Nomura: TRIP.COM-S (09961) management guidance this year falls short of expectations

Nomura has released a research report stating that after TRIP.COM-S (09961) (TCOM.US) announced its performance last year, the stock price came under pressure today, dropping to a low of HK$459.4 at one point, a decrease of 12.4%. The latest report is HK$467, down 10.9%, with a turnover of HK$3.596 billion, making it the largest blue-chip stock in terms of decline. The bank pointed out that Trip.com Group Ltd. Sponsored ADR gave a guidance for this year's management that is lower than market expectations, with a non-GAAP operating gross margin guidance of about 28%, lower than the market's general expectation of 28.5%. Nomura stated that Trip.com Group Ltd. Sponsored ADR's performance in the fourth quarter of last year exceeded expectations, with revenue increasing by 23% year-on-year to 12.7 billion yuan, surpassing market consensus and the bank's expectations by 3% and 4% respectively. Due to strong revenue growth, its non-GAAP operating profit margin for the fourth quarter of 2024 decreased by 4 percentage points to 21.7% year-on-year, higher than market estimates and the bank's original expectations of 17.8% and 21.4%. The bank pointed out that Trip.com Group Ltd. Sponsored ADR's guidance for revenue growth in the fiscal year 2025 is expected to increase by 14 to 15% year-on-year, with the median of this range (14.5%) lower than the market consensus forecast of 15.7%. The company also expects a non-GAAP operating gross margin of about 28%, lower than the market's initial expectation of 28.5%. For the first quarter of this year, Trip.com Group Ltd. Sponsored ADR expects revenue to increase by 14 to 19% year-on-year, with the median of this range (16.5%) roughly in line with the market consensus of 16.3%. However, the company expects the non-GAAP operating profit margin for the first quarter of 2025 to be 27.5%, lower than the market's expectation of 28.6%.