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Trip.com Group Ltd 09961

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Stock XHKG Rating as of
HKD 394.20 −5.80 (1.45%)
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As of Delayed Price Open
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Company Report

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Trip.com Begins to Aggressively Ramp International Revenue As It Explores New Growth Drivers

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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09961 is trading at a 11% premium.
Price
HKD 391.60
Fair Value
HKD 153.00
Uncertainty
High
1-Star Price
HKD 482.30
5-Star Price
HKD 535.30
Economic Moat
Lyjwp
Capital Allocation
Pqdfkkf

Bulls Say, Bears Say

Bulls

The company can eventually reach its 20%-30% long-term operating margin target as COVID-19 subsides.

Bears

Operating margins fall short of long-term outlook due to snags from COVID-19 or government policies. Continued lockdown will further complicate the outlook for the entire travel industry in China.

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Trading Information

Previous Close Price
HKD 400.00
Day Range
HKD 391.20–398.80
52-Week Range
HKD 240.60–400.60
Bid/Ask
HKD 394.20 / HKD 394.60
Market Cap
HKD 254.97 Bil
Volume/Avg
1.1 Mil / 1.9 Mil

Key Statistics

Price/Earnings (Normalized)
22.24
Price/Sales
5.45
Dividend Yield (Trailing)
—
Dividend Yield (Forward)
—
Total Yield
—

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
32,202
Website
https://www.ctrip.com

Competitors

Valuation

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Metric
09961
03690
TRIP
Price/Earnings (Normalized)
 22.2463.8920.27
Price/Book Value
 1.924.234.13
Price/Sales
 5.452.342.12
Price/Cash Flow
 —15.9620.72
Price/Earnings
09961
03690
TRIP

Financial Strength

Metric
09961
03690
TRIP
Quick Ratio
 0.941.402.20
Current Ratio
 1.171.752.27
Interest Coverage
 5.947.812.77
Quick Ratio
09961
03690
TRIP

Profitability

Metric
09961
03690
TRIP
Return on Assets (Normalized)
 5.23%3.06%3.92%
Return on Equity (Normalized)
 9.41%5.79%12.45%
Return on Invested Capital (Normalized)
 6.52%4.40%5.76%
Return on Assets
09961
03690
TRIP
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Travel Services Industry Comparables

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Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
BKNG
Booking Holdings IncLrhcpzvfYpjfr$120.2 Bil
ABNB
Airbnb Inc Ordinary Shares - Class AFqkxrrpfYcqpzb$103.5 Bil
RCL
Royal Caribbean GroupVvdlbnqtVydjh$35.2 Bil
TRPCF
Trip.com Group Ltd—Fjsgmxv$33.0 Bil
TCOM
Trip.com Group Ltd ADRHwkybcxwRsltyjl$32.3 Bil
CCL
Carnival CorpLhrslqmJxkzj$19.7 Bil
EXPE
Expedia Group IncZkpkxzzyXskgzd$18.5 Bil
NCLH
Norwegian Cruise Line Holdings LtdRccycpyRybgrss$8.3 Bil
TRIP
Tripadvisor IncDvswhykhHnwh$3.6 Bil
SABR
Sabre CorpSyvwgmwbFwdhzs$1.0 Bil

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