Citi: Short to medium-term agency-style AI has little impact on the industry, maintains "Buy" rating for Trip.com and TONGCHENGTRAVEL

Citigroup published a research report indicating that recently, the stock prices of Trip.com (TCOM.US) and TONGCHENGTRAVEL (00780.HK) have experienced adjustments. The bank believes that part of the reason is due to investors' increasing concerns about the potential threats posed by agent-based artificial intelligence (AI). The report points out that in the short to medium term, agent-based AI is unlikely to have a significant impact on the online travel industry for the following reasons: 1) Leading online travel platforms have strong bargaining power over the supply chain (especially hotels and experiential travel), allowing them to offer better prices; 2) The factors influencing travel booking decisions are diverse and complex, and cannot be covered by just a few prompts.

However, to maintain their market position, the bank believes that online travel platforms may leverage their advantages in pricing, product inventory, fulfillment systems, and customer service to integrate more with large language model applications to capture potential traffic flowing to these applications (for example, Doubao has some cooperation with Trip.com, and Yuanbao has some cooperation with TONGCHENGTRAVEL). The bank maintains a "Buy" rating on Trip.com and TONGCHENGTRAVEL, with target prices of $82 and HKD 28, respectively