To The Moon

$Trip.com Group Limited(TCOM)$ is a China-based online travel site operator and they will be reporting their earnings after market close on 24 Feb 2025.

Trip.com has benefited from a travel boom after China's long Covid restrictions were lifted in late 2022.

Now Trip.com Group is poised to gain from catering to senior citizens’ growing interest in travel and travel bookings from lower-tier cities in China. Using artificial intelligence (AI), the company has been efficiently serving more people.

The earnings per share is estimated at 54 cents with revenue expected to come in at $1.69 billion.

Trip.com (TCOM) Last Positive Earnings Call Give 7.81% Change Since

TCOM investors have gained 7.81% since its last earnings call on 18 Nov 2024 which gave a positive sentiment, the earnings call reflected a robust performance with significant growth in revenue, international expansion, and technological advancements through AI.

Despite some challenges in achieving full recovery in flight capacity and hotel pricing, the overall market conditions and strategic initiatives position the company for continued success.

The positive sentiment was mainly due to :

Strong Revenue Growth : Net revenue in Q3 grew by 16% year-over-year and 24% from the previous quarter, reaching CNY 15.9 billion.

Outstanding Performance in Outbound Travel : Outbound hotel and air ticket bookings recovered to 120% compared with 2019 levels, outperforming the industry by 40%.

International Expansion Success : Air ticket and hotel bookings on international OTA platform rose by over 60% year-over-year, with APAC bookings increasing by more than 70%.

AI and Technology Integration : Significant investment in AI to enhance user experience, improving user engagement and conversion rates, and operational efficiencies.

Significant Growth in Senior Travel Segment : Travel bookings from users aged 50 and above rose by 26% compared to the same period last year, with the 61 to 65 age cohort experiencing a 58% increase.

But there are some challenges in Q3 2024 which might be seen to appear again in Q4 2024, there was challenges in Flight Capacity Recovery, as the outbound flight capacity reached around 80% of the 2019 level in Q3, indicating that full recovery is yet to be achieved.

The hotel prices are still below last year (2023)'s level, although the gap has narrowed.

Trip.com (TCOM) Guidance

During the third quarter 2024 earnings call for Trip.com Group (9961.HK), executive Jane Sun highlighted key financial metrics and market trends. The company reported a 16% year-over-year increase in net revenue, totaling CNY 15.9 billion, driven by robust travel demand during the summer and National Day holiday. Accommodation reservation revenue grew by 22% year-over-year, reaching CNY 6.8 billion, while transportation ticketing revenue increased to CNY 5.7 billion. The company experienced a 17% year-over-year rise in packaged tour revenue, amounting to CNY 1.6 billion. Strong outbound travel demand was evident, with outbound hotel and air ticket bookings surpassing 2019 levels by 120%, and international flight market recovery reaching 80% of pre-pandemic capacity.

The APAC region contributed significantly to the growth, with hotel and air reservations rising over 70% year-over-year. Adjusted EBITDA was reported at CNY 5.7 billion, marking an increase from both the previous year and quarter. As the company continues to leverage AI for enhancing travel experiences and operational efficiencies, it also anticipates a sustained growth trajectory, supported by strategic investments and innovations across its global platform.

I think for Q4 2024, we need to continue to monitor management’s commentary on 2025 demand trends, cost controls, and capital allocation (e.g., buybacks, dividends). Investors with a bullish view on China’s travel recovery could consider TCOM as a high-beta play, but diversification across travel and consumer discretionary sectors is prudent.

Here Are Some Factors That Could Affect Trip.com Q4 2024 Earnings.

Travel Recovery : While we know that Trip.com have benefitting from the post-pandemic travel demand, particularly in China and Asia-Pacific, has rebounded, though unevenly. Q4 2024 likely benefits from China’s National Day Golden Week (October) and year-end holiday travel, which could boost domestic bookings.

International Travel: China’s gradual reopening to outbound tourism may drive growth, but geopolitical tensions (e.g., U.S.-China relations) and visa processing delays could temper gains.

Economic Factors: Concerns about China’s economic slowdown, weak consumer confidence, and youth unemployment may weigh on discretionary travel spending.

Golden Week Impact: Q4 typically includes China’s October holiday, a peak travel period. Strong demand for domestic and short-haul international trips could lift results.

Competition: Rivals like Fliggy (Alibaba), Meituan, and Qunar may pressure pricing. Trip.com’s focus on premium services and global partnerships (e.g., with airlines/hotels) could help maintain market share.

China’s Tech Regulations: Ongoing scrutiny of data security and antitrust practices could impose compliance costs.

FX Volatility: A weaker yuan (CNY) against the USD might dent international revenue conversions.

What Are The Key Metrics We Can Look At For Trip,com Q4 2024 Earnings

Here are some of the key metrics I feel that investors should watch :

Domestic Travel: Strength in hotel/flight bookings and packaged tours.

International Bookings: Recovery in cross-border travel, especially to Asia (e.g., Japan, Southeast Asia). The international expansion progress in markets like Europe and North America.

User Engagement: Monthly active users (MAUs) and repeat booking rates.

Operational Efficiency: Cost controls and improved margins due to AI-driven personalization and streamlined operations.

Profit Margins: Sustainability of EBITDA margins (recently ~20–25%).

2025 Guidance: Outlook for Chinese consumer spending and global travel demand.

Trip.com (TCOM) Price Target

Based on 6 Wall Street analysts offering 12 month price targets for Trip.com Group Ltd. Sponsored ADR in the last 3 months. The average price target is $83.67 with a high forecast of $100.00 and a low forecast of $78.00. The average price target represents a 26.56% change from the last price of $66.11.

We saw that Trip.com has managed to hold onto the gains that Chinese ADRs got from the rally trigger by stimulus hops in late September to early October 2024, now we are seeing a price consolidation with a potential buy price at around $66 dollars.

Technical Analysis - Exponential Moving Average (EMA)

Currently we are seeing that Trip.com going into consolidation where TCOM shares may be pricing in strong Q4 results, leaving room for volatility if earnings miss expectations.

The concerns of TCOM trading below the 50-day moving average might be due to the ESG considerations where investors may scrutinize sustainability efforts (e.g., carbon-neutral travel options).

In order for the bulls to succeed in creating a daily uptrend, we would need to consider these upside catalysts, where faster-than-expected recovery in long-haul international travel and strategic partnerships (e.g., with payment platforms or airlines) could help to boost Trip.com sales.

For now, the bulls would need to defend the 200-day MA level, but the current price at $66 could be a nice buy point considering that we are seeing chinese ADR stocks making a rally due to the positive sentiment for the chinese stocks.

Summary

Trip.com’s Q4 2024 earnings are likely to reflect steady growth in domestic travel and incremental gains in international recovery, tempered by China’s economic challenges. I

If results meet or exceed expectations which hinge particularly on margin resilience and international bookings, then the stock could rally. However, cautious guidance or macroeconomic concerns may lead to post-earnings volatility.

Appreciate if you could share your thoughts in the comment section whether you think Trip.com could provide an earnings surprise to warrant a rally.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.