Investment Rating - The investment rating for the company is "Buy" [8] Core Views - The company reported a revenue of 12.8 billion RMB in Q4 2024, representing a year-over-year increase of 23.5%, exceeding expectations by 3.6% [1] - Adjusted net profit for Q4 was 3 billion RMB, up 13.6% year-over-year, also surpassing expectations by 8.3%, driven by strong growth in international business and inbound travel demand [1][2] - The company is expected to increase its investment in international business over the next two years, which may lead to a slight decline in profit margins in the short term, but this is anticipated to open new growth avenues and greater profit flexibility in the long term [3] Summary by Sections Financial Performance - In Q4, the company’s international OTA platform hotel and flight bookings grew over 70% year-over-year, with international business accounting for 14% of total revenue, up from 10% for the full year 2024 [2] - The inbound travel demand saw a 100% year-over-year increase in bookings, benefiting from favorable visa policies [2] Profitability Outlook - The company’s gross margin for Q4 2024 was 79.1%, showing a slight decline due to the increased proportion of lower-margin international business [3] - Management indicated a focus on expanding overseas operations, which may lead to short-term profit margin pressure but is expected to strengthen the company's global positioning and ensure sustainable profit release in the long run [3] Technology Deployment - The management is focusing on the comprehensive deployment of AI technology in business operations, utilizing extensive real-time travel data for personalized travel recommendations and competitive pricing [4] Earnings Forecast and Valuation - Revenue projections for 2025-2027 are estimated at 61.3 billion, 71.3 billion, and 82.4 billion RMB, respectively, with adjusted net profits of 19.7 billion, 22.5 billion, and 26 billion RMB [5][12] - The target price for the company's US stock is set at $75.50, while the target price for the Hong Kong stock is HKD 563.70, based on a PE valuation method [5][15]

Investment Rating - The report assigns a "Buy" rating for the company, Ctrip Group (9961 HK), with a target price of HKD 605.00, indicating a potential upside of 31.0% from the current price of HKD 462.00 [1][4][17]. Core Insights - The report highlights that increased overseas investments may disrupt short-term profit margins, but there remains room for revenue growth. The company is expected to see significant revenue increases driven by domestic hotel bookings and outbound travel demand [2][7][8]. - The financial outlook for Ctrip Group shows a strong revenue growth trajectory, with projected revenues increasing from RMB 44.56 billion in 2023 to RMB 80.58 billion by 2027, reflecting a compound annual growth rate (CAGR) of approximately 18.5% [3][19]. - Adjusted net profit is forecasted to grow from RMB 13.07 billion in 2023 to RMB 24.61 billion in 2027, with a notable increase in earnings per share (EPS) from RMB 19.48 to RMB 35.72 over the same period [3][19]. Financial Overview - Revenue projections for Ctrip Group are as follows: - 2023: RMB 44,562 million - 2024: RMB 53,377 million - 2025E: RMB 62,291 million - 2026E: RMB 71,022 million - 2027E: RMB 80,583 million - The company is expected to maintain a strong gross profit margin, with projections around 80.9% to 81.2% over the forecast period [3][19][20]. - The report anticipates a decline in net profit margin due to increased marketing expenses related to overseas brand promotion, with net profit margins expected to be around 25.9% in 2025 [7][19]. Market Performance - Ctrip Group's stock has shown a year-to-date decline of 14.44%, with a 52-week high of HKD 586.00 and a low of HKD 310.20 [6][8]. - The company has a market capitalization of approximately HKD 297.57 billion, with an average daily trading volume of 9.92 million shares [6][8]. Future Outlook - The report projects that Ctrip Group will continue to benefit from the recovery in travel demand, particularly in outbound travel, which is expected to exceed pre-pandemic levels [7][8]. - The company is also expected to leverage operational efficiencies and advancements in AI to mitigate short-term profit margin pressures [7][8].

