By Tracy Qu
Trip.com shares climbed in early Hong Kong trading after the travel company beat earnings expectations on higher China hotel bookings and the postpandemic recovery in air travel.
Shares rose 5.0% to 348.00 Hong Kong dollars at midday Thursday, outperforming the Hang Seng Index’s 0.15% increase. That gain took this year’s advance to 25%.
The online travel company said ahead of trading that fourth-quarter sales more than doubled from a year earlier, helped by a 130% rise in China hotel reservations along with outbound hotel and air reservations that recovered to more than 80% of pre-Covid levels. A top line of 10.3 billion yuan (US$1.43 billion) beat a FactSet-compiled consensus estimate for CNY10.2 billion.
Net profit fell 37% to CNY1.30 billion, partly due to changes in investment valuations and share-based compensation charges, but still beat estimates for CNY1.00 billion. Income from operations swung to a profit from a loss a year ago.
Citi analysts described the earnings as a “solid beat,” with margin “likely ahead of investor expectations.” They kept a buy rating, adding that Lunar New Year travel appeared “decent…despite macro softness.”
Jefferies analysts Thomas Chong and Zoey Zong said revenue and operating profit exceeded expectations. They have a buy rating and a HK$453.00 target price on shares.
Write to Tracy Qu at [email protected]