Trip.com (TCOM US, 9961 HK) exceeded expectations in terms of revenue, net income, and EPS in their recent earnings report. Executive Chairman James Liang pointed to a significant increase in domestic and outbound travel demand in China, with inbound tourist travel growing by 400% year over year. CEO Jane Sun noted a 20% increase in domestic hotel bookings and a 30% increase in air ticket bookings compared to the previous year. The company plans to focus on attracting more users from broader Asia, which is 1.5 times larger than China.
Revenue for Trip.com increased by 29% to RMB 11.90B ($1.6B) compared to the previous quarter, while adjusted net income and EPS also saw significant increases of 96% and 95% respectively. The company’s performance exceeded analyst expectations on all fronts. Despite a positive earnings report, Asian markets saw a decline as concerns grew following Palo Alto Network’s missed earnings report. Hong Kong’s market had more decliners than advancers, with the Hang Seng and Hang Seng Tech still outperforming other major indices year-to-date.
In Hong Kong, heavily traded stocks included Tencent, Li Auto, Meituan, and Alibaba HK, with various factors influencing their performance. JD.com announced a $1.5B convertible sale after trading closed to fund further stock buybacks. Southbound Stock Connect saw a net buy of $60mm, while Mainland China’s market remained fairly stable. The Hang Seng and Hang Seng Tech both experienced declines, with all sectors seeing negative results.
Shanghai, Shenzhen, and STAR Board also saw declines in their markets, with energy, financials, and utilities being the top-performing sectors. Northbound Stock Connect saw foreign investors selling $277mm of Mainland stocks, with CATL being a notable net buy. Overall, the Chinese and Asian markets saw mixed results, with some sectors performing better than others.
Upcoming webinars on Chinese equity markets and US-China relations were announced, providing opportunities for further insight into these topics. Trip.com’s positive earnings report reflects the rebound in travel demand in China, with the company planning to focus on attracting users from broader Asia. Despite market declines in Asia, the long-term outlook for the travel industry in the region remains positive as restrictions ease and demand increases.
