Trip.com, the renowned Chinese travel operator, demonstrated impressive financial performance in the second quarter of 2024, significantly exceeding expectations. The company’s US-listed shares experienced a notable uptick early Tuesday, reflecting widespread investor enthusiasm as it showcased higher-than-anticipated earnings, fueled by an unwavering demand for both local and international travel.
In a statement released on Monday, Trip.com reported adjusted earnings of 7.25 renminbi ($1) per American depositary share for the June quarter, representing a substantial increase from the 5.11 renminbi recorded in the same period last year. Analysts had predicted a normalized EPS of 5.24 renminbi, thereby underscoring the company's effective operations and market responsiveness. Furthermore, net revenue surged by 14% year-over-year, reaching 12.77 billion renminbi.
Although this figure narrowly missed the market's expectation of 12.78 billion renminbi, it still reflects a solid growth trajectory. Executive Chairman James Liang elaborated on the findings, stating, "The second quarter of 2024 witnessed continued growth driven by strong travel demand, especially for cross-border travel.
Our strong performance highlights our adaptability in a dynamic market." In premarket trading, Trip.com’s Nasdaq-listed American depositary receipts saw a notable increase of approximately 9.5%, a testament to investor confidence following the earnings announcement. Breaking down revenue sources, the accommodation reservation segment showcased remarkable growth, advancing 20% year-over-year to 5.14 billion renminbi.
Additionally, transportation ticketing sales rose slightly to 4.87 billion renminbi, up from 4.81 billion renminbi in the corresponding quarter of the previous year. The packaged-tour division experienced an impressive 42% increase from last year, reaching 1.03 billion renminbi. Moreover, corporate travel revenue also saw an upward trend, climbing 8% to 633 million renminbi. The company revealed that accommodation bookings across its Chinese platforms escalated roughly 20% year-on-year.
As part of this positive trend, outbound hotel and air reservations have remarkably rebounded to 100% of pre-COVID levels. Chief Financial Officer Xiaofan Wang highlighted during a conference call, as noted in a Capital IQ transcript, that, "Domestic hotel bookings have also seen robust growth and have outpaced the industry, despite a tough comparison basis." Trip.com’s global online travel agency platform witnessed an astonishing 70% annual revenue increase, a clear indicator of the robust demand dynamics post-pandemic. Operating expenses did experience an increase, rising to 6.91 billion renminbi from 6.26 billion renminbi in the prior-year quarter; however, the financial outcomes were still overwhelmingly positive.
The CFO further remarked, "We are pleased to see that travel demand remains robust and that our company continues to perform well even in the face of challenging comparison baselines. As we look ahead, we are confident that 2024 will be another remarkable year for travel." The stock price at the end of this announcement was 46.19 renminbi, reflecting an increase of 3.85 renminbi and a percentage change of +9.09%.
This performance highlights Trip.com's resilience and strategic positioning in a rapidly evolving travel market, suggesting promising prospects for the remainder of the year..