On June 25, Trip.com fell 14.06% in regular trading, trading at $38.07/share, with turnover of approximately $103 million. The sharp decline was triggered by the company's Q1 earnings report revealing a significant profit miss and materially weaker-than-expected forward guidance.

Trip.com reported Q1 revenue of RMB 16.2 billion, up 17% year-over-year and slightly above the market consensus of RMB 15.84 billion. However, net income attributable to shareholders came in at only RMB 2.499 billion, plunging 41.57% year-over-year. Adjusted earnings per ADS were RMB 5.73, missing the consensus estimate of RMB 6.09. By segment, accommodation booking revenue grew 17%, transportation ticketing rose 12%, vacation travel increased 19%, and corporate travel management gained 20%.

More critically, management guided Q2 net revenue growth to decelerate sharply to just 3%-8% year-over-year, potentially marking the slowest quarterly growth in four years. The company cited high energy prices, geopolitical volatility, and business rectification measures following a regulatory investigation by the State Administration for Market Regulation as key headwinds. Citigroup noted investors should monitor the investigation's progress and the impact of hotel tier rectification on the company's long-term fundamentals.

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