Report by Blue Lotus Research
Blue Lotus reinitiates coverage of the stock with a Sell rating as they expect domestic travel growth to slow down in 2024 and assumptions on Chinese outbound travel demand need to be reassessed. They see rising competition in the domestic travel market from Meituan and Tongcheng Travel in the short haul segment as well as share gains made by economy hotels encroaching TCOM’s commission base. While TCOM was quick in launching Large Language Model (LLM) for travel planning, Blue Lotus believes it lacks sufficient data and the advent of AIGC will simplify travel booking which works to TCOM’s disfavour.