CICC has released a research report maintaining its revenue forecasts for TRIP.COM-S (09961, TCOM.US) for fiscal years 2025/2026. Given better-than-expected marketing expense control, the firm raised its 2025 non-GAAP net profit forecast by 8% to 17.7 billion yuan while maintaining its 2026 non-GAAP net profit forecast at 18.9 billion yuan. CICC maintains its outperform rating and switches to 2026 PE valuation methodology (using 26x PE multiple), maintaining target prices of $75.9 for US shares and HK$588.5 for Hong Kong shares. This corresponds to 2025/2026 non-GAAP P/E ratios of 21x and 20x for both US and Hong Kong shares, representing 16% and 15% upside potential respectively from current share prices. The company currently trades at 2025/2026 non-GAAP P/E ratios of 18x and 17x for both US and Hong Kong shares.

CICC's main viewpoints are as follows:

**2Q25 Non-GAAP Net Profit Exceeds Consensus Expectations**

The company announced 2Q25 results: revenue increased 16% year-over-year to 14.9 billion yuan, exceeding market expectations by 1%, primarily driven by better-than-expected accommodation revenue. Non-GAAP net profit reached 5.0 billion yuan (34% net profit margin), surpassing market expectations by 15%, mainly due to controlled marketing expenses and above-expected government subsidies and other income. The company's $400 million shareholder return program announced at the beginning of the year was completed ahead of schedule, and a new share repurchase program of up to $5 billion was approved in August 2025.

**Summer Domestic Hotel Booking Growth Outpaces Industry**

1) Domestic Hotels: 2Q25 accommodation booking revenue reached 6.2 billion yuan, up 21% year-over-year, exceeding market expectations by 3%, primarily due to better-than-expected hotel booking volume growth. Despite lackluster industry performance during summer, Trip.com's room-night performance outpaced the industry during the summer period. CICC expects the company's domestic hotel room-nights to maintain low double-digit year-over-year growth in 3Q25.

2) Domestic Transportation: Due to base effects, the aviation industry showed weak performance during summer. According to flight management data, national civil aviation passenger volume grew 3% year-over-year from July 1 to August 25, 2025. The company expects 3Q25 flight booking and revenue growth to be similar to industry trends.

**Outbound Tourism Maintains Resilience**

In 2Q25, the company's outbound flight and hotel bookings recovered to over 120% of 2019 levels, continuing to outperform the industry's 84% flight capacity recovery rate. Considering the high base from last year's summer outbound tourism, the company expects outbound revenue year-over-year growth to slow slightly. CICC expects 3Q25 outbound flight and hotel volumes to grow 15-20% year-over-year, with outbound hotel prices remaining stable, while flight prices still face high single-digit year-over-year declines.

**Trip.com Maintains Rapid Growth with Controllable Competition Pressure**

2Q international OTA booking volume increased over 60% year-over-year, with Trip.com's share of group revenue rising to 14%. Inbound tourism bookings grew over 100% year-over-year. Although international giants have increased hotel price subsidies in Thailand and South Korea, the overall Asia-Pacific market remains fragmented, and Trip.com's differentiated strategy has been effectively executed. Trip.com's hotel revenue continues to maintain over 70% growth without significant impact. According to Sensor Tower data, CICC observed that Trip.com's MAU continued to maintain 55% year-over-year growth in July. In addition to continued investment in the Asia-Pacific region, the company is also accelerating expansion in the Middle East. CICC expects Trip.com to maintain over 50% year-over-year growth in 3Q25.