HK Stock Market Move | TRIP.COM-S(09961) fell more than 4% as Morgan Stanley pointed out that its revenue guidance was in line with expectations but profit margin was weaker.

TRIP.COM-S (09961) fell more than 4%, dropping 4.2% to HK$456.2 as of the time of writing, with a trading volume of HK$16.31 billion. On the news front, Citigroup released a research report stating that Ctrip Group's revenue in the last quarter increased by 23% year-on-year, which was 3.6% higher than Citigroup's expectations. The company's gross profit margin in the last quarter was 79.3%, slightly lower than Citigroup's forecast of 80.5%; non-GAAP operating profit margin was 21.6%, in line with the bank's expectation of 21.5%, but lower than some investors' forecasts. Zhongtai Leong also stated that Ctrip Group's strong performance in the fourth quarter of 2024 mainly came from the recovery of domestic and outbound travel, as well as the accelerated growth of international market share. However, the increase in overseas market and promotion expenses due to the surge in user base led to a 4-percentage-point decrease in gross profit margin year-on-year. The decline in domestic hotel and international airfare prices, as well as aggressive global expansion, may continue to be obstacles in 2025. Morgan Stanley stated that the company's revenue guidance is in line with expectations, but profit margins seem weak. The management guided for a 14-15% year-on-year increase in revenue for the first quarter of this year and the fiscal year 2025, which is roughly in line with the bank's previous expectations. However, non-GAAP operating profit margin may be maintained at 27-28%, lower than the same period last year and below the bank's expectations, mainly due to continued increase in overseas sales and marketing investments to expand the user base in overseas markets, as well as portfolio changes. In other words, the non-GAAP annual operating profit margin growth for the full year of 2025 is only about 5%, lower than the market's expectations of 12-13%.