Core Viewpoint - Trip.com Group reported strong financial performance in Q2 2025, exceeding expectations, driven by lower sales and marketing expenses, leading to an increase in target price and maintained Buy rating [1][3]. Financial Performance - Q2 2025 revenue reached Rmb14.9 billion, representing a 16% year-over-year increase, with a non-GAAP operating profit of Rmb4.7 billion and a non-GAAP operating profit margin of 31% [1]. - By business segment, accommodation reservation revenue increased by 21% YoY, transportation ticketing revenue rose by 11%, packaged-tour revenue grew by 5%, corporate travel revenue increased by 9%, and other business revenue surged by 31% [2]. - Overall reservations on the Trip.com brand increased by over 60% YoY, with inbound travel bookings more than doubling (over 100% YoY), and outbound hotel and air ticket bookings up by 20% compared to 2019 levels [2]. Share Repurchase Program - The company has fully utilized the US$400 million share repurchase authorization limit for 2025 and has approved a new multi-year repurchase program not exceeding US$5 billion to enhance shareholder returns [3]. Future Outlook - The non-GAAP EPS forecast for 2025 has been raised from Rmb27.7 to Rmb27.8, with forecasts for 2026 and 2027 maintained at Rmb29.7 and Rmb30 respectively [1]. - The target price has been increased from HK$590 to HK$618, indicating a 21% upside potential [1]. - The company is expected to maintain a leading position in China's online travel industry and has potential for market share growth internationally [3].

Investment Rating - The report maintains a "Buy" rating for the company [3] Core Insights - The company slightly exceeded profit expectations in Q1 2025, with revenue reaching 138.30 billion, a year-on-year increase of 16.2%, and operating profit (Non-GAAP) at 40.43 billion, up 7.4% year-on-year [6] - The company is expected to achieve revenue of 624.84 billion, 705.27 billion, and 793.32 billion for 2025, 2026, and 2027 respectively, with year-on-year growth rates of 17.24%, 12.87%, and 12.48% [2] - The company is expanding its overseas investments, which has led to a slight decline in profit margins, with a gross margin of 80.4% in Q1 2025, down 0.8 percentage points year-on-year [6] - The international OTA platform bookings grew over 60% year-on-year, and inbound tourism increased by over 100% [6] - The company is accelerating its AI strategy, which is expected to enhance customer service efficiency significantly [6] Financial Summary - The projected net profit for the company is 169.59 billion, 199.39 billion, and 226.82 billion for 2025, 2026, and 2027 respectively, with a year-on-year change of -0.63%, +17.57%, and +13.75% [2] - The earnings per share (EPS) are forecasted to be 23.77, 27.94, and 31.79 for 2025, 2026, and 2027 respectively [2] - The company’s total assets are expected to reach 275.05 billion, 297.69 billion, and 329.00 billion for 2025, 2026, and 2027 respectively [7]

Investment Rating - The report maintains a "Buy" rating for the company [3] Core Views - The company's Q1 2025 profit slightly exceeded expectations, with revenue reaching 138.30 billion, a year-on-year increase of 16.2%, and operating profit (Non-GAAP) at 40.43 billion, up 7.4% year-on-year [6] - The company is expected to achieve revenue of 624.84 billion, 705.27 billion, and 793.32 billion for 2025, 2026, and 2027 respectively, with year-on-year growth rates of 17.24%, 12.87%, and 12.48% [2] - The company is expanding its overseas investments, contributing to revenue growth, with international OTA platform bookings increasing over 60% year-on-year [6] - The company is accelerating its AI strategy, which is expected to enhance customer service efficiency significantly [6] Financial Summary - The forecasted revenue and net profit for the company from 2025 to 2027 are as follows: - Revenue: 624.84 billion (2025), 705.27 billion (2026), 793.32 billion (2027) - Net Profit: 169.59 billion (2025), 199.39 billion (2026), 226.82 billion (2027) [2][7] - The company's earnings per share (EPS) is projected to be 23.77 yuan in 2025, 27.94 yuan in 2026, and 31.79 yuan in 2027 [2][7] - The price-to-earnings (P/E) ratio is expected to be 19X in 2025, 16X in 2026, and 14X in 2027 [2]

Core Viewpoint - Trip.com Group reported strong financial performance in Q1 2025, with revenue growth and positive operating profit margins, indicating a robust recovery in the travel sector [1][4]. Financial Performance - Q1 2025 revenue reached Rmb13.9 billion, representing a 16% year-over-year increase [1]. - Non-GAAP operating profit was Rmb4 billion, with a non-GAAP operating profit margin of 29% [1]. - The company maintains its non-GAAP EPS forecasts of Rmb27.7 for 2025, Rmb29.7 for 2026, and Rmb30 for 2027 [1]. Business Segment Performance - Accommodation reservation revenue increased by 23% year-over-year [2]. - Transportation ticketing revenue grew by 8%, packaged tour revenue by 7%, corporate travel revenue by 12%, and other business revenue by 33% [2]. - Revenue breakdown by region: domestic (65% of total revenue, low teens growth), outbound (15%, 20% growth), and pure overseas (20%, 30%+ growth) [2]. Brand Contribution and Outlook - The Trip.com brand contributed 13% of total revenue, with over 50% year-over-year growth [3]. - For Q2 2025, revenue is expected to grow by 14% year-over-year, with domestic business in low teens, outbound travel up by 15%, and Trip.com brand growth exceeding 50% [3]. - The recovery rate of outbound travel compared to 2019 is projected to rise from 50% in Q1 2025 to 60% [3]. Market Position and Rating - The company is positioned as a leader in China's online travel industry, with potential for market share gains internationally [4]. - The target price is maintained at HK$590, indicating a 22% upside, with a Buy rating sustained [4].