Trip.com Group Limited Reports Unaudited Second Quarter and First Half of 2021 Financial Results

Rhea-AI Summary

Trip.com Group (TCOM) reported a strong recovery in its second quarter of 2021, with net revenue reaching RMB5.9 billion (US$912 million), an 86% increase year-over-year and a 43% rise quarter-over-quarter. Key drivers included a 150% growth in domestic hotel and air-ticket GMV. Corporate travel revenue grew 141% year-over-year. However, the company faced a net loss of RMB647 million (US$100 million), compared to a loss of RMB476 million a year earlier. Gross margin improved to 79%. As of June 30, 2021, the company held RMB75.4 billion (US$11.7 billion) in cash and equivalents.

Positive

• Net revenue increased by 86% year-over-year and 43% quarter-over-quarter.
• Domestic hotel and air-ticket GMV grew by about 150% year-over-year.
• Corporate travel revenue rose by 141% year-over-year.

Negative

• Net loss attributable to shareholders was RMB647 million (US$100 million).
• Product development expenses increased by 24% year-over-year.

SHANGHAI, Sept. 23, 2021 /PRNewswire/ -- Trip.com Group Limited (Nasdaq: TCOM; HKEX: 9961) ("Trip.com Group" or the "Company"), a leading one-stop travel service provider of accommodation reservation, transportation ticketing, packaged tours and corporate travel management, today announced its unaudited financial results for the second quarter and first half of 2021.

Key Highlights for the Second Quarter of 2021

• Our business has showed resilient recovery in the China domestic market.
  —    Total net revenue increased by 86% year over year and 43% quarter over quarter, driven by the strong recovery momentum of the China domestic market.
  —    Both our domestic hotel and air-ticket GMV increased by about 150% year over year. Compared with the same pre-COVID period in 2019, both domestic hotel and air ticketing reservations achieved double-digit growth in the second quarter.
  —    Staycation travel continues to serve as a major driver of domestic recovery with local hotel reservations growing nearly 80% versus pre-COVID period in 2019.
  —    Revenues from corporate travel management grew 141% year over year and 26% compared with the pre-COVID period in 2019.

"Overall, the Chinese domestic travel market has been encouraging, and we see great potential in international markets," said James Liang, Executive Chairman. "Going forward, we will continue to be adaptive and responsive to the changing market conditions and the evolving demands of post-pandemic travelers."

"Throughout the second quarter, we continued to focus on the domestic market in terms of supply chain, content capabilities, service quality, and technology advancement, to lay a solid foundation for new growth drivers beyond the pandemic," said Jane Sun, Chief Executive Officer. "We also endeavor to maximize our social impacts while increasing the Company's total value. We will keep improving as we strive towards our ideals."

Second Quarter of 2021 Financial Results and Business Updates

The Company's overall results for the second quarter of 2021 were negatively impacted by the COVID-19 pandemic, as well as subsequent outbreaks driven by new variants of COVID-19. However, benefiting from the general containment of the COVID-19 pandemic in China, the Company's domestic business has continued to show a strong recovery, which has contributed to substantially all of its total revenue.

For the second quarter of 2021, Trip.com Group reported net revenue of RMB5.9 billion (US$912 million), representing an 86% increase from the same period in 2020, primarily due to the strong recovery of China's domestic market. Net revenue for the second quarter of 2021 increased by 43% from the previous quarter, primarily due to the easement of China's travel restrictions previously enhanced in January and February 2021.

Accommodation reservation revenue for the second quarter of 2021 was RMB2.5 billion (US$380 million), representing a 96% increase from the same period in 2020, and a 55% increase from the previous quarter, primarily due to the recovery of China's domestic market.

Transportation ticketing revenue for the second quarter of 2021 was RMB2.1 billion (US$320 million), representing an 80% increase from the same period in 2020, and a 37% increase from the previous quarter, primarily due to the recovery of China's domestic market.

