【行业研究报告】携程-Pent-up demand boosts revenue recovery

8Mar2023
CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdate
Trip.com(TCOMUS)
Pent-updemandboostsrevenuerecovery
Trip.comGroup(TCOM)announced4Q22resultson7Mar:netrevenuewas
RMB5.0bn,up7%YoY,3/4%aheadofour/Bloombergconsensusestimates,and
was60%ofthe4Q19level.Non-GAAPnetincomewasRMB498mn,betterthan
ourforecast/consensusestimateoflossatRMB140/152mn,thankstobetter-
than-expectedcostsaving.Recoveryinbothdomesticandoutboundtravelin
1Q23wasbetterthanourexpectation,aidedbythereleaseofpent-updemand,
especiallyforbusinesstravel.ThecostsavingmeasuresadoptedbyTCOMamid
industryheadwindcouldaidrapidmarginrecoverywhenrevenuegeneration
normalizes,inourview.Toaccountforbetter-than-expectedrevenueand
earningsrecovery,weliftedourDCF-basedtargetpriceby12%toUS$44.6per
ADS,translatinginto37x/23x2023/2024EPE(non-GAAP).MaintainBUY.
Recoveryinbothoutboundtravelandinternationaltravelbusinessis
betterthanexpectation.Althoughtheindustrylevelinternationalflight
betterthanexpectation.Althoughtheindustrylevelinternationalflight
capacityhasonlyrecoveredto15-20%ofpre-pandemiclevel,management
highlightedrecentoutboundtravelbookingsonTCOM’splatformhas
recoveredmorethan40%ofpre-pandemicleveldespitecapacitylimitation,
whichmanagementattributedtoTCOM’sdeepertieswithsuppliers.In
addition,managementnotedthatoverallairticketrevenuefromTCOM’s
globalplatformhasfullyrecoveredcomparedtopre-pandemiclevel,andhotel
bookingsonglobalplatformhashitarecordhighin4Q22.
Domestichotelandairbookingshavesurpassed2019levelin1Q23.In
4Q22,TCOM’srevenuefromtransportation-ticketing(TT)serviceswas
RMB2.2bn,up45%YoYandreached64%ofthe4Q19level.Revenuefrom
accommodationreservation(AR)businesswasRMB1.7bn,down12%YoY
andwas57%ofthe4Q19level.Managementnotedarapidrecoverytrend
posttherelaxationofpandemicpreventionpolicy,andhighlightedthat
quarter-to-datedomestichotelandairbookingvolumein1Q23has
surpassedthe2019level.Drivenbythereleaseofpent-updemand,
improvementofmacro,andsteadydevelopmentofinternationalbusiness,we
forecastTCOMtorecordRMB3.0bnARrevenuein1Q23,flatcomparedto
1Q19level,andachieveRMB3.7bninTTrevenue,up11%comparedto
1Q19level.WeliftedTCOM’s2023Etotalrevenueforecastby11%to
RMB34.0bn,indicatingaYoYgrowthof69%,andwas95%of2019level.
Costcontrolmeasurescouldaidrapidmarginrecoverywhenrevenue
recovers.TCOM’snon-GAAPOPMfor4Q22was1.4%,4.5ppbetterthan
ourforecast,mainlyonbetter-than-expectedcostsaving.TCOMhasadopted
stringentcostreductionandsavingmeasuresamidindustryheadwind,which
shouldaidstrongmarginexpansionwhenrevenuegenerationnormalizes.
Recoveryinrevenuegenerationfromrelativehigh-marginoutboundtravel
businesscouldaidfurthermarginrecovery.Weforecastnon-GAAPOPMto
expandto19.0%in1Q23E(1Q19:16.8%;1Q22:-3.3%),andestimateitto
recoverto19.2%in2023E(2019:18.9%;2022:6.4%).