Trip.Com sinks after Chinese travel agency’s second-quarter revenue tumbles as revenue tumbles
(Yicai Global) Sept. 22 — Despite posting a profit and predicting “healthy” third-quarter revenue growth, shares of Trip.Com Group fell after China’s largest online travel agency announced a 32% drop in revenue in the second quarter.
Trip.com [HKG: 9961] ended down 4.5% at 196.70 HKD ($25.06) in Hong Kong today, after plunging 7.9% earlier. Its shares listed in New York [NASDAQ: TCOM] fell 8.5% to end at $24.43 each yesterday.
Revenue was CNY4 billion ($565 million) in the three months to June 30, the Shanghai-based owner of the Qunar and Skyscanner brands said in its latest earnings report released yesterday. Net profit was CNY43 million (US$6 million), compared with a net loss of CNY659 million (US$84 million) a year earlier and CNY1 billion (US$141 million) in the first quarter.
“As the sporadic resurgence of Covid continues to disrupt the resumption of domestic travel in China,” co-founder and executive chairman James Liang said on an earnings conference call later, “we are encouraged to see the strong release of pent-up demand in the return half of this quarter.
Domestic travel was weak in April and May, but recovered quickly in June due to changes in the coronavirus situation. Staycations remained a major contributor to the Chinese market recovery, with local hotel bookings jumping more than 30% compared to the same period of 2019.
“We expect healthy revenue growth in the third quarter on an annual basis, which is driven by strong demand for summer travel in China and a robust recovery in the global market,” Chief Financial Officer Cindy Wang said during the meeting. ‘call.
The company’s hotel booking business in south and west China, where the impact of the coronavirus was limited, was the first to recover between mid-May and late June, outpacing the same period of 2019.
Trip.Com’s overseas business resumed rapid growth in the first quarter. Airline tickets and hotel reservations abroad more than doubled compared to the previous year. Overseas hotel bookings have jumped more than 50% from pre-pandemic levels.
In the second quarter, revenue from the European and US markets exceeded that of the same period of 2019, with business in the Asia-Pacific region also experiencing rapid growth. Foreign operations accounted for a larger share of the company’s operating revenue and contributed significantly more to its business.
Publisher: Futura Costaglione