In "Major Banks," Bank of China lowers Trip.com's target price to 579 yuan, with fourth-quarter performance expected to be acceptable, but the stock price may be under pressure

The research report from Bank of China International indicates that Trip.com (09961.HK) performed reasonably well in the fourth quarter, with non-GAAP net profit increasing by 15% year-on-year to RMB 3.5 billion, although slightly below the bank's expectations. The bank expects core business to maintain growth momentum this year, with full-year revenue likely to grow in the mid-teens year-on-year under a neutral forecast.

However, the bank believes the stock price may face some pressure due to the uncertainty surrounding the investigation by the State Administration for Market Regulation and potential fines, as well as whether Trip.com will adjust its pace of overseas expansion to optimize profitability. At the same time, investors are concerned that consumer-facing AI technology may divert market share from Trip.com.

The bank's latest forecast has taken into account the potential RMB 2.5 billion fine that may be faced this year and believes that most of the concerns in other markets have been exaggerated; it maintains a "Buy" rating and has lowered the target prices for Trip.com (TCOM.US) to USD 74.3 and HKD 579 for its U.S. and Hong Kong stocks, respectively, continuing to believe that August this year may be a better time to re-enter