Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Equity Bottom-Up

<ul>
<li>TCOM reported C3Q24 revenue 1.4%/1.6% higher than our est./cons., non-GAAP operating income is 12.5%/5.4% higher than our est./cons., mainly due to strong domestic sales and efficient cost control.</li>
<li>We expect revenue growth to accelerate in 4Q24 and 2025,backed by domestic travel recovery and steady overseas expansion.AI powered cost saving bringing extra leverage in margin is an additional positive.</li>
<li>We keep the stock as BUY rating and raise TP to US$74/ADS.</li>
</ul>


TCOM reported C3Q24 revenue 1.4%/1.6% higher than our est./cons., non-GAAP operating income is 12.5%/5.4% higher than our est./cons., mainly due to strong domestic sales and efficient cost control.
We expect revenue growth to accelerate in 4Q24 and 2025,backed by domestic travel recovery and steady overseas expansion.AI powered cost saving bringing extra leverage in margin is an additional positive.
We keep the stock as BUY rating and raise TP to US$74/ADS.


[Trip.com (TCOM US, BUY, TP US$74) Target Price Change]: C3Q24 Review: Domestic Story Back in Focus

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

<ul>
<li>Media rife with narrative of booming inbound foreign tourism to China</li>
<li>But the numbers are well below historical highs, and climbing up from low base</li>
<li>Chinese tourists, not foreign, determine strength of Chinese tourism recovery</li>
</ul>


Media rife with narrative of booming inbound foreign tourism to China
But the numbers are well below historical highs, and climbing up from low base
Chinese tourists, not foreign, determine strength of Chinese tourism recovery


Chinese Inbound Foreign Tourist Arrivals Up 153% Y/Y in H124?! Much Ado About (Almost) Nothing

<ul>
<li>Despite slower top-line growth, Trip.com posted firmer margins in Q224</li>
<li>Cash Operating Expenses as a % of Net Revenue fell by around -250 bps Y/Y</li>
<li>Post-Covid, Trip.com has less competition; BUY with target of US$58 per ADS</li>
</ul>


Despite slower top-line growth, Trip.com posted firmer margins in Q224
Cash Operating Expenses as a % of Net Revenue fell by around -250 bps Y/Y
Post-Covid, Trip.com has less competition; BUY with target of US$58 per ADS


Trip.com Q224: Slower Growth | But Higher Margins | Competition Has Eased | BUY with US$58 Target

<ul>
<li>TCOM reported C2Q24 revenue in-line with our est./cons., non-GAAP operating income also in-line with our est./cons., and non-GAAP net income beat our est./cons. by 18%/40%,mainly due to rising equity income</li>
<li>Robust int'l growth offset weakness in domestic. With services possibly included in the government consume subsidy in C2H24/1H25 and Rmb's appreciation.</li>
<li>We feel it is time to buy TCOM again, TP to US$50 from US$42.</li>
</ul>


TCOM reported C2Q24 revenue in-line with our est./cons., non-GAAP operating income also in-line with our est./cons., and non-GAAP net income beat our est./cons. by 18%/40%,mainly due to rising equity income
Robust int'l growth offset weakness in domestic. With services possibly included in the government consume subsidy in C2H24/1H25 and Rmb's appreciation.
We feel it is time to buy TCOM again, TP to US$50 from US$42.


[Trip.com (TCOM US, BUY, TP US$50) Rating Change]: Beyond the Difficult Time…Upgrade to BUY

<ul>
<li>July outbound travel (and seat capacity) fnally approached pre-Covid19 levels</li>
<li>Domestic air travel demand also showed modest Y/Y improvement in July </li>
<li>We still like Trip.com on improving profitability, BUY with US$55 target</li>
</ul>


July outbound travel (and seat capacity) fnally approached pre-Covid19 levels
Domestic air travel demand also showed modest Y/Y improvement in July 
We still like Trip.com on improving profitability, BUY with US$55 target


Monthly Chinese Tourism Tracker | Outbound Activity Approaches Pre-Covid Levels | (August 2024)

China

Trip.com Group Ltd. provides online travel agency services. The Company offers mobile applications, hotel reservations, flight ticketing, package tours, corporate travel management, and train ticketing services.

Price Gauge
52-week Range	0.00 - 0.00
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Trip.com (TCOM US)

[Trip.com (TCOM US, BUY, TP US$74) Target Price Change]: C3Q24 Review: Domestic Story Back in Focus

TCOM beats revenue and operating income estimates in Q3, expects growth to accelerate in Q4 and 2025 with domestic travel recovery and overseas...

Blue Lotus Research Institute

Chinese Inbound Foreign Tourist Arrivals Up 153% Y/Y in H124?! Much Ado About (Almost) Nothing

Yes, foreign inbound travel to China has shown strong growth so far in 2024, but the numbers are rising from a very low base, and ultimately matter...

Tracking Traffic

Trip.com Q224: Slower Growth | But Higher Margins | Competition Has Eased | BUY with US$58 Target

Trip.com posted slower revenue growth in Q2, but margins improved as the company expertly managed operating expenses. Post-Covid, Trip.com's...

Tracking Traffic

[Trip.com (TCOM US, BUY, TP US$50) Rating Change]: Beyond the Difficult Time…Upgrade to BUY

TCOM's Q2 revenue and net income beat expectations, driven by international growth and rising equity income. Analysts recommend buying with a...

Blue Lotus Research Institute

Monthly Chinese Tourism Tracker | Outbound Activity Approaches Pre-Covid Levels | (August 2024)

July data shows continuing improvement in Chinese outbound and domestic travel activity. We still like shares of Trip.com, and retain our BUY...

Tracking Traffic

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

[Trip.com (TCOM US, BUY, TP US$74) Target Price Change]: C3Q24 Review: Domestic Story Back in Focus

​TCOM beats revenue and operating income estimates in Q3, expects growth to accelerate in Q4 and 2025 with domestic travel recovery and overseas...

Blue Lotus Research Institute

Chinese Inbound Foreign Tourist Arrivals Up 153% Y/Y in H124?! Much Ado About (Almost) Nothing

Yes, foreign inbound travel to China has shown strong growth so far in 2024, but the numbers are rising from a very low base, and ultimately matter...

Tracking Traffic

Trip.com Q224: Slower Growth | But Higher Margins | Competition Has Eased | BUY with US$58 Target

Trip.com posted slower revenue growth in Q2, but margins improved as the company expertly managed operating expenses. Post-Covid, Trip.com's...

Tracking Traffic

[Trip.com (TCOM US, BUY, TP US$50) Rating Change]: Beyond the Difficult Time…Upgrade to BUY

​TCOM's Q2 revenue and net income beat expectations, driven by international growth and rising equity income. Analysts recommend buying with a...

Blue Lotus Research Institute

Monthly Chinese Tourism Tracker | Outbound Activity Approaches Pre-Covid Levels | (August 2024)

July data shows continuing improvement in Chinese outbound and domestic travel activity. We still like shares of Trip.com, and retain our BUY...

Tracking Traffic

TCOM beats revenue and operating income estimates in Q3, expects growth to accelerate in Q4 and 2025 with domestic travel recovery and overseas...

TCOM's Q2 revenue and net income beat expectations, driven by international growth and rising equity income. Analysts recommend buying with a...