【行业研究报告】携程-Resilient revenue growth with investment on track for overseas expansion

21May2025CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdateTrip.com(TCOMUS)ResilientrevenuegrowthwithinvestmentontrackforoverseasexpansionTrip.comGroup(TCOM)released(20May)1Q25results:totalrevenuewasRMB13.9bn,up16%YoY,inlinewithbothourforecastandBloombergconsensusestimates;non-GAAPoperatingincome(OP)wasRMB4.0bn,7%betterthanbothourestimatesandconsensus,mainlythankstomoreoptimized-than-expectedsalesandmarketingspend.Overalltraveldemandremainsresilient,inourview,andTCOMsustainedbetter-than-industrybookingvolumegrowthforbothdomesticbusinessandoutboundbusiness,aidedbyitsstrongsupplychaincapabilities,aswellassuperiorcustomerservicescapabilities.TCOM’soverseasexpansionisalsoontherighttrack.Althoughtheinvestmentmayweighonearningsgrowthinthenearterm,theinternationalexpansionshouldbringlong-termvaluetoTCOM,inourview.Bothour25-27Erevenueandearningsforecastsremainlargelyunchanged,andwekeepourDCF-basedTPatUS$70.0,translatinginto20x25EPE(non-GAAP).BUY.Expectingresilientrevenuegrowthin2Q25E.Fordomesticbusiness,managementnotedresilientbookingvolumegrowthQTDin2Q25,withmanagementnotedresilientbookingvolumegrowthQTDin2Q25,withhotelbookingvolumegrowthstandingatc.10-15%YoY,andtransportationticketingvolumegrowthstandingatmid-to-lowsingledigitYoY.ManagementalsonotedanimprovingtrendintheYoYdeclineofaveragedailyrate(ADR)fromhighsingledigitin1Qtomid-to-lowsingledigitrangein2Qfordomesticaccommodationreservations.OutboundairticketandhotelbookingsonTCOM’splatformrecoveredtomorethan120%ofthe2019levelin1Q25(4Q24:~120%;1Q24:~90%),consistentlyoutperformingtheoverallmarketbyc.30-40ppts.Thetrendcouldsustainin2Q25,inourview,whilerevenuegrowthofthebusinesscloudseetoughercompsin2H25.Forpureinternationalbusiness,Trip.comaccountedfor13%ofgroup-levelrevenuein1Q25,andsustainedover50%YoYrevenuegrowth.WearelookingforaslightaccelerationtrendforTrip.com’srevenuegrowthin2H25givenbetterseasonalityinoverseasmarkets,andTCOM’sincrementalinvestmenttodrivegrowth.For2Q25E,wearelookingforasequentiallyresilientrevenuegrowthof15%YoY,withtotalrevenuetoreachRMB14.6bn,inlinewithBloombergconsensus.IncrementalinvestmentinTrip.comlikelytobringshort-termmarginheadwindbutshouldbenefitthelongterm.TCOM’snon-GAAPOPMfor1Q25was29.2%,1.7pptsbetterthanconsensus,mainlydrivenbymoreoptimized-than-expectedsalesandmarketingspend,althoughthiswasagainpartlyoffsetbylower-than-expectedGPMowingtoincreasedrevenuecontributionfromTrip.com.Non-GAAPoperatingexpensesasapercentageoftotalrevenuewas51.2%in1Q25,betterthanconsensusat53.5%,whiletheGPMof80.3%was0.7pptsshyofconsensus.WeexpectTCOMtomaintainitsinvestmentplantoachieveinternationalexpansionoftheTrip.complatform.ContributionmarginforrelativelymaturemarketssuchasHongKongandSingaporeshouldcontinuetoseemarginimprovement,whilefast-growingmarketssuchasJapan,Malaysia,andThailandareaimingatmarketshareexpansion,andnewmarketssuchastheMiddleEastandEuropeanregionsaremakingsomeearly-stageinfrastructureinvestment.AlthoughincrementalinvestmentinTrip.commayweighonnear-termearningsgrowth,wearepositiveonthelong-termbenefits.For2Q25E/2025E,wearelookingfornon-GAAPOPofRMB4.4bn/18.0bn,up3/11%YoY.