Investment Rating - The report maintains a "Buy" rating for Trip.com Group (TCOM) with a target price adjusted to $70.00, down from $71.00, reflecting a 20.4x PE for 2025E [1][4][12]. Core Insights - Trip.com reported total revenue of RMB 12.8 billion for Q4 2024, a 23% year-over-year increase, exceeding Bloomberg consensus by 4%. The non-GAAP operating profit was RMB 2.8 billion, benefiting from optimized operating expenses [1]. - For 2025, revenue is expected to grow by 20% to RMB 53.4 billion, with non-GAAP operating profit and net profit projected to increase by 23% and 38% respectively [1]. - The report indicates that while incremental investments may pressure short-term profits, they are expected to support long-term growth [3]. Summary by Sections Financial Performance - In Q4 2024, Trip.com achieved a non-GAAP operating profit margin of 21.6%, slightly above expectations, with operating expenses at 57.6% of total revenue, better than the anticipated 59.0% [3]. - The company’s revenue for FY 2024 is projected at RMB 53.4 billion, with a year-over-year growth of 19.8% [9]. Revenue Forecasts - The revenue forecast for Q1 2025 is estimated at RMB 13.8 billion, aligning with consensus expectations, driven by a 15% increase in domestic hotel bookings [2]. - The report anticipates a 60% year-over-year growth in Trip.com’s outbound tourism revenue for 2025, supported by incremental investments [2]. Valuation Metrics - The adjusted target price of $70.00 reflects a 22.2% upside from the current price of $57.30 [4]. - The report projects a non-GAAP net profit margin of 28.6% for 2025, down from previous estimates due to adjustments in outbound tourism revenue forecasts [12]. Investment Strategy - The report suggests that the recent stock price decline of 11% has already priced in concerns regarding potential profit margin compression due to increased investments for international expansion [1]. - The analysts express optimism about Trip.com’s ability to deliver positive financial results in upcoming quarters, driven by enhanced operational efficiency [1].

Investment Rating - The report maintains a "BUY" rating for Trip.com Group (TCOM) with a target price of US$70.00, reflecting a potential upside of 22.2% from the current price of US$57.30 [4][20]. Core Insights - Trip.com reported a total revenue of RMB12.8 billion for 4Q24, representing a 23% year-over-year increase, which was 4% above Bloomberg consensus estimates. The non-GAAP operating income was RMB2.8 billion, also exceeding consensus by 4% due to better-than-expected operating expenses [1]. - For 2024, Trip.com achieved a revenue growth of 20% year-over-year, totaling RMB53.4 billion, with non-GAAP operating profit and net profit growing by 23% and 38% year-over-year, respectively [1]. - The report anticipates a revenue growth of 16% year-over-year for 1Q25, aligning with consensus expectations, driven by solid booking volume growth in the domestic hotel business [2][3]. Summary by Sections Financial Performance - In 4Q24, Trip.com’s non-GAAP operating profit margin (OPM) was 21.6%, slightly better than consensus, while the gross profit margin (GPM) was 79.1%, which was below expectations [3]. - The company plans to increase investments to support long-term growth, which may lead to short-term margin pressures but is expected to enhance overall business performance in the future [3]. Revenue Forecasts - The revenue forecast for 2025 has been slightly increased by 1% to RMB61.6 billion, while the non-GAAP net profit forecast has been reduced by 1% due to anticipated slower growth in the outbound travel segment [12]. - The report estimates that Trip.com’s international business will see a revenue growth of 60% year-over-year in 2025, supported by increased investments [2]. Market Position - Trip.com’s outbound travel bookings have recovered to over 120% of 2019 levels in 4Q24, outperforming the overall market by approximately 30-40 percentage points [2]. - The company’s share price has dropped by 11% post-results, which the report suggests has already priced in concerns regarding potential margin contraction in 2025 [1].