Financial Performance - In Q4 2024, Trip.com Group achieved net operating revenue of RMB 12.7 billion (USD 1.7 billion), a year-on-year increase of 23%[9] - For the full year 2024, net operating revenue reached RMB 53.3 billion (USD 7.3 billion), reflecting a 20% year-on-year growth[10] - Q4 2024 net profit was RMB 2.2 billion (USD 300 million), compared to RMB 1.3 billion in the same period of 2023[16] - In 2024, the net profit attributable to Trip.com Group was RMB 17.2 billion (USD 2.4 billion), compared to RMB 10 billion in 2023, representing a 72% increase[17] - For Q4 2024, the net profit attributable to Trip.com Group shareholders was RMB 2.2 billion (USD 295 million), up from RMB 1.3 billion in Q4 2023, and down from RMB 6.8 billion in the previous quarter[17] - The adjusted net profit for 2024, excluding stock-based compensation and certain fair value changes, was RMB 18 billion (USD 2.5 billion), compared to RMB 13.1 billion in 2023[17] - The diluted earnings per share for Q4 2024 were RMB 3.09 (USD 0.42), while the non-GAAP diluted earnings per share were RMB 4.35 (USD 0.60)[18] - The diluted earnings per share for the full year 2024 were RMB 24.78 (USD 3.39), while the non-GAAP diluted earnings per share were RMB 26.20 (USD 3.59)[18] Revenue Breakdown - In Q4 2024, accommodation booking revenue was RMB 5.2 billion (USD 709 million), up 33% year-on-year[10] - Q4 2024 transportation ticketing revenue was RMB 4.8 billion (USD 655 million), a 16% year-on-year increase[10] - The company's international OTA platform saw hotel and flight bookings increase by over 70% year-on-year[8] - Trip.com Group's inbound travel bookings grew by over 100% year-on-year in Q4 2024[8] Expenses and Investments - R&D expenses for Q4 2024 were RMB 3.4 billion (USD 465 million), a 16% increase year-on-year[13] - Sales and marketing expenses in Q4 2024 were RMB 3.4 billion (USD 462 million), up 45% year-on-year[13] Future Projections and Plans - The company anticipates continued growth in the travel market driven by strong consumer demand and investment in AI[8] - The company has authorized a new capital return plan for 2025, including a share repurchase program of up to USD 400 million and a cash dividend of approximately USD 200 million for FY 2024[20] - The cash dividend will be USD 0.30 per share for common stock or ADS, payable to shareholders registered by the close of business on March 17, 2025[20] - The company plans to expand its market presence and enhance its product offerings, focusing on technology development and strategic acquisitions[33] Asset and Liability Projections - The total cash, cash equivalents, restricted cash, short-term investments, and held-to-maturity deposits and financial products amounted to RMB 90 billion (USD 12.3 billion) as of December 31, 2024[18] - Cash and cash equivalents, including restricted cash, are forecasted to increase from RMB 43,983 million in 2023 to RMB 51,093 million in 2024, a growth of 16.0%[29] - The total assets of Ctrip Group are projected to rise from RMB 219,137 million in 2023 to RMB 242,581 million in 2024, indicating a growth of 10.7%[31] - The total liabilities of Ctrip Group are projected to increase from RMB 96,131 million in 2023 to RMB 99,099 million in 2024, a rise of 3.1%[31] Operational Challenges - The company continues to face risks related to economic growth, competition, and operational challenges in the travel industry[23] - The company experienced a decrease in other income/expenses, from RMB 667 million in 2023 to a projected loss of RMB 2,220 million in 2024, indicating potential challenges in this area[36] - The company’s effective tax rate for the year ending December 31, 2023, was RMB 1,750 million, with an expected increase to RMB 2,604 million in 2024, reflecting higher profitability[36]

