Gloomy Outlook Limits The Bulls? Group Limited, a Chinese multinational online travel company founded in 1999, which engages in integrating a wide range of travel products, services and differentiated travel content, as well as on-the-go support to travellers around the world, is estimated  to report Earnings, Monday June 27 after the US market close.

图 1:Trip.Com  money.cnn

Despite industry fluctuations and weaker seasonality, the company delivered a solid performance in general as it remained adaptive to fast-changing conditions, continued to expand product offerings and to improve content capabilities and implemented strict control on the operational cost. Market recovery from the pandemic has also served as a stepping stone to the consistent results. According to the company’s financial report released in March 2022, net revenue and adjusted EBITDA improved by 9% and 6% respectively  for the full year 2021.

For the upcoming earnings announcement, consensus estimate for sales stood at $4.0B, up 5.26% from the previous quarter but down -32.20% from the same period last year. On the other hand, earnings per share (EPS) is expected to hit –$0.48, slightly up 11.11% from the previous quarter, but down -142.48% from the same period last year.

图 2:Air Passenger Market in Detail – March 2022IATA

Broader re-openings and loosening of travel restrictions in many countries have led to a surge in travel demand. According to latest data released by the International Air Transport Association (IATA), total traffic (namely revenue passenger kilometres, or RPK) over Europe and North America have improved significantly by 246.9% and 96.5%. RPK over Asia-Pacific is down -17.9% following Omicron-related restrictions. has its businesses running in North America, Europe, and Asia. Thus, an increase in RPK over countries in this region shall fundamentally benefit the company. Some countries in Asia (for instance, Singapore, Malaysia, Bangkok, South Korea) which have loosened Covid restrictions may serve as another tailwind.

 3:National Index – May 2022 Ipsos

On the downside, there are undeniably travel price hikes following rising inflation, which may derail travel recovery, though, that may be “by the end of the year and for 2023”. On a wider scale, global consumer confidence remains on a downward track. According to Ipsos, a significant drop in value of a number of indicators namely National index, Investment Index and Jobs Confidence Index over various countries signalled a gloomy economic outlook – a headwind for development of companies.

Technical Analysis:  

The Daily chart displayed #Trip share price saw its highest price this year at $30.70 (15th February), before hitting bottom later at $14.12. This is a historical new low since the outbreak of Covid-19 pandemic ($20.10 recorded on 18th March 2020). The company’s share price remains range-bound during Q2 2022 (Upper range: $25.25 – $25.97; Lower range: $18.15 – $18.55). Currently, $23.43 serves as minor resistance. A break above this level may indicate possibility for the bullish momentum to extend towards the upper range $25.25 – $25.97, followed by $29.18 – $29.63. On the other hand, $21.44 serves as the nearest minor support. A bearish break below the said support may indicate downside potential for the company share price to test the next support at $19.87, followed by the lower range $18.15 – $18.55.

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Larince Zhang

Market Analyst

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