Citigroup maintains "Buy" rating on Trip.com and TONGCHENGTRAVEL, expects domestic demand to improve in the new spring

Citi published a research report indicating that, according to data from the Ministry of Transport, the total inter-regional movement of people during the first seven days of the Spring Festival holiday (February 15 to 21) reached 2.08 billion trips, a year-on-year increase of 9.3%, which accelerated compared to the 6.8% year-on-year growth in the first four days. Among them, the passenger volume for railways, civil aviation, highways, and waterways grew by 9.9%, 7.8%, 9.2%, and 29.5% year-on-year, respectively. If we only consider the past three days (February 20 to 22), the total movement volume had a year-on-year growth rate of 11.9%.

The bank believes that the demand for citizens to return home for family reunions is concentrated before the long holiday, and the recent increase in passenger volume reflects a positive outlook for domestic travel demand in the remaining days of the Spring Festival holiday. Additionally, the balance between long-distance and short-distance travel is a positive signal for online travel platforms. Currently, it maintains a "Buy" rating for Trip.com-S (09961.HK) and TONGCHENGTRAVEL (00780.HK), with a target price of $82 for Trip.com (TCOM.US) and a target price of HKD 28 for TONGCHENGTRAVEL. Citi also noted that Trip.com will announce its fourth-quarter results after the U.S. stock market closes this Wednesday (25th), and it is expected that the stock price performance will be relatively quiet before this announcement