Daiwa has released a research report expressing a constructive view on the long-term prospects of TRIP.COM-S (09961) following its second-quarter earnings release for this year. The brokerage firm believes the international business is emerging as a new growth engine and is encouraged by management's acceleration of share buyback execution. With the stock trading at a 12-month forward price-to-earnings ratio of 11.7 times—approximately 40% below the three-year average of 19.8 times—Daiwa views the risk-reward profile as attractive.

The firm reaffirms its "Buy" rating with a 12-month target price of HK$508 for TRIP.COM-S (09961). The report highlights that the company's second-quarter results showed total revenue of RMB 15.663 billion, representing a year-on-year increase of 5.5%, with adjusted operating income of RMB 4.365 billion and adjusted net profit of RMB 4.798 billion.

On a separate note, the international OTA platform experienced revenue growth exceeding 50% year-on-year in the second quarter, contributing approximately 20% of total revenue. Inbound tourism revenue also recorded high double-digit growth year-on-year, and management indicated that the contribution margin for Trip.com has turned positive.

Looking ahead, Daiwa projects third-quarter total revenue to grow 2% year-on-year to RMB 18.8 billion, with an adjusted operating margin of 31%. The firm also anticipates continued share count reduction in the second half of the year, which should provide downside support for the stock price.