Daiwa Capital Markets: Trip.com’s performance last quarter exceeded expectations, and this year's growth outlook is expected to be stable

Daiwa Capital Markets published a research report stating that Trip.com (09961.HK) exceeded expectations in its fourth-quarter performance last year, with net revenue growing 20.8% year-on-year, 4% higher than the firm's and market expectations. Non-GAAP net profit increased by 14.7% year-on-year, exceeding the firm's and market expectations by 6% to 8%, while the non-GAAP net profit margin narrowed by 1 percentage point to 22.6%. Management guided that revenue for the first quarter of this year is expected to grow by 14% to 15% year-on-year to RMB 15.9 billion, in line with market expectations.

The firm believes that Trip.com is working to narrow the losses in its international business and is confident in a robust growth outlook for 2026. Considering that the continued expansion of the international business will require capital investment, Daiwa Capital Markets has raised its revenue forecast for Trip.com for the first quarter by 1%, maintained its full-year revenue forecast unchanged, and lowered its profit forecasts for the first quarter and the full year by 10% and 4%, respectively, maintaining a "Buy" rating, with the target price for Hong Kong stocks lowered to HKD 624, and the target price for Trip.com (TCOM.US) in the U.S. stock market lowered to USD 79