Trip.com-S Shares Rise Nearly 3% in Morning Trading; Citi Maintains "Buy" Rating

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Trip.com-S (09961) rose nearly 3% in morning trading. As of press time, the stock was up 2.35% at HK$313.60, with turnover of HK$212 million.

Citi released a research report stating that it expects Trip.com Group to announce its third-quarter results between mid-to-late November. The bank estimates that Trip.com's third-quarter total revenue will rise 3% year-on-year to RMB 18.9 billion, in line with market expectations; gross margin is expected to be 81.3%, adjusted operating margin is expected to be 31.4%, and adjusted profit is expected to be approximately RMB 5.3 billion, in line with market expectations.

The bank maintained its earnings forecasts for Trip.com from 2026 to 2028, kept its target price at US$61, maintained its "Buy" rating, and believes the worst period may have passed. Citi noted that although industry performance was relatively weak during the summer holidays and commission rates for domestic hotel and transportation businesses were affected, performance during the Mid-Autumn Festival and National Day Golden Week was solid, which is expected to support third-quarter revenue.

The bank believes that the market's focus for the earnings will be management's commentary on the outlook for domestic hotel commission rates and profit margins in the fourth quarter, as uncertainty remains regarding hotel operators' commission rates during the off-season.