Packaged-tour revenue for the second quarter of 2021 was RMB367 million (US$57 million), representing a 182% increase from the same period in 2020, and a 117% increase from the previous quarter, primarily due to the recovery of China's domestic market.

Corporate travel revenue for the second quarter of 2021 was RMB390 million (US$60 million), representing a 141% increase from the same period in 2020, and a 55% increase from the previous quarter, primarily due to the recovery of China's domestic market.

Gross margin was 79% for the second quarter of 2021, which increased from 72% for the same period in 2020 and 75% for the previous quarter.

Product development expenses for the second quarter of 2021 increased by 24% to RMB2.2 billion (US$345 million) from the same period in 2020, primarily due to an increase in product development personnel related expenses. Product development expenses stayed approximately the same from the previous quarter. Product development expenses for the second quarter of 2021 accounted for 38% of the net revenue.

Sales and marketing expenses for the second quarter of 2021 increased by 112% to RMB1.4 billion (US$217 million) from the same period in 2020 and increased by 47% from the previous quarter, primarily due to the increase in expenses relating to sales and marketing promotion activities. Sales and marketing expenses for the second quarter of 2021 accounted for 24% of the net revenue.

General and administrative expenses for the second quarter of 2021 increased by 39% to RMB713 million (US$110 million) from the same period in 2020, primarily due to a reversal of bad debt provision in the second quarter of 2020 for the Company's travel suppliers reflecting the change in credit risk with travel industry recovery. Excluding the effect of bad debt provision, general and administrative expenses stayed flat from the same period in 2020. General and administrative expenses increased by 4% from the previous quarter. General and administrative expenses for the second quarter of 2021 accounted for 12% of the net revenue.

Income tax expense for the second quarter of 2021 was RMB97 million (US$15 million), compared to RMB201 million in the same period in 2020 and RMB41 million in the previous quarter. The change in our effective tax rate was primarily due to the non-taxable income of the fair value changes in equity securities investments and exchangeable senior notes.

Net loss attributable to Trip.com Group's shareholders for the second quarter of 2021 was RMB647 million (US$100 million), compared to net loss attributable to Trip.com Group's shareholders of RMB476 million in the same period in 2020 and net income attributable to Trip.com Group's shareholders of RMB1.8 billion in the previous quarter. Excluding share-based compensation charges and fair value changes of equity securities investments and exchangeable senior notes recorded in other income/(expense), non-GAAP net income attributable to Trip.com Group's shareholders was RMB728 million (US$112 million), compared to non-GAAP net loss attributable to Trip.com Group's shareholders of RMB1.2 billion in the same period in 2020 and non-GAAP net loss attributable to Trip.com Group's shareholders of RMB204 million in the previous quarter.

Adjusted EBITDA for the second quarter of 2021 was RMB916 million (US$142 million), compared to RMB124 million in the same period in 2020 and RMB-216 million in the previous quarter. Adjusted EBITDA margin was 16% for the second quarter of 2021, compared to 4% in the same period in 2020 and -5% in the previous quarter.

Diluted loss per ordinary share and per ADS was RMB1.02 (US$0.16) for the second quarter of 2021. Excluding share-based compensation charges and fair value changes of equity securities investments and exchangeable senior notes, non-GAAP diluted earnings per ordinary share and per ADS were RMB1.13 (US$0.18) for the second quarter of 2021. Each ADS currently represents one ordinary share of the Company.

As of June 30, 2021, the balance of cash and cash equivalents, restricted cash, short-term investment, held to maturity time deposit and financial products was RMB75.4 billion (US$11.7 billion).

Conference Call

Trip.com Group's management team will host a conference call at 8:00PM EST on September 23, 2021 (or 8:00AM CST on September 24, 2021) following this announcement.

The conference call will be available live on Webcast and for replay at: https://investors.trip.com. The call will be archived for twelve months on our website.

