Summary of second quarter 2017 results:

Net income in the second quarter of 2017 was 6.4 billion yuan, up 45 per cent from a year earlier.

Gross profit margin in the second quarter of 2017 was 82 per cent, up from 72 per cent in the same period in 2016 and 80 per cent in the previous quarter, mainly due to rising efficiency.

Operating profit margin was 10% in the second quarter of 2017. Excluding equity compensation fees, non-GAAP operating profit margins were 18 per cent in the second quarter of 2017, up from 4 per cent in the same period last year, mainly due to the overall improvement in operational efficiency. and the synergy between Trip.com and the companies he invested in.

Financial results and business development in the second quarter of 2017

Trip.com 's net operating income was 6.4 billion yuan ($946m) in the second quarter of 2017, up 45 per cent from a year earlier. Net operating income increased by 5% in the second quarter of 2017 compared with the previous quarter.

Revenue from accommodation bookings in the second quarter of 2017 was 2.3 billion yuan ($341 million), an increase of 30% over the same period last year, mainly due to the increase in accommodation bookings. Business revenue from accommodation booking increased by 12% in the second quarter of 2017 compared with the previous quarter, mainly affected by seasonal factors.

Ticketing revenue in the second quarter of 2017 was 3 billion yuan ($441 million), an increase of 49 percent over the same period last year, mainly due to the increase in ticket bookings and the financial performance of the consolidated Skytour since December 31, 2016. Traffic ticketing revenue increased by 4% month-on-month in the second quarter of 2017, mainly affected by seasonal factors.

Revenue from travel and vacation business in the second quarter of 2017 was 612 million yuan ($90 million), an increase of 29% over the same period last year, mainly due to the growth of group travel and individual travel. Business revenue from tourism and vacation business fell 13% in the second quarter of 2017 from the previous quarter, mainly due to the seasonal factors brought about by the Spring Festival in the first quarter.

Business revenue from business travel management business in the second quarter of 2017 was 199 million yuan (US $29 million), an increase of 36% over the same period last year, mainly due to the expansion of travel product coverage. Business income from business travel management business increased by 38% in the second quarter of 2017 compared with the previous quarter, mainly affected by seasonal factors.

The gross margin in the second quarter of 2017 was 82 per cent, compared with 72 per cent in the same period in 2016 and 80 per cent in the previous quarter.

The cost of product development in the second quarter of 2017 was 2 billion yuan (US $300 million), an increase of 18% over the same period last year, mainly due to the increase in fees related to product developers. Product development expenses increased by 4% in the second quarter of 2017 compared with the same period last year. Product development expenses accounted for 32% of net operating income in the second quarter of 2017. Excluding equity compensation fees, product development expenses accounted for 27 per cent of net operating income in the second quarter of 2017, down from 31 per cent in the same period in 2016 and 28 per cent in the previous quarter.

Sales and marketing expenses in the second quarter of 2017 were 2 billion yuan ($295 million), up 49% from a year earlier, mainly due to an increase in marketing-related activities. Sales and marketing fees increased by 6% in the second quarter of 2017 compared with the previous quarter. Sales and marketing expenses accounted for 31% of net operating income in the second quarter of 2017. Excluding equity compensation fees, sales and marketing expenses accounted for 30 per cent of net operating income in the second quarter of 2017, up from 29 per cent in the same period in 2016 and unchanged from the previous quarter.

Management expenses in the second quarter of 2017 were 608 million yuan (US $90 million), an increase of 19% over the same period last year, mainly due to the increase in management-related fees and consulting fees. Administrative expenses fell by 5% in the second quarter of 2017 compared with the previous quarter. Administrative expenses accounted for 9% of net operating income in the second quarter of 2017. Excluding equity compensation fees, management fees accounted for 7 per cent of net operating income in the second quarter of 2017, down from 8 per cent in the same period in 2016 and unchanged from the previous quarter.

Operating income in the second quarter of 2017 was Rmb645m ($95 million), compared with an operating loss of Rmb396m in the same period in 2016 and Rmb400m in revenue in the previous quarter. Excluding equity compensation fees, operating profit in the second quarter of 2017 was 1.2 billion yuan ($173 million), compared with 182 million yuan in the same period in 2016 and 936 million yuan in the previous quarter.

Operating margin in the second quarter of 2017 was 10 per cent, compared with 9 per cent in the same period in 2016 and 7 per cent in the previous quarter. Excluding equity compensation fees, operating profit margin in the second quarter of 2017 was 18 per cent, compared with 4 per cent in the same period in 2016 and 15 per cent in the previous quarter.

Income tax expenses in the second quarter of 2017 were 529 million yuan ($78 million), compared with 53 million yuan in the same period in 2016 and 148 million yuan in the previous quarter. The change in the Group's effective income tax rate is mainly due to the investment income recognized in the quarter and some non-taxable deductible losses.

The net profit attributable to Trip.com shareholders in the second quarter of 2017 was 327 million yuan ($48 million), compared with a net loss of 521 million yuan in the same period in 2016 and 82 million yuan in the previous quarter. Mainly benefited from the recognized investment income.

Profit per diluted depositary receipt was 0.59 yuan (US $0.09) in the second quarter of 2017. Excluding equity compensation fees, earnings per diluted depositary receipt in the second quarter of 2017 were 1.49 yuan ($0.22).

As of June 30, 2017, the balance of cash and short-term investment was 42 billion yuan (US $6 billion).

Performance outlook

Trip.com expects net operating income to grow at an annual rate of about 3540 per cent in the third quarter of 2017. The forecast reflects Trip.com 's preliminary judgment based on the current situation and is likely to be adjusted.

Teleconferencing

Trip.com management will hold a conference call at 8:00PM (Beijing time zone 8:00AM) on August 30th, 2017 after the announcement.

The conference call will be broadcast live and replayed on the Internet (http://ir.ctrip.com). The meeting will be archived on the above website for 12 months.

The number of the telephone dial-up to listen to the live conference call: the toll-free number of the United States + 1.800.219.3192, the international dial-in number is + 1.617.597.5412, and the password is 7377521. To make an appointment in advance, please click on the following URL:

Https://www.theconferencingservice.com/prereg/key.process?key=PCRWE6WB

The replay will be available over the phone after the conference call until September 6, 2017. The number of dial-up to listen to the replay of the conference call: American toll-free number + 1.888.286.8010, international phone + 1.617.801.6888, password 95039104.