Stock Analysis & Valuation Trip.com Group Limited (9961.HK)

• Previous Close: HK$481.80
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, HK$	Upside, %
Artificial intelligence (AI)	398.00	-17
Intrinsic value (DCF)	1537.81	219
Graham-Dodd Method	278.80	-42
Graham Formula	771.50	60

Strategic Investment Analysis

Company Overview

Trip.com Group Limited is a leading global travel service provider headquartered in Shanghai, China, operating prominent brands including Ctrip, Qunar, Trip.com, and Skyscanner. As one of Asia's largest online travel agencies, the company offers comprehensive travel services including accommodation reservations, transportation ticketing, packaged tours, corporate travel management, and destination services. Founded in 1999 and listed on the Hong Kong Stock Exchange, Trip.com has established itself as a dominant player in the Chinese travel market while expanding its international footprint. The company serves both leisure and business travelers through its integrated platform that combines hotel bookings, flight reservations, train tickets, travel insurance, and customized tour packages. With the travel industry experiencing strong post-pandemic recovery, particularly in the Asia-Pacific region, Trip.com is well-positioned to capitalize on growing travel demand. The company's multi-brand strategy allows it to target different market segments, from budget-conscious domestic travelers to international luxury tourists, making it a comprehensive solution in the consumer cyclical sector.

Investment Summary

Trip.com presents an attractive investment opportunity driven by its dominant position in the recovering Chinese travel market and improving financial metrics. The company generated HKD 53.3 billion in revenue with strong net income of HKD 17.1 billion, demonstrating operational efficiency and pricing power. With substantial cash reserves of HKD 48.4 billion and robust operating cash flow of HKD 19.6 billion, the company maintains financial flexibility for strategic investments and potential acquisitions. The beta of 0.027 indicates low volatility relative to the market, which may appeal to risk-conscious investors. However, investors should monitor the company's total debt of HKD 40.3 billion and exposure to regulatory changes in China's travel industry. The reinstated dividend of HKD 2.34 per share signals management's confidence in sustained profitability. The primary risks include economic sensitivity to consumer discretionary spending, intense competition in online travel, and potential travel restrictions affecting international operations.

Competitive Analysis

Trip.com Group maintains a strong competitive position through its scale advantages, multi-brand strategy, and deep integration within the Chinese travel ecosystem. The company's ownership of both Ctrip (premium market) and Qunar (value segment) allows it to capture different customer demographics while leveraging shared technology infrastructure. Its extensive supplier relationships with hotels, airlines, and local service providers create significant barriers to entry, particularly in the complex Chinese market where local knowledge and guanxi (relationships) are critical. The company's competitive advantage stems from its comprehensive product offering that spans the entire travel journey, from planning and booking to in-destination services and corporate travel management. However, Trip.com faces intensifying competition from both specialized platforms and super-apps expanding into travel services. The company's technology platform, which includes AI-powered recommendations and mobile optimization, provides a user experience advantage but requires continuous investment to maintain. Its international brands (Trip.com and Skyscracker) face established global competitors with stronger brand recognition outside Asia. The company's deep data insights from its massive user base enable personalized offerings but also create regulatory scrutiny regarding data privacy.

Major Competitors

• Trip.com Group Limited (TCOM): This is the same company with a dual listing structure. The NASDAQ-listed ADRs represent the same underlying business as 9961.HK, providing investors with alternative access points. The dual listing enhances liquidity and provides arbitrage opportunities between markets. Both listings have identical financial performance and operational characteristics.
• Expedia Group, Inc. (EXPE): Expedia is a global OTA giant with strong brand recognition in Western markets. Its strengths include extensive hotel inventory, Vrbo vacation rentals, and business travel solutions through Egencia. However, Expedia has limited penetration in the Chinese market where Trip.com dominates. Expedia's technology platform is sophisticated but faces challenges adapting to Asian consumer preferences and payment systems.
• Booking Holdings Inc. (BKNG): Booking Holdings operates Booking.com, Priceline, Agoda, and other travel brands with global reach. Its strengths include the world's largest accommodation inventory, strong international presence, and robust technology platform. However, the company faces regulatory challenges in China and has less dominance in the domestic Chinese market compared to Trip.com. Booking's Agoda brand competes directly with Trip.com in Asia but with varying market share by country.
• Airbnb, Inc. (ABNB): Airbnb revolutionized alternative accommodations with its peer-to-peer marketplace model. Its strengths include unique lodging options, strong brand identity, and experiences offerings. However, Airbnb has limited traditional hotel inventory and transportation services compared to Trip.com's comprehensive offering. In China, Airbnb faces localization challenges and stronger competition from domestic platforms, though it appeals to international travelers seeking alternative accommodations.
• Tongcheng Travel Holdings Limited (0690.HK): Tongcheng Travel is a major Chinese OTA with Tencent as a strategic investor, providing access to WeChat's massive user base. Its strengths include strong mobile penetration, competitive pricing, and integration with Tencent's ecosystem. However, it has less international presence and brand recognition compared to Trip.com. The company focuses more on the mass market while Trip.com has broader premium offerings and corporate travel services.
• Tripadvisor, Inc. (SUMM.L): Tripadvisor strengths include the world's largest travel review platform, strong brand recognition for travel research, and Viator experiences platform. However, its booking capabilities are less developed than Trip.com's integrated platform, and it has limited presence in the Chinese domestic market. Tripadvisor relies heavily on advertising revenue rather than transaction fees, creating a different business model focus.
• Naver Corporation (NAVER): Naver operates through its travel subsidiary, which includes various travel booking services integrated with its search platform. Its strengths include dominant market position in South Korea, search integration, and local market knowledge. However, Naver has limited international expansion beyond Northeast Asia and faces challenges competing with Trip.com's scale in the broader Asian market. The company's travel business is part of a larger internet conglomerate rather than a focused travel company.
• Ryanair Holdings plc (RYA.IR): Ryanair is Europe's largest airline by passenger numbers with a strong direct booking platform. Its strengths include ultra-low-cost operations, extensive European route network, and high direct booking percentage reducing OTA dependence. However, Ryanair operates only in the airline segment without the comprehensive travel services offered by Trip.com. The company's service is focused on point-to-point travel rather than integrated travel packages.