Trip.com Shares Tumble After Q1 Profit Drops and Weak Revenue Growth Outlook

Trip.com Group (HK:9961) shares declined sharply on Thursday after the leading Chinese online travel platform reported a significant drop in first-quarter profit and issued a cautious revenue forecast for the second quarter. The disappointing guidance weighed heavily on investor sentiment, sending the company's Hong Kong-listed stock down 10.6% to HK$31.60 by 03:44 GMT, marking its lowest level since August 2024.

During the January-to-March period, Trip.com posted net income attributable to shareholders of 2.5 billion yuan (approximately $363 million), a notable decrease from 4.3 billion yuan recorded in the same quarter last year. Despite the earnings decline, the company delivered solid revenue growth, with total revenue rising 17% year-over-year to 16.2 billion yuan. The increase was supported by steady travel demand across China and strong expansion in its international business.

Trip.com highlighted impressive performance in its overseas operations, revealing that gross bookings on its global platform surged around 65% compared to the previous year. In addition, inbound travel bookings jumped roughly 90%, reflecting continued recovery in international tourism and growing demand from foreign travelers visiting China.

However, investors focused more on the company's forward guidance than its quarterly revenue performance. Trip.com expects second-quarter revenue growth to slow significantly, forecasting an increase of only 3% to 8% compared with the same period last year. Management attributed the weaker outlook to ongoing macroeconomic uncertainty, elevated energy costs, geopolitical tensions, and operational adjustments that could pressure profit margins and overall earnings.

Adding to investor concerns, Trip.com disclosed that it remains under investigation by China's State Administration for Market Regulation over alleged monopolistic practices. The company stated that it is fully cooperating with regulators but cautioned that the probe could result in substantial financial penalties or require changes to its business operations.

The combination of slowing revenue growth expectations, declining quarterly profit, and regulatory uncertainty contributed to the sharp selloff in Trip.com shares, despite continued strength in international travel bookings. Investors will closely monitor the company's ability to navigate economic challenges while sustaining growth in both domestic and overseas travel markets.