All participants must pre-register to join this conference call using the Participant Registration link below:

https://s1.c-conf.com/diamondpass/10016512-wu23h2.html

Upon registration, each participant will receive details for this conference call, including dial-in numbers, passcode and a unique access PIN. To join the conference, please dial the number provided, enter the passcode, followed by your PIN.

A telephone replay of the call will be available after the conclusion of the conference call until October 1, 2021.

The dial-in details for the replay:
International dial-in number: +61-7-3107-6325
Passcode: 10016512

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "may," "will," "expect," "anticipate," "future," "intend," "plan," "believe," "estimate," "is/are likely to," "confident" or other similar statements. Among other things, quotations from management and the Business Outlook section in this press release, as well as Trip.com Group's strategic and operational plans, contain forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, severe or prolonged downturn in the global or Chinese economy, general declines or disruptions in the travel industry, volatility in the trading price of Trip.com Group's ADSs or shares, Trip.com Group's reliance on its relationships and contractual arrangements with travel suppliers and strategic alliances, failure to compete against new and existing competitors, failure to successfully manage current growth and potential future growth, risks associated with any strategic investments or acquisitions, seasonality in the travel industry in the relevant jurisdictions where Trip.com Group operates, failure to successfully develop Trip.com Group's existing or future business lines, damage to or failure of Trip.com Group's infrastructure and technology, loss of services of Trip.com Group's key executives, adverse changes in economic and political policies of the PRC government, inflation in China, risks and uncertainties associated with PRC laws and regulations with respect to the ownership structure of Trip.com Group's affiliated Chinese entities and the contractual arrangements among Trip.com Group, its affiliated Chinese entities and their shareholders, and other risks outlined in Trip.com Group's filings with the U.S. Securities and Exchange Commission or the Stock Exchange of Hong Kong Limited. All information provided in this press release and in the attachments is as of the date of the issuance, and Trip.com Group does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

About Non-GAAP Financial Measures

To supplement Trip.com Group's unaudited condensed consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Trip.com Group uses Non-GAAP financial information related to adjusted net income attributable to Trip.com Group's shareholders, adjusted EBITDA, adjusted EBITDA margin and adjusted diluted earnings per ordinary share and per ADS, each of which is adjusted from the most comparable GAAP result to exclude the share-based compensation charges recorded under ASC 718, "Compensation-Stock Compensation" and its share-based compensation charges are not tax deductible, and fair value changes of equity securities investments and exchangeable senior notes, net of tax, recorded under ASU 2016-1. Trip.com Group's management believes the Non-GAAP financial measures facilitate better understanding of operating results from quarter to quarter and provide management with a better capability to plan and forecast future periods.

Non-GAAP information is not prepared in accordance with GAAP, does not have a standardized meaning under GAAP, and may be different from Non-GAAP methods of accounting and reporting used by other companies. The presentation of this additional information should not be considered a substitute for GAAP results. A limitation of using Non-GAAP financial measures is that Non-GAAP measures exclude share-based compensation charges and fair value changes of equity securities investments and exchangeable senior notes that have been and will continue to be significant recurring expenses in Trip.com Group's business for the foreseeable future.

Reconciliations of Trip.com Group's Non-GAAP financial data to the most comparable GAAP data included in the consolidated statement of operations are included at the end of this press release.

About Trip.com Group Limited

Trip.com Group Limited (Nasdaq: TCOM; HKEX: 9961) is a leading one-stop travel platform globally, integrating a comprehensive suite of travel products and services and differentiated travel content. It is the go-to destination for travelers in China, and increasingly for travelers around the world, to explore travel and get inspired, to make informed and cost-effective travel bookings, and to enjoy hassle-free, on-the-go support and share travel experience. Founded in 1999 and listed on Nasdaq in 2003, the Company operates under a portfolio of brands, including Ctrip, Qunar, Trip.com and Skyscanner.

