Trip.com Group Ltd.: Strong Market Position and Growth Potential Justify Buy Rating

Trip.com Group Ltd. (9961 – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst yesterday. Analyst Lei Yang CFA from CGS-CIMB reiterated a Buy rating on the stock and has a HK$588.00 price target.

Lei Yang CFA has given his Buy rating due to a combination of factors that highlight Trip.com Group Ltd.’s strong market position and growth potential. Despite increased competition from JD.com, Trip.com maintains a leading position in the online travel agency sector, supported by its extensive hotel network and superior customer service infrastructure. This robust positioning is expected to drive revenue and profit growth, with forecasts indicating a 14.5% increase in revenue and a stable net profit margin.
Furthermore, Lei Yang CFA points out that JD.com’s aggressive subsidy strategy is likely unsustainable, providing Trip.com with a competitive edge in the long term. The company’s solid performance during key travel periods, such as the Dragon Boat Festival, and its expansion in international markets further bolster its growth prospects. With a strong track record and strategic use of AI tools to enhance efficiency, Trip.com is well-positioned to capitalize on the recovering travel demand, justifying the Buy rating.