Trip.com Earnings Overview
This is a big review as Trip.com provided a good look into domestic consumption. The company very well-run, in my opinion, and management are straight shooters. The company’s results annihilated analyst expectations. Its China-focused domestic travel business saw robust year-over-year growth (YoY), as domestic travel returned to pre-COVID levels, driving an impressive 124% year-over-year (YoY) gain in revenue. Accommodation reservation revenue increased 40% YoY, which represents a growth rate of 106% quarter-over-quarter, which is 15% higher than pre-COVID (2019). Hotel bookings and transportation ticketing revenue increased 40% and 24%, respectively, from pre-pandemic levels. Corporate travel revenue increased 100% YoY and 61% quarter over quarter, which is 87% higher than the 2019 level. The domestic China travel business is clearly back, though the company’s upside has been capped by limited outbound travel and inbound foreign tourists. Outbound hotel and air reservations are at 60% of 2019 levels, with most travelers headed to Hong Kong, Macau, Thailand, and Singapore. As governments communicate with one another, we should see an increase in flights to China and Asia, for that matter. Getting from Europe and the East Coast of the US to China on a non-Chinese airline isn’t easy though Trip.com should benefit as more airline routes come back online. Hat tip to management for keeping costs down as many sell-side analysts questioned the company about their decade-high margins. When asked about the state of China’s consumers, CFO
CFO
- Revenue +124% YoY to RMB 9.2 billion ($1.3 billion) versus analyst expectations of RMB 8.05 billion.
- Adjusted net income increased to RMB 2.065 billion ($300 million) from a loss of RMB -36 million versus analyst expectations of RMB 1.254 billion.
- Adjusted EPS increased to RMB 3.07 ($0.45) from a loss of RMB -0.06 versus analyst expectations of RMB 1.82.
Key News
Asian equities were largely lower except for Hong Kong, Mainland China, and Thailand, which outperformed.
Support authors and subscribe to content
This is premium stuff. Subscribe to read the entire article.