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Trip.com Group Ltd ADR TCOM

Morningstar Rating
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Stock XNAS Rating as of
$50.94 +2.20 (4.51%)
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As of Delayed Price Pre-Open: $51.21 +0.27
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Company Report

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Trip.com on Pace for Full Recovery in 2024, but Travel Demand May Be Decelerating

Kai Wang

Narrow-moat Trip.com competes in China’s crowded online travel agent, or OTA, industry by leveraging the largest selection of both domestic and international hotels in China on its platform and relying on user stickiness as a one-stop shop for travel ticketing, accommodations, and packaged tours. The platform is now also generating revenue from advertisement in which it hopes to take 3%-5% of the ad market, but nearly all its revenue streams are travel-related, and coronavirus lockdowns in China has cratered demand due to the inability to travel or unwillingness to quarantine.

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Price vs Fair Value

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TCOM is trading within a range we consider fairly valued.
Price
$50.95
Fair Value
$25.00
Uncertainty
High
1-Star Price
$67.60
5-Star Price
$36.10
Economic Moat
Glwvyw
Capital Allocation
Tctzkvsxn

Bulls Say, Bears Say

Bulls

The number of Chinese passport holders is only about 10%-15% of the population, which should provide Trip.com with secular demand given the low saturation.

Bears

International expansion may fall flat given greater competition beyond China's borders and could pressure margins as it prioritizes growth.

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Trading Information

Previous Close Price
$48.74
Day Range
$49.80–51.29
52-Week Range
$30.70–51.89
Bid/Ask
$51.20 / $51.49
Market Cap
$32.94 Bil
Volume/Avg
4,220 / 3.9 Mil

Key Statistics

Price/Earnings (Normalized)
18.54
Price/Sales
5.43
Dividend Yield (Trailing)
—
Dividend Yield (Forward)
—
Total Yield
0.71%

Company Profile

Trip.com is the largest online travel agent in China and is positioned to benefit from the country's rising demand for higher-margin outbound travel as passport penetration is only 12% in China. The company generated about 78% of sales from accommodation reservations and transportation ticketing in 2020. The rest of revenue comes from package tours and corporate travel. Prior to the pandemic in 2019, the company generated 25% of revenue from international business, which is important to its margin expansion. Most of sales come from websites and mobile platforms, while the rest come from call centers. The competes in a crowded OTA industry in China, including Meituan, Alibaba-backed Fliggy, Tongcheng, and Qunar. The company was founded in 1999 and listed on the Nasdaq in December 2003.
Sector
Consumer Cyclical
Industry
Travel Services
Stock Style Box
Large Growth
Total Number of Employees
36,249
Website
https://www.ctrip.com

Competitors

Valuation

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Metric
TCOM
03690
TRIP
Price/Earnings (Normalized)
 18.5426.8120.40
Price/Book Value
 1.904.084.16
Price/Sales
 5.432.252.13
Price/Cash Flow
 18.9823.5520.85
Price/Earnings
TCOM
03690
TRIP

Financial Strength

Metric
TCOM
03690
TRIP
Quick Ratio
 1.081.572.20
Current Ratio
 1.231.822.27
Interest Coverage
 5.1610.272.77
Quick Ratio
TCOM
03690
TRIP

Profitability

Metric
TCOM
03690
TRIP
Return on Assets (Normalized)
 6.13%8.68%7.07%
Return on Equity (Normalized)
 11.06%16.49%22.44%
Return on Invested Capital (Normalized)
 7.65%11.89%10.49%
Return on Assets
TCOM
03690
TRIP
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Travel Services Industry Comparables

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Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
BKNG
Booking Holdings IncHlcpznxbcSvdcgj$118.3 Bil
ABNB
Airbnb Inc Ordinary Shares - Class AXkgdmcqkzNpknxmq$99.2 Bil
RCL
Royal Caribbean GroupFcksvbqtwTmknbm$35.4 Bil
TRPCF
Trip.com Group Ltd—Gwwcqq$31.9 Bil
CCL
Carnival CorpCmbwktlsPblgkp$19.0 Bil
EXPE
Expedia Group IncWkwtjcnkQmvfjb$18.0 Bil
VIK
Viking Holdings Ltd—Jhg$11.3 Bil
NCLH
Norwegian Cruise Line Holdings LtdTxbgssmdPrzltc$6.9 Bil
TRIP
Tripadvisor IncMrpcbhxZppw$3.7 Bil

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