TRIP.COM(TCOM)2023-06-08 03:06Financial Data and Key Metrics Changes - The company reported a net revenue of RMB9.2 billion for Q1 2023, representing a 124% increase year-over-year and an 83% increase quarter-over-quarter, primarily due to strong recovery in the travel market [18] - Adjusted EBITDA reached RMB2.8 billion, with an adjusted EBITDA margin of 31%, the highest in the past decade, compared to 2% in the same period last year [21][22] - Diluted earnings per ordinary share were RMB5.02 or 0.45 [22] Business Line Data and Key Metrics Changes - Accommodation reservation revenue was RMB3.5 billion, a 140% increase year-over-year and a 106% increase quarter-over-quarter, which is 15% higher than the 2019 level [18] - Transportation ticketing revenue reached RMB4.2 billion, a 150% increase year-over-year and 89% increase quarter-over-quarter, which is 24% higher than the 2019 level [19] - Packaged tour revenue was RMB386 million, representing a 211% increase year-over-year and a 135% increase quarter-over-quarter, recovering to 37% of the 2019 level [19] Market Data and Key Metrics Changes - Domestic hotel reservations in China grew by more than 100% year-over-year, with long-haul hotel bookings seeing a 176% increase and same-city staycation hotel bookings growing by 150% over the 2019 level [8][9] - Outbound hotel and air reservations recovered to over 40% of the pre-pandemic level, significantly outperforming the market average of 15% [9][10] - In the global market, air ticket bookings increased by over 200% year-over-year and were 100% higher than the 2019 level [11] Company Strategy and Development Direction - The company aims to augment its supply chain, content offering, and service quality to capture pent-up travel demands and lay a solid foundation for long-term growth [6][7] - Continued investment in technology, including generative AI, is expected to enhance customer experience and operational efficiency [16][55] - The company is focused on expanding its market presence in lower-tier cities and enhancing its product offerings to meet evolving customer demands [14][42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term outlook of the travel industry, citing strong pent-up demand and recovery in both domestic and outbound travel [5][7] - The company anticipates a slight decrease in margins in the short term due to increased marketing and promotions but expects to maintain a full-year margin in the 20% to 30% range [30] - The recovery in outbound travel is expected to continue as airlines increase capacity, with management optimistic about sustaining growth in various travel segments [39][46] Other Important Information - The company has established a strong user base in both long-haul and short-haul travel, allowing for a balanced portfolio of services [13] - The TripPLUS program connects over 240,000 hotels to high-quality loyal customers, with over 50% of reservations coming from high-end hotels [14] - The company has seen a significant increase in user-generated content and KOL engagement, enhancing its content generation capabilities [15] Q&A Session Summary Question: Plans for adopting generative AI technology - Management highlighted the use of generative AI to improve productivity in marketing and engineering, as well as enhancing customer service through automation [26][27] Question: Sustainability of EBITDA margins - Management noted that while margins may decrease slightly in the short term due to increased marketing expenses, they expect to maintain a full-year margin in the 20% to 30% range [29][30] Question: Performance of different business segments - Management reported that domestic travel has fully recovered, with outbound flight capacity steadily increasing, and expects continued growth in both domestic and outbound markets [33][34] Question: Drivers behind outbound travel recovery - Management attributed the strong recovery in outbound travel to significant investments in customer trust and partnerships during the pandemic, which have resulted in increased demand [37][39] Question: Long-term growth outlook for travel consumption in China - Management expressed confidence in the long-term growth of travel consumption, particularly among mid to high-income populations, and noted the acceleration of online penetration in the travel industry [40][42]