] - The company aims to leverage its diversified product portfolio to drive growth across various travel segments [5][37] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of travel demand, particularly in the international air segment and domestic tourism [5][6] - The company anticipates that the reduction in GST rates and increased disposable income will boost travel demand [7][37] - Despite short-term challenges in the domestic air market, the long-term outlook for the Indian aviation sector remains robust [14] Other Important Information - The company has recently appointed Deepak Bora as the new Group CFO [26] - The company completed the repurchase and cancellation of 34.4 million Class B shares as part of its capital management strategy [30] Q&A Session Summary Question: Air capacity issue and demand outlook for December - Management indicated that domestic air market daily departures are expected to return to about 3,200, similar to the same period last year, with constraints still remaining [41][43] Question: Impact of GST benefits on December bookings - Management noted that while early signs are positive, travel demand typically picks up after Diwali, and they remain optimistic about the impact of GST reductions on consumer spending [45][46] Question: Increase in marketing expenses - Management clarified that the increase in marketing expenses is aligned with improved segment margins and is not solely due to competitive intensity [49][50] Question: Buyback program status - Management confirmed that no buybacks occurred in the current quarter but outlined changes to the buyback program, extending it and increasing the budget [53][54] Question: Growth outlook despite strong base in March - Management remains optimistic about achieving growth in the twenties for the full fiscal year, despite challenges in the first half [64][66] Question: Competitive landscape and new entrants - Management welcomed increased investment interest in the travel industry and expressed confidence in maintaining market leadership despite competition [68][70] Question: Clarification on growth guidance - Management clarified that the 20% growth guidance refers to adjusted margin growth across segments, not gross bookings [80][82] Question: Observations on hotel bookings and revenue - Management highlighted that adjusted margin growth in the standalone hotel business was strong at 23.1%, despite foreign currency impacts [83]

Summary of Earnings Preview for 3Q25 Industry Overview - The report focuses on the **China Internet and Other Services** sector, particularly the **online entertainment** and **OTA (Online Travel Agency)** segments, indicating an overall solid set of results expected for 3Q25 amid trade tensions [1][2]. Key Companies and Forecasts NetEase (OW) - Forecasted **15% growth** in game revenue and **26% growth** in Non-GAAP profit [3]. - Strong performance of FWJ's free-to-play version noted, though difficult to quantify due to its PC game nature [3]. - Limited upward revision in 2025 revenue consensus post-2Q earnings suggests potential upside risk [3]. Tencent Music Entertainment Group (TME) (OW) - 3Q forecast aligns with guidance, with upside risk for other music revenue due to concert seasonality [4]. - Key focus for 3Q25 earnings will be 2026 profit guidance, with a consensus of **Rmb11.2 billion** [4]. - Absolute profit is prioritized over margin due to uncertainty in concert contributions [4]. Trip.com Group Ltd (TCOM) (OW) - Bottom-line forecast is at the higher end of guidance range, with expected minimal YoY OPM contraction (~1ppt) in 3Q [5]. - Slight OPM expansion anticipated in 4Q from a low base, critical for evaluating 2026 consensus forecast [5]. - Competition from Fliggy highlighted as a key focus [5]. Tongcheng Travel Holdings (OW) - Expected **13% core OTA revenue growth** and **14% profit growth** [6]. - Management's comments on synergy from the Wanda Hotel Management acquisition are anticipated at the full-year result rather than in 3Q [6]. Kuaishou (EW) - 3Q guidance is in line, with expectations to raise full-year profit guidance by **3-5%** [7]. - Kling's performance remains a market debate, with increasing competition noted [7]. - Traffic and monetization changes under the new OneRec AI recommendation model are deemed crucial [7]. Bilibili (EW) - Forecasting **20% growth** in ads and a **16% decline** in game revenue [8]. - Expected **8% non-GAAP net margin** (Rmb613 million profit), with upside risk due to a relatively low base [8]. Important Focus Areas for 3Q Earnings - **NetEase**: Revenue and grossing to gauge FWJ's new run rate [12]. - **TCOM**: 4Q margin guidance as a checkpoint for potential normalization of overseas marketing intensity [12]. - **TME**: Detailed 2026 outlook expected due to good visibility [12]. - **Kuaishou**: Traffic and monetization growth to evaluate the new AI recommendation system [12]. Financial Highlights - **Kuaishou**: Expected total revenue of **Rmb35.391 billion**, with a **14% YoY growth** [16]. - **TCOM**: Anticipated net revenue of **Rmb18.193 billion**, reflecting a **15% YoY growth** [20]. - **TME**: Projected total revenue of **Rmb8.230 billion**, with a **17% YoY growth** [18]. Conclusion The earnings preview indicates a generally positive outlook for the online entertainment and OTA sectors in China, with several companies expected to outperform amid competitive pressures and market dynamics. Key financial metrics and growth forecasts suggest potential investment opportunities, particularly in companies like NetEase, TME, and TCOM.

