Trip.com 1Q26 operating profit beat expectations, but 2Q26 revenue guidance slowed noticeably

Overview

This report is HSBC's Equity Snap commentary on Trip.com Group, with the core focus on the contrast between 1Q26 results and 2Q26 guidance: the company's 1Q26 revenue and adjusted operating profit both exceeded expectations, but management's 2Q26 revenue growth guidance slowed significantly, reflecting the impact of the macro environment, changes in the industry's compliance framework, and operational adjustments.

Core views

HSBC maintains a Buy rating on Trip.com Group with a target price of USD75.00. Positive factors include better-than-expected 1Q26 revenue and adjusted operating profit, stronger-than-expected demand for packaged tours and corporate travel, and continued high growth in the international platform and inbound travel. Negative factors include the slowdown in 2Q26 revenue growth guidance to 3%-8%, the possibility that weaker domestic air travel demand drags on the domestic hotel business, guidance that is weaker relative to Tongcheng Travel, and the possibility that the antitrust investigation leads to fines or changes in business practices.

Analysis framework

The report uses an earnings review and peer comparison approach, comparing Trip.com's 1Q26 actual revenue, adjusted operating profit, and net profit performance against HSBC forecasts and market consensus, and comparing 2Q26 revenue guidance horizontally with Tongcheng Travel, while also assessing short-term operating pressure in light of the international platform, inbound travel, domestic hotels, air travel demand, and the regulatory investigation.

Methodology notes

• Earnings comparisonActual results versus expectations comparison

  Compare the company's disclosed revenue, adjusted operating profit, and bottom-line profit with HSBC forecasts and market consensus.

  Trip.com's 1Q26 revenue was 1% above HSBC's forecast and 2% above market consensus; adjusted operating profit was 4% above both HSBC and consensus forecasts, but due to a decline in MakeMyTrip's share price that widened associate losses, bottom-line profit was 8% below HSBC's forecast.

• Peer comparisonHorizontal comparison of revenue guidance

  Compare Trip.com's and Tongcheng Travel's 2Q26 revenue growth guidance.

  Trip.com's 2Q26 revenue growth guidance of 3%-8% is weaker than Tongcheng Travel's 5%-10%. HSBC believes this may reflect a greater impact from weaker air travel demand on the domestic hotel business, as well as potential share loss during the period of operational adjustment.

• Rating frameworkHSBC stock rating and target price framework

  HSBC's target price usually reflects the analyst's assessment of a stock's value over 6 to 12 months.

  The disclosure section explains that when the target price is more than 20% above the current price, the stock is typically classified as Buy; in this report, the target price of USD75.00 is about 64.8% above the current price of USD45.50.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Trip.com Group (TCOM.US)

  Core covered name

  Strengths

  1Q26 revenue and adjusted operating profit exceeded expectations, with international platform gross bookings up about 65% year-on-year and inbound travel bookings up about 90% year-on-year.

  Weaknesses

  2Q26 revenue growth guidance fell to 3%-8%, and the domestic hotel business may be affected by weaker air travel demand and operational adjustments.

  Comparison

  2Q26 revenue guidance is weaker than Tongcheng Travel's 5%-10%, and still appears soft despite its positioning in overseas and China outbound business.

  Risks

  Macro headwinds, compliance framework adjustments, the SAMR antitrust investigation, potential fines or changes in business practices, and market share loss.

• Tongcheng Travel (0780.HK)

  Peer comparison target

  Strengths

  2Q26 revenue growth guidance is 5%-10%, above Trip.com's 3%-8%.

  Weaknesses

  The report does not elaborate on its specific weaknesses and uses it only as a reference showing Trip.com's weaker guidance.

  Comparison

  Relative to Trip.com, Tongcheng Travel's 2Q26 revenue guidance range is higher.

  Risks

  Headwinds in air travel demand may still affect the online travel business.

• MakeMyTrip Ltd (MMYT.US)

  Source of associate impact

  Strengths

  The report does not provide an analysis of operating advantages.

  Weaknesses

  The share price decline widened Trip.com's equity-method associate losses.

  Comparison

  It is not the main covered name in this report, but its share price movements affect Trip.com's bottom-line profit.

  Risks

  Share price volatility may continue to affect Trip.com's associate P&L.

Key data

• 1Q26 revenue growthYoY +17%1% above HSBC's forecast and 2% above market consensus.
• 1Q26 adjusted operating profit growthYoY +15%4% above both HSBC's forecast and market consensus.
• 2Q26 revenue growth guidanceYoY +3% to +8%A clear slowdown from 1Q26's +17%, and also below Tongcheng Travel's +5% to +10%.
• International platform gross bookingsapproximately YoY +65%Shows Trip.com's international business is still maintaining relatively fast growth.
• Inbound travel bookingsapproximately YoY +90%Inbound travel demand remained strong.
• Associate lossesRMB1.2bnMainly affected by the decline in MakeMyTrip's share price, which caused bottom-line profit to come in 8% below HSBC's forecast.
• Rating and target priceBuy, TP USD75.00Current price USD45.50, as of June 23, 2026.

Impact & implications

The report remains positive on Trip.com's medium- to long-term outlook, with the target price implying substantial upside, but near-term share price and earnings expectations may be affected by the slowdown in 2Q26 revenue guidance, pressure in the domestic hotel business, weaker air travel demand, compliance adjustments, and uncertainty surrounding the antitrust investigation. High growth in the international platform and inbound travel is an important support offsetting domestic pressure.

Risks

• 2Q26 revenue growth guidance may be below market expectations, with short-term growth momentum slowing.
• Macro headwinds may suppress travel and hotel demand.
• Weaker domestic air travel demand may weigh on Trip.com's domestic hotel business.
• Operational adjustments and changes in the compliance framework may create short-term market share pressure.
• The outcome and timeline of the SAMR antitrust investigation are uncertain and may lead to significant fines, financial penalties, or changes in business practices.
• MakeMyTrip share price volatility may affect Trip.com's equity-method earnings and bottom-line profit.

What to watch

• Whether actual 2Q26 revenue growth can land within or exceed the 3%-8% guidance range.
• Whether the domestic hotel business continues to be impacted by weaker air travel demand.
• Whether international platform gross bookings and inbound travel bookings can maintain high growth.
• Progress in the SAMR antitrust investigation, potential fines, and required business rectification.
• Changes in Trip.com's market share versus competitors such as Tongcheng Travel after operational adjustments.
• The impact of associate MakeMyTrip's share price and equity-method earnings on net profit.