Financial Data and Key Metrics Changes - In Q4 2024, Trip.com Group reported a net revenue of RMB 12.7 billion, representing a 23% increase year-over-year and a 20% decrease quarter-over-quarter [32] - For the full year of 2024, total net revenue was RMB 53.3 billion, reflecting a 20% year-over-year growth [32] - Adjusted EBITDA for Q4 was RMB 3.0 billion, compared to RMB 2.9 billion in the same period last year and RMB 5.7 billion in the previous quarter [38] - Diluted earnings per ordinary share for Q4 were RMB 3.09 or USD 0.42, while non-GAAP diluted earnings were RMB 4.35 or USD 0.60 [39] Business Line Data and Key Metrics Changes - Accommodation reservation revenue in Q4 was RMB 5.2 billion, a 33% increase year-over-year but a 24% decrease quarter-over-quarter [33] - Transportation ticketing revenue for Q4 was RMB 4.8 billion, a 16% increase year-over-year and a 15% decrease quarter-over-quarter [33] - Packaged tour revenue for Q4 was RMB 870 million, a 24% increase year-over-year but a 44% decrease quarter-over-quarter [34] - Corporate travel revenue for Q4 was RMB 702 million, an 11% increase year-over-year and a 7% increase quarter-over-quarter [35] Market Data and Key Metrics Changes - In 2024, outbound hotel and air ticket bookings recovered to more than 120% compared to 2019, outperforming the industry by 30% to 40% [16] - Inbound travel bookings on Trip.com platforms increased by over 100% year-over-year, with those from visa-free countries rising by over 150% [18] - The international business represented 14% of group revenue in Q4 and 10% for the full year of 2024 [10] Company Strategy and Development Direction - The company focuses on AI innovation to enhance travel accessibility and personalization, with tools like TripGenie seeing a 200% traffic surge [10] - Trip.com is committed to promoting inbound travel and rural revitalization as part of its sustainability initiatives [11][12] - The company aims to capitalize on trends among younger travelers and the silver generation, introducing tailored offerings for both demographics [25][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the travel market, highlighting strong demand for both domestic and international travel [50] - The company anticipates continued growth driven by the recovery of direct flights and relaxed visa restrictions [52][53] - Management emphasized the importance of enhancing operational efficiency and leveraging AI to support long-term growth [59] Other Important Information - The company announced a share repurchase program of up to USD 400 million and a cash dividend totaling approximately USD 200 million for 2025 [40][41] - As of December 31, 2024, the balance of cash and cash equivalents was RMB 90 billion or USD 12.3 billion [40] Q&A Session Summary Question: Thoughts on AI's impact on OTAs - Management believes AI will complement OTAs rather than replace them, enhancing personalized travel planning [45][47] Question: Current leisure and business travel demand outlook - Management sees strong demand, particularly in domestic travel and among younger and early retired travelers [50][51] Question: Outlook for operating margin trends - Management does not set specific margin targets but expects continuous improvement in operational efficiency to support margins [58][59] Question: Performance during Chinese New Year and hotel price outlook - Travel demand remained healthy during the holiday, with outbound bookings increasing over 20% year-over-year [63][64] Question: Outlook for outbound travel and capacity improvement - Outbound flight capacity is expected to recover to over 90% of pre-pandemic levels by 2025, with continued growth in outbound bookings [68][70] Question: Growth outlook for Trip.com platform - The platform is experiencing rapid growth, supported by a focus on customer service and AI investments [74][75] Question: Contribution of inbound travel to business - Inbound travel has significant potential, with management expecting it to become a major contributor to the industry [79][82] Question: Updates on capital return program - The dividend payout date is set for March 27, 2025, for ordinary shares, with a new capital return program authorized for 2025 [85]

Core Insights - Trip.com reported quarterly earnings of $0.60 per share, exceeding the Zacks Consensus Estimate of $0.52 per share, and showing an increase from $0.56 per share a year ago, resulting in an earnings surprise of 15.38% [1] - The company generated revenues of $1.75 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 3.22%, and up from $1.45 billion year-over-year [2] - Trip.com has consistently outperformed consensus EPS estimates over the last four quarters, achieving this four times [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.93 on revenues of $1.92 billion, and for the current fiscal year, it is $3.99 on revenues of $8.39 billion [7] - The estimate revisions trend for Trip.com is currently favorable, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Leisure and Recreation Services industry, to which Trip.com belongs, is currently ranked in the top 20% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Core Insights - Trip.com Group Limited reported strong financial results for the fourth quarter and full year of 2024, highlighting resilience in the travel market driven by increased traveler demand for exploration and cultural experiences [2][21] - The company is focused on investing in AI and promoting inbound travel to enhance the overall travel experience and expects continued growth in the industry [2] Financial Performance - For Q4 2024, net revenue was RMB12.7 billion (US$1.7 billion), a 23% increase year-over-year, but a 20% decrease from the previous quarter due to seasonality [3][21] - Full year 2024 net revenue reached RMB53.3 billion (US$7.3 billion), marking a 20% increase from 2023 [4] - Q4 2024 net income was RMB2.2 billion (US$300 million), up from RMB1.3 billion in Q4 2023 [22][23] - Full year 2024 net income attributable to shareholders was RMB17.1 billion (US$2.3 billion), compared to RMB9.9 billion in 2023 [24] Revenue Breakdown - Accommodation reservation revenue for Q4 2024 was RMB5.2 billion (US$709 million), a 33% increase year-over-year [4] - Transportation ticketing revenue for Q4 2024 was RMB4.8 billion (US$655 million), a 16% increase from the same period in 2023 [6] - Packaged-tour revenue for Q4 2024 was RMB870 million (US$119 million), a 24% increase year-over-year [8] - Corporate travel revenue for Q4 2024 was RMB702 million (US$96 million), an 11% increase from Q4 2023 [9] Cost and Expenses - Cost of revenue for Q4 2024 increased by 31% to RMB2.6 billion (US$362 million) compared to Q4 2023 [11] - Product development expenses for Q4 2024 rose by 16% to RMB3.4 billion (US$465 million) [13] - Sales and marketing expenses for Q4 2024 increased by 45% to RMB3.4 billion (US$462 million) [15] - General and administrative expenses for Q4 2024 increased by 19% to RMB1.0 billion (US$142 million) [17] Cash and Capital Return - As of December 31, 2024, the company had cash and cash equivalents totaling RMB90.0 billion (US$12.3 billion) [27] - The board of directors authorized a share repurchase program of up to US$400 million and a cash dividend of approximately US$200 million for the financial year 2024 [28]