Investment Rating - The report assigns an "Buy" rating for Ctrip Group-S (09961.HK) [6] Core Insights - The report highlights the significant growth potential in service consumption in China, with a shift from physical goods to services as income levels rise, indicating a large room for growth compared to developed countries [2][22] - The tourism market is experiencing a strong recovery, with increasing consumer willingness to spend on travel, particularly in cross-border tourism, which is expected to further elevate tourism consumption levels [2][28] - Ctrip's competitive positioning is strengthened by its early entry into the OTA market, extensive resource accumulation, and a robust global expansion strategy [3][4] Summary by Sections 1. Service Consumption Rise and Online Travel Growth Potential - The trend from physical to service consumption is evident, with service consumption in China still having significant growth potential compared to developed nations [2][22] - Domestic tourism is rebounding strongly, with 2024 domestic travel expected to reach 5.615 billion trips, a 14.8% increase year-on-year [28] - Cross-border travel is recovering, with 2024 seeing nearly 95 million outbound trips, a 52% increase from the previous year, indicating a strong demand for international travel [33][37] 2. Ctrip: Competitive Advantages and Product Strength - Ctrip has a first-mover advantage in the OTA market, with a comprehensive resource base and strong brand recognition [3][59] - The company is leveraging its technological capabilities to enhance user experience and product offerings, focusing on high-end market segments [3][64] - Ctrip's global strategy includes significant investments in overseas markets, particularly through its brands Trip.com and Skyscanner, which are gaining traction in the Asia-Pacific region [4][64] 3. Profit Forecast and Investment Recommendations - Ctrip is projected to achieve revenues of 528.5 billion, 609.49 billion, and 682.46 billion yuan from 2024 to 2026, with corresponding net profits of 166.53 billion, 181.65 billion, and 208.52 billion yuan [10][11] - The report anticipates a compound annual growth rate (CAGR) of 13.6% for the online travel market from 2023 to 2026, driven by increasing internet penetration and service consumption [56][58]

Investment Rating - The investment rating for the company is "Outperform the Market" (maintained) [2] Core Views - The report highlights that Ctrip Group has achieved a doubling stock performance in 2024, with a 95% increase in Hong Kong stocks, driven by sustained travel demand and improved operational efficiency compared to pre-pandemic levels [4][5] - The resilience of domestic travel demand is supported by government policies aimed at boosting cultural and tourism consumption, with a notable increase in domestic travel participants and revenue growth [4][10] - The company's hotel business is expected to stabilize in pricing, with a projected recovery in hotel room rates in 2025, supported by increased online penetration and demand [4][25] - Ctrip's outbound tourism segment is anticipated to contribute significantly to growth, with international flight capacity recovering and a projected 17% increase in international flights in 2025 [4][50] Summary by Sections Company Overview - Ctrip Group has positioned itself as a leading player in the online travel agency (OTA) sector, benefiting from a strong recovery in domestic and outbound travel markets [3][4] Financial Performance - In the first three quarters of 2024, Ctrip's revenue grew by 19%, and Non-GAAP net profit increased by 44% compared to the previous year [4][5] - The company has maintained a stable commission rate for hotels, with expectations for room rates to stabilize in 2025 [25][34] Market Trends - The report notes a shift in consumer behavior towards experiential travel, with domestic tourism showing a double-digit growth in participants [10][17] - Ctrip's online penetration in the hotel sector is expected to improve, with a current online booking rate of approximately 40% for hotels compared to over 70% in the US [4][26] Future Outlook - The report anticipates that Ctrip's international business will continue to expand, with a focus on enhancing its market share in outbound travel as international flight capacities recover [44][50] - Government policies aimed at boosting service consumption and tourism are expected to provide a favorable environment for Ctrip's growth in 2025 [10][12]

