2026-01-20 03:19Trip.com Group (TCOM) Conference Call Summary Company Overview - Company: Trip.com Group (TCOM) - Market Cap: $39.3 billion - Enterprise Value: $32.9 billion - Current Share Price: $61.77 - 12-Month Price Target: $87.00 (Upside: 40.8%) [1] Key Industry Insights - Investigation Impact: TCOM's share price dropped approximately 20% following the announcement of an investigation by the State Administration for Market Regulations (SAMR) of the PRC under the Anti-Monopoly Law. Historical cases (e.g., Alibaba, Meituan) were referenced to assess potential impacts on stock performance [1][2]. - Competitive Landscape: The investigation may lead TCOM to adopt a more restrained competitive stance, particularly in the hospitality segment, which is more fragmented compared to the airline and railway sectors dominated by state-owned companies [2][28]. - Booking Volume vs. Take Rate: The anticipated impact of increased competition is expected to affect booking volumes more than take rates. TCOM and Tongcheng have maintained stable hotel take rates despite competitive pressures [2][32]. Financial Performance and Projections - Revenue Forecasts: - FY2025E: Rmb 62,056.3 million - FY2026E: Rmb 69,843.2 million - FY2027E: Rmb 77,269.2 million [6][19] - Earnings Adjustments: Core earnings estimates for FY26-27 were revised down by 5% to 8%, with a slower hotel GMV CAGR projected at 6% (previously 13%) [19]. - EBIT Margin: Expected to narrow to 28.9% in FY26E from 30.4% in FY24E [19]. Key Financial Metrics - EBITDA: - FY2025E: Rmb 18,927.3 million - FY2026E: Rmb 21,113.1 million - FY2027E: Rmb 23,062.7 million [6][19] - EPS: - FY2025E: Rmb 46.30 - FY2026E: Rmb 30.04 - FY2027E: Rmb 32.16 [6][19] Risks and Considerations - AI Adoption: TCOM faces potential risks from AI adoption compared to peers, as competitors like Alibaba have integrated AI solutions to enhance customer experiences [21]. - Market Structure: The hospitality segment's fragmented nature may lead to increased competition and potential loss of exclusivity agreements, impacting TCOM's hotel business [28][29]. - Take Rate Sensitivity: A 10% reduction in hotel GMV could lower FY26E earnings by 5%, while a 1% change in hotel take rate could impact earnings by 8% [19]. Revenue Breakdown - Domestic Revenue: Approximately Rmb 40 billion or 63% of total revenue in FY2025E, with significant contributions from domestic hotels (29%) and transportation (15%) [26]. - EBIT Contribution: Majority of EBIT derived from domestic and outbound travel businesses, with 41% from domestic hotels [26]. Conclusion - Despite the recent volatility due to regulatory scrutiny, TCOM is positioned to benefit from the long-term growth of Chinese travel demand. The current share price correction may present a buying opportunity for long-term investors [20].