Financial Results - Trip.com Group Limited (TCOM) is set to release its fourth-quarter financial results on February 24, with analysts expecting earnings of $3.95 per share, a decrease from $4.00 per share in the same period last year [1] - The company projects quarterly revenue of $12.32 billion, up from $10.32 billion a year earlier [1] Management Changes - On February 11, Trip.com announced the resignation of Mr. Junjie He, a director nominated by Baidu, and the appointment of Mr. Rong Luo, the executive vice president of Baidu Inc., as his successor [2] - Following this announcement, Trip.com shares increased by 1.4%, closing at $67.02 [2] Analyst Ratings - Benchmark analyst Fawne Jiang has a Buy rating with a price target of $80 [4] - Citigroup analyst Brian Gong maintains a Buy rating and raised the price target from $73 to $78 [4] - Barclays analyst Jiong Shao has an Overweight rating and increased the price target from $76 to $84 [4] - TD Cowen analyst Kevin Kopelman maintains a Buy rating and raised the price target from $56 to $71 [4] - Mizuho analyst James Lee has an Outperform rating and increased the price target from $65 to $78 [4]

Group 1: Company Performance - Trip.com closed at $66.11, reflecting a -0.85% change from the previous session, underperforming the S&P 500's daily loss of 0.43% [1] - Over the past month, Trip.com shares have decreased by 0.28%, lagging behind the Consumer Discretionary sector's gain of 14.82% and the S&P 500's gain of 2.6% [1] Group 2: Upcoming Earnings Report - Trip.com is scheduled to release its earnings on February 24, 2025, with projected earnings of $0.52 per share, indicating a year-over-year decline of 7.14% [2] - The consensus estimate for revenue is $1.69 billion, representing a 16.34% increase compared to the same quarter of the previous year [2] Group 3: Analyst Estimates and Ratings - Recent changes to analyst estimates for Trip.com reflect shifting business dynamics, with upward revisions indicating analysts' positive outlook on the company's operations [3] - Trip.com currently holds a Zacks Rank of 1 (Strong Buy), with no changes in the Zacks Consensus EPS estimate over the past month [5] Group 4: Valuation Metrics - Trip.com has a Forward P/E ratio of 16.71, which is lower than the industry average Forward P/E of 20.97, suggesting it is trading at a discount [6] - The company's PEG ratio is currently 0.6, compared to the Leisure and Recreation Services industry's average PEG ratio of 0.78 [7] Group 5: Industry Context - The Leisure and Recreation Services industry, part of the Consumer Discretionary sector, holds a Zacks Industry Rank of 49, placing it in the top 20% of over 250 industries [8] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Group 1 - Trip.com closed at $69.24, reflecting a -0.72% change from the previous day, underperforming the S&P 500's 0.01% loss, while the Dow dropped 0.37% and the Nasdaq increased by 0.41% [1] - Over the past month, Trip.com shares gained 5.97%, compared to a 9.91% gain in the Consumer Discretionary sector and a 4.88% gain in the S&P 500 [1] Group 2 - Trip.com is set to release its earnings on February 24, 2025, with projected EPS of $0.52, indicating a 7.14% decline from the same quarter last year, while revenue is expected to reach $1.69 billion, representing a 16.34% growth year-over-year [2] Group 3 - Recent modifications to analyst estimates for Trip.com are crucial as they reflect short-term business trends, with positive revisions indicating a favorable business outlook [3] - The Zacks Rank system, which incorporates estimate changes, has shown a correlation with stock price performance, with Trip.com currently holding a Zacks Rank of 1 (Strong Buy) [4][5] Group 4 - Trip.com has a Forward P/E ratio of 17.48, which is lower than the industry average of 20.57, and a PEG ratio of 0.63, compared to the industry average PEG ratio of 0.78 [6] Group 5 - The Leisure and Recreation Services industry, which includes Trip.com, has a Zacks Industry Rank of 37, placing it in the top 15% of over 250 industries, indicating strong performance potential [7]

Core Viewpoint - Trip.com Group Limited is set to announce its fourth quarter and full year results for 2024 on February 24, 2025, after market close [1] Group 1: Financial Announcement - The financial results announcement will take place on February 24, 2025, U.S. Time [1] - A conference call will be hosted by the management team at 7:00 PM U.S. Eastern Time on the same day [2] - The conference call will be available via live webcast and will be archived for twelve months [2] Group 2: Participation Details - Participants must pre-register to join the conference call using a provided registration link [2][3] - Upon registration, participants will receive dial-in numbers and a unique access PIN for the call [3] Group 3: Company Overview - Trip.com Group Limited is a leading global one-stop travel platform, offering a comprehensive suite of travel products and services [4] - The company operates under various brands, including Ctrip, Qunar, Trip.com, and Skyscanner, and aims to provide cost-effective travel bookings and support [4] - Founded in 1999, the company was listed on Nasdaq in 2003 and on HKEX in 2021 [4]

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