Investment Rating - The report assigns a "Buy" rating to Trip.com Group with a target price of HKD 597.7, representing a 7.60% upside from the current price of HKD 555.5 [4][13] Core Views - Trip.com Group's 3Q24 performance exceeded expectations, driven by strong growth in domestic and outbound travel demand [2] - The company's international OTA platform Trip.com saw hotel and flight bookings grow over 60% YoY, with outbound travel recovering to 120% of 2019 levels [2] - Trip.com Group is well-positioned to benefit from the recovery of outbound travel, supported by increasing flight capacity and visa facilitation [10] - The company's domestic travel business is expected to grow further due to the resilience of travel demand and increasing online penetration [3] - Trip.com's international business is in a rapid growth phase, with significant potential for expansion and synergies between domestic and international operations [13] Business Performance - In 3Q24, Trip.com Group achieved total revenue of RMB 15.9 billion, up 15.5% YoY, with adjusted EBITDA of RMB 5.7 billion, up 23.9% YoY, and Non-GAAP net profit of RMB 6.0 billion, up 21.8% YoY [2] - Segment revenue breakdown: Accommodation booking revenue grew 21.7% YoY to RMB 6.8 billion, transportation ticketing revenue increased 5.3% YoY to RMB 5.7 billion, package tour revenue rose 17.3% YoY to RMB 1.6 billion, and corporate travel management revenue grew 11.0% YoY to RMB 0.7 billion [2] - Trip.com's international OTA platform contributed approximately 9% of total revenue, with Asia-Pacific market revenue growing over 70% YoY [11] Industry Trends - Domestic travel in China has shown strong recovery, with 2023 domestic trips reaching 4.9 billion, recovering to 81.4% of 2019 levels, and total spending recovering to 85.7% of 2019 levels [3] - Online travel booking users in China reached 500 million by December 2023, accounting for 46.6% of total internet users, indicating significant growth potential for online travel platforms [3] - Outbound travel is expected to reach 130 million trips in 2024, recovering to 84% of 2019 levels, driven by increasing flight capacity and visa facilitation [10] Financial Projections - Revenue is projected to grow to RMB 55.3 billion in FY24E and RMB 62.9 billion in FY25E, with Non-GAAP net profit expected to reach RMB 17.1 billion in FY24E and RMB 18.9 billion in FY25E [7][13] - EPS is forecasted to be RMB 25.02 in FY24E and RMB 27.79 in FY25E, with P/E ratios of 20.6x and 18.6x respectively [7][13] - The company's ROE is expected to improve to 11.31% in FY24E and 11.23% in FY25E, reflecting strong profitability and efficient capital utilization [16]

Investment Rating and Target Price - The report initiates coverage on Trip.com Group (9961 HK) with a "Buy" rating and a target price of HKD 582.2 [1] - The target price is based on an 18x PE multiple for 2025, reflecting a discount to the peer average of 21.9x due to recent valuation increases in US peers [6] Core Investment Thesis - Trip.com is a global leader in the OTA (Online Travel Agency) industry, with a strong position in China's high-end travel market and rapid global expansion [1] - The company benefits from increasing online penetration in domestic travel and structural growth in outbound travel, with its international platform Trip.com in a rapid growth phase [1] - Domestic market stability, rising profitability from outbound travel, and operational efficiency improvements are expected to drive sustained profit growth [1] Market Outlook and Industry Trends - Domestic tourism in China has recovered to 92% of 2019 levels in terms of trips and 100% in terms of revenue as of Q3 2024, with outbound and inbound travel expected to reach 80% of 2019 levels by 2024 [2] - China's tourism online penetration rate was 37% in 2022, significantly lower than the global average of 66%, indicating room for OTA platforms to outperform the broader tourism market [2] - Outbound travel is expected to benefit from international flight capacity recovery and policy support, with structural growth driven by expanding travel radius and increasing penetration in lower-tier cities [2] Accommodation Business - Trip.com has a strong foothold in China's high-star hotel market, with a stable supply chain and high user stickiness in high-tier cities [3] - The company's accommodation business is expected to maintain high growth from 2024-2026, driven by further online penetration in domestic hotels and rapid growth in overseas