Results beat; travel demand remains resilient

Results beat;traveldemandremainsresilient Target PriceUS$83.00Up/Downside58.8%Current PriceUS$52.27 Trip.com Group (TCOM) released (26Feb)4Q25results: total revenue wasRMB15.4bn, up20.8% YoY,4% better thanBloomberg consensus estimatesdriven by anall-roundbeat acrosssegmentsespecially in corporate travel,package tour, and Others. Non-GAAP operating income (OP) was RMB3.2bn,2% better than consensus, thanks to the beat in revenue. For 2025, totalrevenue/non-GAAP OP grew 17/11%YoY.While TCOM is facing somesentiment-drivenheadwinds, we believe its competitive advantages relative todomestic peers—including robust supply chain capabilities, high servicequality, comprehensive product offerings, and global coverage—remain intactand supportive of its long-term growth trajectory. Its international expansion isalso on track to unlock further long-term development opportunities.Our DCF-based target price remains unchanged at US$83.0, translating into 20x 2026EPE (non-GAAP). Maintain BUY. China Internet Saiyi HE, CFA(852) 3916 1739hesaiyi@cmbi.com.hk Ye TAO, CFA(852) 3850 5226franktao@cmbi.com.hk Wentao LU, CFAluwentao@cmbi.com.hk Domesticand outbound travel demand remains resilient.1)Fordomestic business, management noted healthy booking volume growthQTD in 1Q26, with domestic hotel booking volume growth standing at low-teens YoY, and transportation ticketing volume growthinline with industry;2)Outbound air ticket and hotel bookings on TCOM’s platform bothrecorded teenslevel of growth;3) For pure international business, Trip.com/Skyscanner&othersaccounted for18/7%%of group-level revenue in 4Q25,and revenue growthof Trip.com stayedatover 60% YoYin the quarter,andwe are anticipating the over60% YoY revenue growth to sustain in 1Q26E,driven by robust volume growth.Overall,weexpecttotal revenue growth of15% YoY, with totalrevenueto reachRMB15.9bnin1Q26E,1% higher thanBloomberg consensus. Stock Data Driving operating efficiency improvement for international businessamid robust revenue growthtrajectory.TCOM’s non-GAAP OPM for4Q25was20.7%,0.4pptsshy of consensus,which we attribute to thestronger-than-expected revenue growthof Trip.com which is still in lossmaking stage.Despite that Trip.com is still enjoying strong revenue growth,TCOM guided to driveoperating efficiency improvement for the business,and operating loss margin for Trip.com should see an improvement trendin2026,in our view.For 2026E,we are estimating non-GAAP OP ofRMB20.2bn, up12% YoY, translating into non-GAAP OPM of28.3%(2025:28.9%). Source: FactSet Results comparison and changes in forecast We lift2026E revenue forecast by 0.7%, to account for more robust-than-expectedinternational business revenue growth, as well as more solid-than-expected revenuegrowth in package tour and corporate travelbusiness, whileour non-GAAPOPM forecastislowered to 28.3% (from 28.9%) accordingly to reflect the increase in revenue contributionof international business which is still in loss making stage. Disclosures& Disclaimers Analyst CertificationThe research analyst who is primary responsible for the content of this research report, in whole or in part, certifies thatwith respect to the securities or issuer that the analyst coveredin this report: (1) all of the views expressed accurately reflect his or her personal views about the subject securities or issuer; and (2)no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in this report.Besides, the analyst confirms that neither the analyst nor his/her associates (as defined in the code of conduct issued by The Hong Kong Securities and Futures Commission) (1) have dealt in or traded in the stock(s)covered in this research report within 30 calendar days prior to the date of issue of this report; (2) willdeal in or trade in the stock(s) covered in this research report 3 business days after the date of issue of this report; (3)serve as an officer ofany of the HongKong listed companies covered in this report; and (4) have any financial interests in the Hong Kong listed companies coveredin this report. CMBIGM RatingsBUY : Stock with potential return of over 15% over next 12 monthsHOLD:Stock with potential return of +15% to-10% over next 12 monthsSELL: Stock with potential loss of over 10% over next 12 monthsNOT RATED: Stock is not rated byCMBIGM :Industry expected to outperform the relevant broad market benchmark over next 12 months:Industry expected to perform in-line with the relevant broad market benchmark over next 12 months:Industry expected to underperform the relevant broad marketbenchmark over next 12 monthsCMB InternationalGlobal MarketsLimited Address: 45/F, Champion Tower, 3 Garden Road, Hong Kong, Tel: (852) 3900 0888 Fax: (852) 3900 0800CMB InternationalGlobal MarketsLimited (“CMBIGM”) is a wholly ownedsubsidiary of CMB International Capital Corporation Limited (a wholly ownedsubsidiary of China Merchants Bank) Important D