HSBC Equity Snap: Trip.com Group (TCOM.US) Softer 2Q Guidance
Summaries are public. PDF access requires an active membership; all members have the same access. Sign in
HSBC maintains its Buy rating on Trip.com Group but lowers the target price from USD 65 to USD 60, based on 18x 2026 price-to-earnings. The adjustment follows softer-than-expected second-quarter guidance, with management projecting revenue growth of only 10-12%, below the market consensus of approximately 15%.
First-quarter revenue grew 18% year over year, broadly meeting expectations, though the net margin came in slightly below forecast. Domestic hotel booking growth decelerated to 12% due to a high base and intensifying competition. Outbound travel bookings recovered to 80% of 2019 levels, falling short of the prior 85% expectation. Air ticketing revenue grew 15%, marginally below the 17% forecast.
Management expects a second-half recovery above 15% growth, contingent on macroeconomic conditions and visa policies. Competitive pressure is rising, with Meituan and Douyin increasing subsidies in the budget hotel segment, though Trip.com retains its competitive moat in the mid-to-high-end market.
HSBC trimmed its 2026 revenue forecast by 2% to reflect the soft second-quarter outlook. Despite short-term headwinds from slower outbound travel recovery and domestic price competition, the firm views current valuations as attractive given Trip.com's long-term supply chain integration advantages and increasing travel penetration.