hotel bookings [3] - Trip.com's ADR (Average Daily Rate) and Take Rate are expected to remain stable, supporting revenue growth [3] Transportation Business - Transportation services, a key traffic driver for Trip.com, accounted for 56% of China's online air ticket booking market in 2019 [4] - Domestic transportation growth is expected to align with industry trends, while outbound travel demand is expected to drive higher-margin international ticket sales [4] - The business model relies on cross-selling to higher-margin accommodation and travel services, with over 30% of transportation users converting to other services as of H1 2024 [80] Financial Performance and Valuation - Revenue is forecasted to grow at a CAGR of 17% from 2024-2026, reaching RMB 72.5 billion in 2026, with adjusted net profit growing at a CAGR of 22% to RMB 23.6 billion [6] - The company's adjusted net profit margin improved significantly to 29.4% in 2023, up from 7.0% in 2022, driven by strong revenue recovery and cost control [45] - Trip.com's EV/EBITDA multiple is expected to decline from 11.3x in 2024 to 7.3x in 2026, reflecting improving profitability and cash flow [8] International Expansion - Trip.com's international platform, Trip.com, is in a rapid growth phase, with international OTA platform revenue growing 60% YoY in Q3 2024 [34] - The company aims to increase the contribution of international business to 40-50% of total revenue, leveraging its strong position in the Asia-Pacific region and growing outbound demand from China [72] Competitive Positioning - Trip.com maintains a strong competitive position in China's high-end travel market, with a differentiated brand image compared to competitors like Meituan and Tongcheng, which focus on lower-tier markets [21] - The company's high ADR (Average Daily Rate) in the accommodation segment, averaging RMB 331, is significantly higher than competitors, supporting its leading position in GMV (Gross Merchandise Value) [68]

Investment Rating - The report maintains a "Buy" rating for both the US-listed (TCOM) and Hong Kong-listed (09961 HK) shares of Trip com Group [5] Core Views - Trip com Group reported strong 3Q24 results with net revenue of RMB 15 9 billion (+16% YoY +32% QoQ) and non-GAAP net profit of RMB 6 billion (+22% YoY) [2] - The company's gross margin improved by 0 3 percentage points YoY to 82 4% in 3Q24 [2] - Outbound travel recovery led the industry with overseas hotel and flight bookings reaching 120% of pre-pandemic levels in 2019 [3] - International OTA platform hotel and flight bookings grew over 60% YoY with APAC bookings up more than 70% [3] Business Segment Performance - Accommodation revenue grew 22% YoY to RMB 6 8 billion in 3Q24 [2] - Transportation revenue increased 5% YoY to RMB 5 7 billion in 3Q24 [2] - Package tour revenue rose 17% YoY to RMB 1 6 billion in 3Q24 [2] - Corporate travel revenue grew 11% YoY to RMB 656 million in 3Q24 [2] Financial Projections - Non-GAAP net profit is forecasted to grow 32% 21% and 16% in 2024 2025 and 2026 respectively reaching RMB 24 2 billion by 2026 [3] - Revenue is expected to grow at a CAGR of 15 7% from 2024 to 2026 reaching RMB 69 6 billion in 2026 [4] - The company plans to enhance shareholder returns in 2025 potentially combining share buybacks with dividends [3] Valuation - The report assigns a 16X PE multiple for 2025 valuing the US-listed shares at $67 44/ADS and HK-listed shares at HK$524 87/share [3] Key Financial Metrics - ROE is projected to improve from 11 4% in 2024 to 12 0% in 2025-2026 [10] - Net margin is expected to remain stable at around 31 5% from 2024 to 2026 [10] - The company's cash position is forecasted to grow from RMB 43 4 billion in 2024 to RMB 76 5 billion in 2026 [8]

