- BUY Entry – 190 Target – 230 Stop Loss – 170
- Trip.com Group Limited, formerly Ctrip.com International, Ltd., is a travel service provider in China that provides accommodation booking, transportation ticketing, package tours and corporate travel management. The Company aggregates hotel and transportation information to help leisure and business travelers make reservations. The Company helps leisure travelers book travel packages and guided tours and helps corporate clients manage their travel needs. The Company also offers a range of travel-related services to meet the different booking and travel needs of leisure and business travelers, including visitor reviews, attraction tickets, travel-related financial services, car services, travel insurance services and passport services. The Company also offers package tours for independent leisure travelers, including tour groups, semi-tour groups and private groups, as well as package tours that require different transportation arrangements (such as cruise, buses or self-driving).
FY21 earnings review. On 24th March, the company announced its FY21 annual results. Net revenue (breakdown is shown below) increased moderately by 9% YoY to RMB20bn in FY21. Adjusted EBITDA dropped by 23.5% YoY to RMB1.3bn. Net loss attributable to company shareholders was RMB550mn compared to a net loss of RMB3.2bn in FY20. Non-GAAP net income attributable to company shareholders was RMB1.4bn in FY21 compared to a net loss of RMB913mn in FY20.
| Segment revenue (RMB bn) | FY21 | FY20 | YoY change |
| Accommodation reservation | 8.1 | 7.1 | 14.2% |
| Transportation ticketing | 6.9 | 7.1 | -3% |
| Package-tour | 1.1 | 1.2 | -11% |
| Corporate travel | 1.3 | 0.9 | 54% |
| Others | 2.5 | 1.9 | 30% |
- Risk and opportunity. The recovery of the tourism sector in China shows strong resilience during the COVID-19 period. The three main waves of infections, namely Alpha, Delta, the current Omicron, resulted in instant lockdowns of cities. However, after the previous two infection waves tapered, the pent-up demand for travelling substantially helped the recovery of the businesses, especially during the ensuing golden week holiday seasons. At the moment, China is undergoing main cities lockdowns amidst rising COVID cases. If China manages to contain the spread, the company will see a surge in bookings in the upcoming May Day holiday and summer holiday.
- Updated market consensus of the EPS growth in FY22/23 is 64.0%/145.1% YoY respectively, which translates to 43.7x/17.8x forward PE. Bloomberg consensus average 12-month target price is HK$255.2.