Trip.com Group drops 7.4% as net profit misses despite revenue beat

Trip.com Group reported 1Q26 revenue of RMB16.2 billion, beating estimates, but net profit missed on associate losses tied to MakeMyTrip.

"Citi maintained its Buy rating and USD82 price target, noting the investigation into premium hotel practices warrants close monitoring," the broker said.

Revenue climbed 17% year-over-year to RMB16.2 billion, 2% above both Citi's and the market's consensus. Non-GAAP adjusted operating margin reached 28.6%, slightly above Citi's 27.8% forecast, supported by revenue growth and cost control on sales and marketing expenses. However, non-GAAP net profit of RMB3.91 billion missed Citi's RMB4.4 billion estimate and the market's RMB4.2 billion consensus. The shortfall stemmed from RMB1.15 billion in losses from associates, which Citi linked to the share price decline of MakeMyTrip.

The stock fell 7.35% on the day, its steepest single-session drop in recent months. For the second quarter, Trip.com guided total net revenue growth of 3% to 8% year-over-year, a sharp deceleration from the first quarter's 17% pace. Management cited rising oil prices and a business rectification following an investigation by the State Administration for Market Regulation as the primary headwinds.

The results signal that regulatory scrutiny and macro pressures are weighing on China's largest online travel agency. Investors will watch for updates on the SAMR investigation and its impact on premium hotel partnerships in the coming quarters.

This article is for informational purposes only and does not constitute investment advice.