Trip.com's second-quarter profit exceeded expectations, surging by over 40%. Strong travel demand led to a nearly 4% increase in after-hours trading | Financial Report Insights
In the second quarter, Trip.com saw double-digit growth in both profit and revenue, with revenue exceeding expectations by 14% and EPS increasing by nearly 42%. Domestic website accommodation bookings grew by 20%, while outbound hotel and flight bookings fully recovered to pre-2019 pandemic levels. International platform total revenue increased by 70%
In the second quarter, Trip.com continued to receive strong support from travel demand, maintaining double-digit revenue growth, with international business showing strong growth, reflecting the resilience of travel consumption.
After the U.S. stock market closed on Monday, August 26th, Trip.com announced its unaudited financial data for the second quarter and first half of this year.
1) Key Financial Data:
Revenue: Trip.com's total revenue for the first half of the year was RMB 24.709 billion, a year-on-year increase of 20.7%. The total revenue for the second quarter was RMB 12.79 billion (approximately USD 1.76 billion), a year-on-year increase of 14%, in line with analysts' expectations of RMB 12.75 billion.
EPS: The adjusted earnings per ADS for the first half of the year were RMB 13.24, a year-on-year increase of 61.5%. For the second quarter, it was RMB 7.25, a year-on-year increase of approximately 41.8%, exceeding analysts' expectations of RMB 5.22.
Gross Profit: The gross profit for the first half of the year was RMB 20.721 billion, a year-on-year increase of 19.8%. The gross profit for the second quarter was RMB 10.46 billion, a year-on-year increase of 13%, meeting analysts' expectations.
2) Segment Data:
Hotel Reservations: Revenue from hotel reservations in the second quarter was RMB 5.14 billion (approximately USD 707 million), a 20% year-on-year increase, slightly exceeding analysts' expectations of RMB 4.95 billion.
Transportation Tickets: Revenue from transportation tickets in the second quarter was RMB 4.871 billion, a 1.2% year-on-year increase, slightly below analysts' expectations of RMB 4.97 billion.
Tourism and Vacation: Revenue from tourism and vacation in the second quarter was RMB 1.025 billion, a 42% year-on-year increase, slightly exceeding analysts' expectations of RMB 1.02 billion.
Business Travel: Revenue from business travel in the second quarter was RMB 633 million, an 8.4% year-on-year increase, slightly below analysts' expectations of RMB 634.5 million.
After the financial report was released, Trip.com's U.S.-listed Chinese stocks rose nearly 0.4% on Monday, with accelerated gains in after-hours trading, reaching nearly 4% at one point before narrowing to within 3%.
The financial data shows that in the first two quarters of this year, Trip.com's total revenue for each quarter exceeded expectations by double digits, with the growth rate in the second quarter slowing compared to the first quarter on a high base, still achieving steady growth.
Among the main businesses, revenue from hotel reservations in both the first and second quarters grew by at least 20% each quarter. The year-on-year growth rate for tourism and vacation in the second quarter slowed significantly to 129% compared to the first quarter. Trip.com stated that hotel reservations and tourism and vacation businesses were mainly driven by travel demand, especially during holiday periods.
The growth rate for transportation tickets in the second quarter not only slowed down from 20% in the first quarter but also fell more than analysts' expectations. Trip.com mentioned that this business in the second quarter was mainly affected by fluctuations in air ticket prices Ctrip stated that both domestic and international businesses maintained growth in the second quarter. Specifically, accommodation bookings on Ctrip's domestic website increased by about 20% year-on-year, benefiting from strong growth in domestic and outbound tourism. Cross-border travel drove rapid growth in Ctrip's outbound, inbound, and overseas platform businesses.
In the second quarter, Ctrip's outbound hotel and flight bookings have fully recovered to pre-pandemic levels in 2019, with international flight capacity recovery exceeding 70% of the industry average.
International business saw significant growth, with Ctrip's international OTA platform Trip.com's total revenue increasing by about 70% year-on-year, and by about 80% in the first quarter.
Ctrip's co-founder and chairman of the board, Liang Jianzhang, stated: "Amid strong growth in travel demand, especially cross-border travel demand, we achieved sustained growth in the second quarter of 2024. This strong performance demonstrates our adaptability in dynamic markets. Looking ahead, we will spare no effort to innovate in the tourism industry using artificial intelligence (AI) to create exceptional value experiences for customers."
During the financial report meeting, Ctrip applied AI Agent for the first time in the industry, showcasing the company's commitment to innovation and the adoption of new technologies to drive transformation in the tourism industry. Specific outcomes of AI implementation were introduced, including two content products.
Ctrip CEO Sun Jie said: "We are pleased to see the strong growth and resilience in Chinese tourism consumption. This optimistic outlook inspires our enthusiasm for innovation and new initiatives. Through collaboration with partners, we are capable of achieving greater success."