【行业研究报告】携程-Looking beyond release of pent-up demand to globalization

22May2024CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdateTrip.com(TCOMUS)Lookingbeyondreleaseofpent-updemandtoglobalizationTrip.comGroup(TCOM)released(21May)1Q24results:netrevenuewasRMB11.9bn,up29.4%YoY,3%aheadofbothourforecastandBloombergconsensusestimates,aidedbybetter-than-expectedrevenuegenerationfrombothaccommodationreservationandOtherssegments.Non-GAAPoperatingincome(OP)wasRMB3.8bn,betterthanourforecast/consensusatRMB3.2/3.1bn,thankstoabetter-than-expectedGPMaidedbybetter-than-expectedscaleeffect,andbetter-than-expectedmarketingspenddrivenbyastringentROItarget.Althoughthestrongreleaseofpent-updemandintravelindustryhasbeenlargelypricedin,wesuggestinvestorslookbeyondpent-updemandtoTCOM’sglobalizationpotential.Aidedbyitsone-stopshopbusinessmodel,strongmobileappexperience,superiorcustomerservicescapabilityandcontinuouslyenhancedsupplychain,TCOMiswellpositionedtotapintotheunderpenetratedonlinetravelmarketinotherAsiamarkets,inourview.Toaccountforthebetter-than-expectedearningsin1QandTCOM’scontinuouslyenhancedglobalexpansionprospects,weliftourDCF-basedTPtoUS$65.8(wasUS$49.0),translatinginto24/20x2024/25EPE(non-GAAP).BUY.Solid2Qbookingsgrowthtrajectoryalbeitonhighbase.ManagementhighlightedthatbusinessgrowthonitsplatformremainssolidQTDin2Q24:highlightedthatbusinessgrowthonitsplatformremainssolidQTDin2Q24:1)TCOM’sdomestictravelbookingsachieveddouble-digitgrowthYoY,ascomparedtoaroughlyon-parYoYflightpassengervolumeforoverallindustry;2)overallinternationalflightcapacityreboundedto70%ofpre-pandemiclevelin1Q24,whileTCOMconsistentlyoutpacedtheindustryby20-30%;3)Trip.complatformsustainedrobustrevenuegrowthathighdouble-digitpercentagerange(1Q24:80%YOY),drivenbystrongbookingsgrowthintheinternationalmarket.For2Q24E,weestimateTCOMtorecordrevenueofRMB12.9bn,up15%YoY.Internationalexpansiontosupportlong-termrevenueandearningsgrowth.Managementhighlightedthatthetotaladdressablemarket(TAM)oftravelmarketinAsiais1.5xthatofChinabutwithsignificantlyloweronlinepenetration.ThecompanywillfocusonthedevelopedmarketinAsiafirst,leveragingitsone-stopshopbusinessmodel,goodmobileexperience,andsuperiorcustomerservicestorideonthetideofapotentialincreaseinonlinepenetration,anddrivemarketsharegains.Managementtargetsa20%revenuecontributionfrompureinternationalbusinessovera3-5years’horizon,andabetter-than-domesticbusiness’OPMprofileatsteadystategivenhigherAOVforinternationalhotelsandhighertakerateforinternationalticketingbusiness.Also,theramp-upofinboundtravelrevenue,whichaccountedforc.20%ofTrip.comrevenueandc.2%ofTCOMGrouprevenuein1Q24,willlikelyprovideadditionalsupportforrevenuegrowth.Moreefficient-than-expectedsalesandmarketingspenddroveabeatonOPM.TCOM’snon-GAAPOPMfor1Q24was31.6%,4.4pptbetterthanourforecast,aidedby1.9pptbeatonGPMand2.9pptbeatonS&Mexpenseratio,thankstomoredisciplinedspendthanweexpected.ManagementwillmaintainefficientsalesandmarketingspendwithafocusonROI,aswellassolidrevenuegrowth,whichinourviewshouldhelpmaintainastablenon-GAAPOPMdespiteahighbase.Weforecastnon-GAAPOPMtoexpandto30.0%in2024E(2023:29.6%).For2Q24E,weestimatenon-GAAPOPofRMB4.0bn,translatinginto30.9%non-GAAPOPM,flatYoY.