TRIP.COM(TCOM)2023-11-21 02:54Financial Data and Key Metrics Changes - Trip.com Group reported a net revenue of RMB 13.7 billion for Q3 2023, representing a 99% increase year-over-year and a 22% increase quarter-over-quarter, primarily due to strong recovery in the travel market [19] - Adjusted EBITDA was RMB 4.6 billion for Q3 2023, compared to RMB 1.4 billion in the same period last year and RMB 3.7 billion in the previous quarter [22] - Diluted earnings per ordinary share were RMB 6.84 or US1 [23] Business Line Data and Key Metrics Changes - Accommodation reservation revenue for Q3 was RMB 5.6 billion, a 92% increase year-over-year and a 30% increase quarter-over-quarter, which is 36% higher than the 2019 level [19] - Transportation ticketing revenue for Q3 was RMB 5.4 billion, representing a 105% increase year-over-year and 11% increase quarter-over-quarter, which is 44% higher than the 2019 level [20] - Packaged tour revenue for Q3 was RMB 1.3 billion, a 243% increase year-over-year and an 84% increase quarter-over-quarter, recovering to 81% of the 2019 level [20] Market Data and Key Metrics Changes - In the Chinese domestic market, hotel reservations grew over 90% year-over-year and 70% versus 2019 levels [8] - The overall Chinese outbound market recovered to about 50% of the pre-pandemic level, while Trip.com Group's outbound hotel and air ticket reservations recovered to 80% of the pre-pandemic level [9] - Air ticket bookings on the global OTA platform nearly doubled year-over-year and were 80% above 2019 levels [10] Company Strategy and Development Direction - The company is focusing on globalization and AI innovation as key components of its long-term strategy, aiming to enhance customer experiences through personalized services [6] - Trip.com Group is committed to expanding its global OTA platform and enhancing its capabilities to meet the growing demand for outbound travel [5] - The company is also prioritizing sustainability initiatives as part of its long-term growth strategy, including low-carbon travel options and community-friendly programs [15][16] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the robust travel demand across all business segments and anticipates that outbound travel will continue to be a primary growth catalyst [18] - The company expects to maintain high-speed growth in its global OTA platform and anticipates further recovery in outbound travel due to improvements in flight capacity and visa processes [31] - Management highlighted the importance of AI in enhancing operational efficiency and customer service, with ongoing investments in AI technology [66] Other Important Information - The company has repurchased US10.8 billion, indicating strong cash flow [23] Q&A Session Summary Question: Can you elaborate on the adoption of AI technology between Trip.com and Ctrip? - Management stated that a consistent AI adoption strategy is implemented across all markets, focusing on improving productivity and efficiency [27] Question: What is the travel performance after the Golden Week and the momentum into Q4 and 2024? - Management noted that domestic hotel bookings surpassed 2019 levels by around 60%, and outbound reservations recovered to around 80% of 2019 levels, with confidence in outpacing market growth [30][31] Question: What is the recovery pace of outbound flight and when will it fully recover? - Management indicated that while demand exceeds 2019 levels, visa application delays and flight capacity recovery are hurdles, but improvements are expected [33] Question: Is there a trend of trade-down in corporate or leisure travel? - Management reported no signs of consumption downward in leisure travel, with corporate travelers spending more than in 2019 [36] Question: How did the company achieve the current margin structure? - Management explained that strong brand awareness and market share contribute to healthy margins, with expectations for outbound travel to increase its revenue contribution [41] Question: What is the current profitability of Trip.com and its growth outlook? - Management stated that Trip.com has achieved breakeven on a contribution margin basis and expects continued improvement in profitability across markets [62]