Investment Rating - Buy (Maintained) [1] Core Views - Trip com Group-S (09961 HK) reported strong Q3 2024 results with net revenue of RMB 15 9 billion up 16% YoY and adjusted EBITDA of RMB 5 7 billion with a margin of 36% up 2pct YoY Adjusted net income attributable to shareholders was RMB 6 billion up 22% YoY both exceeding Bloomberg consensus [1] - Domestic hotel ADR showed signs of stabilization with the YoY decline narrowing from double digits to low single digits in Q3 2024 The company's hotel occupancy rate in Q4 has surpassed the same period in 2023 and is expected to achieve better YoY growth in domestic hotel revenue [2] - Outbound travel continued to grow strongly with international flight capacity recovering to 80% of 2019 levels and outbound hotel and flight bookings reaching 120% of 2019 levels The company is expected to maintain rapid growth in outbound travel as international flights further recover [2] - Trip com the company's international platform saw significant growth in Q3 2024 with flight and hotel bookings increasing over 60% YoY contributing approximately 9% to total revenue Bookings from the Asia-Pacific region grew over 70% YoY Trip com has become the top OTA app in markets including South Korea Singapore Malaysia and Thailand [3] - Inbound travel also grew rapidly with inbound hotel bookings increasing approximately 100% YoY in Q3 2024 The expansion of visa-free policies is expected to further drive Trip com's growth [3] - Despite ongoing investments in international operations the company's Q3 2024 gross margin remained stable at 82% and adjusted operating profit margin increased by 2 3pct YoY to 34% exceeding expectations [3] Financial Forecasts and Valuation - Revenue is projected to grow from RMB 52 947 million in 2024E to RMB 67 055 million in 2026E with YoY growth rates of 18 96% 15 06% and 10 07% respectively [1] - Net income attributable to shareholders is expected to increase from RMB 16 680 million in 2024E to RMB 20 134 million in 2026E with YoY growth rates of 68 18% 10 20% and 9 54% respectively [1] - Non-GAAP net income attributable to shareholders is forecasted to grow from RMB 17 553 million in 2024E to RMB 20 945 million in 2026E with YoY growth rates of 34 29% 9 33% and 9 14% respectively [1] - EPS is projected to increase from RMB 24 40 in 2024E to RMB 29 46 in 2026E [1] - The company's P/E ratio based on the latest diluted EPS is expected to decrease from 19 06x in 2024E to 15 79x in 2026E [1] Market and Financial Data - The stock's closing price was HKD 500 00 with a 52-week range of HKD 251 40 to HKD 548 50 [6] - The company's market capitalization was HKD 341 763 89 million with a P/B ratio of 2 46x [6] - Total assets are projected to grow from RMB 247 738 51 million in 2024E to RMB 304 491 75 million in 2026E [11] - Net cash flow from operating activities is expected to increase from RMB 20 860 13 million in 2024E to RMB 23 885 32 million in 2026E [11]

Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Views - The report highlights that the company's Q3 2024 performance significantly exceeded expectations, driven by strong growth in international business [2] - The company's revenue for Q3 2024 reached 15.9 billion HKD, representing a year-over-year increase of 15.5%, slightly above Bloomberg consensus expectations [2] - Non-GAAP net profit for Q3 2024 was 6 billion HKD, up 21.7% year-over-year, and significantly higher than Bloomberg consensus expectations by 24.9% [2] - The report emphasizes that outbound and international business remain the main drivers of the company's performance growth, with international hotel and flight bookings surpassing 60% year-over-year growth [2] Financial Performance Summary - Q3 2024 revenue by segment: - Accommodation booking revenue: 6.8 billion HKD (yoy +21.7%) - Transportation ticketing revenue: 5.7 billion HKD (yoy +5.3%) - Vacation business revenue: 1.6 billion HKD (yoy +17.3%) - Business travel management revenue: 660 million HKD (yoy +11.0%) - Other business revenue: 1.2 billion HKD (yoy +40.9%) [2] - The company expects revenues of 52.8 billion, 60.7 billion, and 69.3 billion HKD for 2024, 2025, and 2026, respectively, with year-over-year growth rates of 18.4%, 15.1%, and 14.1% [4][6] - The projected adjusted net profits for 2024, 2025, and 2026 are 17.7 billion, 19.8 billion, and 23 billion HKD, respectively, with year-over-year growth rates of 35.7%, 11.4%, and 16.4% [4][6] Key Financial Metrics - Major financial indicators for 2023A, 2024E, 2025E, and 2026E: - Revenue: 44.6 billion, 52.8 billion, 60.7 billion, 69.3 billion HKD - Non-IFRS net profit: 13.1 billion, 17.7 billion, 19.8 billion, 23 billion HKD - Gross margin: 82% for 2024E and 2025E, 81% for 2026E - P/E ratio: 26.2 for 2023A, decreasing to 14.9 by 2026E [4][6]