In "The Big Banks," Citigroup: Affected by the antitrust investigation of Trip.com, TONGCHENGTRAVEL's stock price is expected to continue to fluctuate

Citi published a research report stating that Trip.com (09961.HK), as one of the major shareholders of TONGCHENGTRAVEL (00780.HK), currently holds about 26% of its shares. Therefore, it is inevitable that TONGCHENGTRAVEL would be affected by the news of Trip.com facing an antitrust investigation. Yesterday (14th), TONGCHENGTRAVEL's stock price fell by 12%, which is a reasonable market reaction.

Citi pointed out that Trip.com and TONGCHENGTRAVEL share the same hotel inventory in the domestic tourism market. If Trip.com ultimately needs to make concessions regarding hotel commissions or exclusivity in the domestic market, TONGCHENGTRAVEL, which has the same inventory, will also be affected. However, the expected impact on TONGCHENGTRAVEL's profits is relatively small, as it can offset some operational pressure through profit improvement potential from hotel management and other business lines. It is estimated that in the next 3 to 6 months before the investigation results are announced, its stock price will continue to fluctuate, similar to the situation with Trip.com. Citi previously rated TONGCHENGTRAVEL as "Hold," with a target price of 22 yuan