Summary of Trip.com Group Ltd Conference Call Company and Industry Overview - **Company**: Trip.com Group Ltd (TCOM.O) - **Industry**: China Internet and Other Services, specifically focusing on the travel industry in the Asia Pacific region Key Points and Arguments 1. **Upcoming Catalyst**: The travel industry data release around the National Day and Mid-Autumn Festival is expected to be a significant catalyst for share prices [1][2] 2. **Holiday Data Expectations**: Strong travel data is anticipated due to the overlap of the two holidays, which is not the case in 2024, where a 6.3% year-over-year (YoY) growth was recorded [2] 3. **Impact on Earnings**: The holiday data will be crucial for TCOM's 4Q25 earnings, with the Ministry of Cultural and Tourism expected to report tourist receipts data on October 9 [2] 4. **Potential Outcomes**: - Scenario 1: Tourist receipts up 7% YoY (40% probability) - Scenario 2: Tourist receipts up 8% YoY or above (40% probability) - Scenario 3: Tourist receipts up 6% YoY or below (20% probability) [3] 5. **Stock Price Implications**: - Scenario 1: Share price remains flat (US$77) - Scenario 2: Share price increases by 5%+ (US$81) - Scenario 3: Share price decreases by 5% (US$73) [4][5] Financial Metrics and Projections 1. **Current Stock Rating**: Overweight with a price target of US$83.00, indicating an 8% upside from the current price of US$76.79 [6] 2. **Market Capitalization**: Approximately US$52.886 billion [6] 3. **Earnings Projections**: - EPS (Rmb): 26.20 for FY 2024, increasing to 33.50 by FY 2027 - Revenue (Rmb million): Expected to grow from 53,294 in FY 2024 to 76,381 in FY 2027 [6] 4. **Valuation Ratios**: - P/E Ratio: Expected to range from 20.4 in FY 2024 to 16.6 in FY 2027 - ROE: Projected to be around 13.8% in FY 2024, stabilizing around 12.1% by FY 2027 [6] Risks and Considerations 1. **Upside Risks**: - Strong pent-up demand in the travel sector - Reduced competition in lower-tier cities leading to improved margins [12] 2. **Downside Risks**: - Softer macroeconomic growth in China affecting price-sensitive consumers - Increased competition from domestic players like Tongcheng Travel and Meituan [13] Additional Insights - The upcoming holiday data is viewed as a critical indicator for both Trip.com and its competitor Tongcheng Travel, suggesting a broader impact on the online travel agency (OTA) sector [2][4] - The analysis indicates a cautious optimism regarding the travel industry's recovery, contingent on macroeconomic conditions and competitive dynamics [12][13]

Financial Data and Key Metrics Changes - The company reported a net revenue of RMB4.7 billion, marking a 10% year-over-year increase from the same period in 2024 [26] - Adjusted net profit rose to RMB775 million, reflecting an 18% year-over-year growth, with adjusted net margin expanding to 16.6% compared to 15.5% in the same period last year [26] - Gross profit increased by 10.6% year-over-year to RMB3.0 billion, with gross margin rising slightly to 65% [29] - Adjusted EBITDA increased by 29.7% to RMB1.2 billion, with a 25.4% margin compared to a 21.5% margin in the same period last year [30] Business Line Data and Key Metrics Changes - The accommodation reservation business achieved RMB1.4 billion, representing a 15.2% increase from the same period in 2024 [27] - Transportation ticketing revenue reached RMB1.9 billion, marking a 7.9% year-over-year increase [28] - The hotel management business sustained healthy expansion, with over 2,700 hotels in operation and nearly 1,500 in the pipeline [16] Market Data and Key Metrics Changes - The international air ticketing volume reached a historical high, delivering nearly 30% year-over-year growth [14] - The cumulative number of passengers served on the platform reached 2 billion, suggesting a stable user purchase frequency of 8 times per year [20] - The twelve-month annual paying users climbed to over 250 million, representing a 10% year-over-year increase [20] Company Strategy and Development Direction - The company is focused on expanding its core OTA business while enhancing its brand awareness and market share [34] - There is a commitment to leveraging technology, including AI, to drive growth and improve user experience [21][23] - The company aims to deepen its presence in the hotel management sector, targeting over 3,000 hotels in operation by the end of 2025 [73] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the Chinese travel market, anticipating steady year-over-year growth in both top line and bottom line [33] - The shift in consumer preferences towards experiential travel is seen as a significant opportunity for growth [56] - The company plans to maintain a disciplined approach to sales and marketing spending to ensure optimal returns [56] Other Important Information - The company announced the acquisition of a 100% stake in Wanda Hotel Management, which is expected to diversify brand metrics and strengthen market presence [17] - The balance of cash, cash equivalents, restricted cash, and short-term investments was RMB13.5 billion as of June 30, 2025 [32] Q&A Session Summary Question: Can management provide more color regarding the volume growth, ADR, and take rate in the accommodation business? - Management noted that the domestic ADR has stabilized year-over-year and is expected to continue growing, driven by a shift in user behavior towards higher quality products [41][43] Question: How does the company balance strategic resource allocation between core OTA and pursuing a diverse business portfolio? - Management emphasized that the OTA business remains the foundation and strategic focus, while also pursuing organic growth opportunities and selective M&A [46][48] Question: What are the reasons for the low growth in domestic airline ticketing volume? - Management indicated that the industry has returned to a normalized growth trajectory after two exceptional years, but expects the OTA business to outpace overall market growth [52][54] Question: Can management share more details on outbound travel performance? - Management reported significant growth in international air ticketing and accommodation volumes, with a focus on improving marketing efficiency and ROI [58][59] Question: How does management view the impact of JV and BaBa's investments in the OTA market? - Management believes that the competitive landscape remains stable, as new entrants face challenges in replicating established relationships and operational efficiencies [64][66] Question: What is the expected margin outlook for the OTA business? - Management expects steady year-over-year improvement in margins, driven by reduced sales and marketing expenses and improved operational efficiency [69][70] Question: What is the latest development plan for the hotel management business? - Management aims to operate over 3,000 hotels by the end of 2025, with a focus on enhancing quality and brand recognition [73][74] Question: Can management comment on the standalone app's user base and revenue contribution? - Management reported that the app accounted for over 8% of core OTA revenue in Q2, with ongoing efforts to grow the user base and engagement [82] Question: How is AI evolving within the company? - Management highlighted the integration of AI into the travel planning process, improving operational efficiency and user experience [85][86]