Trip.com Group Limited (TCOM) Likely to Benefit From Resuming Travel in China - Morgan Stanley

Morgan Stanley analyst Alex Poon reiterated an Overweight rating and $35.00 price target on Trip.com Group Limited (NASDAQ: TCOM) noting that the reopening of quarantine-free travel in China should serve as a catalyst for the stock.

The analyst stated "Assuming 20-50% recovery in China outbound travel to HK in 2022, this will lift our 2021E group revenue by 4-9% and gross profit by 4-11% we estimate. Incremental marketing spending/COS should be minimal given recovery would be driven mainly by business travels, hence, the benefit to operating profit will be more significant. Yet, we note: 1) the reopening progress could be delayed if there is any local ovid-19 outbreak in HK; 2) many visitors from Guangdong could be day-trippers; 3) some business travel is replaced by virtual meetings; 4) positive earnings revision is unlikely due to Covid-19 affecting 4Q and consensus 2022e revenue of Rmb29bn and non-GAAP operating profit of Rmb4.7bn being ~80% and ~70% of
2019's level, respectively, not low, in our view, given 2021's tracking at 55% and ~0% of 2019 levels, respectively."

For an analyst ratings summary and ratings history on Trip.com Group Limited click here. For more ratings news on Trip.com Group Limited click here.

Shares of Trip.com Group Limited closed at $31.12 yesterday.

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