Trip.com faces long-term competitive pressure due to antitrust rectification; Nomura maintains Neutral

Overview

This report is Nomura's quick comment on Trip.com's regulatory rectification event. The report focuses on the conclusions of SAMR's antitrust investigation into Trip.com's China online hotel booking business, the amount of fines and confiscations, the company's rectification commitments, and the potential impact on the competitive landscape and margins of the domestic hotel booking business.

Core views

Nomura believes that the approximately CNY5.2bn to CNY5.3bn in fines, confiscations, and refund obligations, while higher than its previous estimate of about CNY3.0bn, may be viewed by the market as a one-off financial impact. The more important risk is that, after ending exclusive arrangements for popular hotels and relaxing minimum price requirements, Trip.com's domestic hotel booking business may face more persistent structural competitive pressure, especially as Meituan and Douyin have the opportunity to catch up in hotel supply and price competitiveness.

Analysis framework

The report uses event-driven analysis and peer case comparison. Nomura first quantifies the impact of the SAMR penalty on Trip.com's net cash and margin forecasts, then references the case of Alibaba's market share decline after its 2021 antitrust rectification to judge that the removal of exclusive arrangements may weaken the platform's control over key supply-side resources.

Methodology notes

• Event-driven researchRegulatory penalty impact analysis

  Separate assessment of one-off financial shock and long-term operating impact

  The report treats the fine, confiscation of illegal gains, and refunds as one-off cash obligations, while separately assessing the ongoing impact of business-rule rectification on hotel supply, pricing systems, competitive intensity, and operating margins.

• Relative valuationP/E valuation

  12x FY27F P/E

  Nomura values Trip.com based on 12x FY27 forecast P/E and derives a USD51 target price, with the Nasdaq Composite as the benchmark index.

• Case comparisonRead-through from Alibaba antitrust rectification

  Market share redistribution after the removal of exclusive arrangements

  The report uses the case of Alibaba, whose market share fell from 59% in 2020 to 35% in 2025 after being required to cancel merchant exclusivity arrangements in 2021, as an analogy to judge that Trip.com may face the risk of weakened supply-side advantages.

Asset mapping & comparison

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

• TCOM.US

  Covered company in the report, rated Neutral

  Strengths

  Trip.com still has a one-stop travel service model and relatively high service quality, and Nomura believes it may still remain the largest hotel booking channel.

  Weaknesses

  Regulatory rectification weakens exclusive arrangements and minimum price requirements, which may reduce advantages in hotel supply and pricing and compress margins in the domestic hotel booking business.

  Comparison

  Meituan and Douyin may seize the opportunity to narrow the hotel supply gap; Alibaba's post-antitrust-rectification share decline is used as a negative analogy.

  Risks

  Intensifying competition, global economic downturn, travel spending below expectations, and outbound travel recovery slower than expected.

• 3690 HK

  Potential beneficiary competitor, rated Buy by Nomura

  Strengths

  May strengthen hotel supply and product competitiveness by using the window created by Trip.com's rectification.

  Weaknesses

  The report does not elaborate in detail on Meituan's own operating risks.

  Comparison

  Relative to Trip.com, Meituan may become more competitive after the hotel supply gap narrows.

  Risks

  There is uncertainty around competitive execution and the pace of acquiring hotel supply.

• Douyin

  Potential beneficiary competitor, unlisted

  Strengths

  May leverage traffic and content ecosystem to enter competition for hotel booking supply.

  Weaknesses

  Unlisted, and the report provides no financial forecasts or rating.

  Comparison

  Similar to Meituan, it may narrow the hotel supply gap after Trip.com's rectification.

  Risks

  Commercial conversion, hotel inventory, and service fulfillment capabilities still need to be validated.

Key data

• SAMR-assessed market sharenearly 60%Trip.com's share of China's online hotel booking market in 2025.
• Refund obligationCNY122.8mn（USD18mn）SAMR requires Trip.com to return hotel deposits.
• Confiscation of illegal gainsCNY1.66bn（USD245mn）Improper gains that SAMR requires to be confiscated.
• Fine amountCNY3.5bn（USD516mn）Calculated as 7.5% of Trip.com's FY25 China market revenue.
• Total cash obligationabout CNY5.3bnEquivalent to about 11% of Trip.com's net cash balance as of 2Q26.
• Nomura ratingNeutralRating maintained unchanged.
• Target priceUSD51.00Target price maintained unchanged, based on 12x FY27F P/E.
• Closing priceUSD43.64Closing price on July 24, 2026.
• FY26 non-GAAP operating margin impactdown 3 percentage points YoYNomura's revised forecast for the domestic hotel booking business.
• FY27 non-GAAP operating margin impactdown 1 percentage point YoYNomura's forecast of margin impact in subsequent years.
• FY26/FY27 non-GAAP operating profit forecast vs. consensus2% below / 9% belowRelative to Visible Alpha consensus.

Impact & implications

In the short term, the penalty amount represents a limited share of Trip.com's cash balance, and the market may downplay the one-off financial shock; in the medium to long term, the rectification may weaken Trip.com's control over hotel supply and pricing systems, making hotel products more homogeneous across major OTA platforms and leading to intensified competition and margin decline in the high-margin domestic hotel booking business.

Risks

• After Trip.com stops exclusive arrangements and minimum price requirements, competitors may gain access more quickly to high-quality hotel inventory and more competitive prices.
• Intensified competition in the domestic hotel booking business may lead to declines in FY26 and FY27 non-GAAP operating margins.
• If the global economy experiences a severe downturn due to natural or man-made disasters, travel demand and company earnings may come under pressure.
• If outbound travel recovers more slowly than expected or international flight capacity recovery is insufficient, upside potential may be limited.
• Intensifying competition from emerging players may hinder realization of the target price.

What to watch

• Trip.com's specific progress in implementing SAMR rectification and platform governance measures.
• Changes in hotel supply and price competitiveness on platforms such as Meituan and Douyin after exclusive arrangements with popular hotels are cancelled.
• Trends in Trip.com's domestic hotel booking business commission rate, traffic allocation, margins, and market share.
• Whether FY26 and FY27 non-GAAP operating profit continues to come in below market consensus.
• Changes in outbound travel recovery, international flight capacity, domestic travel spending, and per capita spending.