Trip.com issued a 2022Q1 performance announcement, the performance is better than the market consensus. The operating income of 1Q22 Trip.com is 4.11 billion yuan, which is basically the same as that of 1Q21, which is 12% lower than that of 4Q21. Compared with 1Q19, it is down 50%. The net profit of nonmurGAAP is-36 million yuan and the profit margin is-0.9%.
The proportion of 1Q22 transportation and ticketing business in the revenue structure is the first time since 2Q20 to replace the hotel business. 1Q22 revenue from the transport and ticketing business rose 10 per cent year-on-year to 1.66 billion yuan, mainly driven by overseas ticketing. With the opening of borders in Europe and the Asia-Pacific region, the overall booking of overseas air tickets (including cross-border + overseas and local) increased by 270 per cent compared with the same period last year. Other core businesses were all negative year-on-year growth: accommodation revenue fell 8 per cent to 1.45 billion yuan, tourism vacation revenue fell 27 per cent to 120 million yuan, and business travel services 1Q22 fell 12 per cent year-on-year to 220 million yuan. Other businesses rose 8 per cent year-on-year to 650 million yuan, benefiting from overseas advertising revenue and financial business growth.
All the expenses of 1Q22 are strictly controlled, and all of them have contracted greatly. Various rates show a trend of flat or slight decline, and the company has the advantage of reducing cost and increasing efficiency and storing ammunition.
Profit forecast and investment advice: with the strong demand for short trips, with the gradual unblocking of domestic and cross-border epidemic prevention policies (the ninth edition of the prevention and control plan shortens the time for tight connection and entry isolation, and measures such as the cancellation of travel cards and stars by the Ministry of Industry and Information Technology define the direction of prevention and control policy. Trip.com 's leading long-distance travel business is expected to pick up quickly. It is estimated that the income of Trip.com from 2022 to 2024 will be 287 / 37.4 billion yuan respectively, and the net profit of non-GAAP will be 7.881 million yuan respectively. The company is valued at 25X PE in 2023, with a fair value of US $33.74 / ADS for US stocks and HK $262.82 per share for Hong Kong stocks. Both US stocks and Hong Kong stocks maintain a "buy" rating.
Risk hints: the risk of ADR delisting; uncertainty in the development of the epidemic, strict control of the epidemic; intensified competition in the domestic OTA industry, affecting profit performance.
(except for special instructions, RMB is used as the monetary unit in this article)