For further information, please contact:

Investor Relations
Trip.com Group Limited
Tel: +86 (21) 3406-4880 X 12229
Email: iremail@trip.com

 

 

 

Trip.com Group Limited
Unaudited Consolidated Balance Sheets
(In millions, except share and per share data)
			December 31, 2020		June 30, 2021		June 30, 2021
			RMB (million)		RMB (million)		USD (million)
			(unaudited)		(unaudited)		(unaudited)
	ASSETS
	Current assets:
	Cash, cash equivalents and restricted cash		19,415		27,696		4,290
	Short-term investments		24,820		35,286		5,465
	Accounts receivable, net		4,119		5,339		827
	Prepayments and other current assets		9,657		10,377		1,607
	Total current assets		58,011		78,698		12,189
	Property, equipment and software		5,780		5,605		868
	Intangible assets and land use rights		13,344		13,177		2,041
	Right-of-use asset		987		1,014		157
	Investments (Includes held to maturity time deposit and financial products of RMB15,357 million and RMB12,388 million as of December 31,2020 and June 30, 2021, respectively)		47,943		47,039		7,285
	Goodwill		59,353		59,353		9,193
	Other long-term assets		436		413		64
	Deferred tax asset		1,395		1,706		264
	Total assets		187,249		207,005		32,061
	LIABILITIES
	Current liabilities:
	Short-term debt and current portion of long-term debt		33,665		40,967		6,345
	Accounts payable		4,506		6,577		1,019
	Advances from customers		7,605		7,595		1,176
	Other current liabilities		12,593		13,431		2,080
	Total current liabilities		58,369		68,570		10,620
	Deferred tax liability		3,574		3,534		547
	Long-term debt		22,718		22,713		3,518
	Long-term lease liability		618		608		94
	Other long-term liabilities		403		250		39
	Total liabilities		85,682		95,675		14,818
	SHAREHOLDERS' EQUITY
	Total Trip.com Group Limited shareholders' equity		100,354		110,395		17,098
	Non-controlling interests		1,213		935		145
	Total shareholders' equity		101,567		111,330		17,243
	Total liabilities and shareholders' equity		187,249		207,005		32,061

 

 

 

Trip.com Group Limited
Unaudited Consolidated Statements of Income/(Loss)
(In millions, except share and per share data)
			Three Months Ended								Six Months Ended
			June 30, 2020		March 31, 2021		June 30, 2021		June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2021
			RMB (million)		RMB (million)		RMB (million)		USD (million)		RMB (million)		RMB (million)		USD (million)
			(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)
	Revenue:
	Accommodation reservation		1,254		1,580		2,455		380		2,409		4,035		625
	Transportation ticketing		1,150		1,506		2,066		320		3,543		3,572		553
	Packaged-tour		130		169		367		57		653		536		83
	Corporate travel		162		252		390		60		288		642		99
	Others		466		602		614		95		1,003		1,216		188
	Total revenue		3,162		4,109		5,892		912		7,896		10,001		1,548
	Less: Sales tax and surcharges		(3)		(1)		(2)		(0)		(6)		(3)		(0)
	Net revenue		3,159		4,108		5,890		912		7,890		9,998		1,548
	Cost of revenue		(872)		(1,034)		(1,223)		(189)		(2,092)		(2,257)		(350)
	Gross profit		2,287		3,074		4,667		723		5,798		7,741		1,198
	Operating expenses:
	Product development **		(1,801)		(2,225)		(2,226)		(345)		(3,497)		(4,451)		(689)
	Sales and marketing **		(661)		(952)		(1,402)		(217)		(2,044)		(2,354)		(365)
	General and administrative **		(513)		(684)		(713)		(110)		(2,455)		(1,397)		(216)
	Total operating expenses		(2,975)		(3,861)		(4,341)		(672)		(7,996)		(8,202)		(1,270)
	(Loss)/income from operations		(688)		(787)		326		51		(2,198)		(461)		(72)
	Interest income		603		418		472		73		1,116		890		138
	Interest expense		(461)		(407)		(418)		(65)		(908)		(825)		(128)
	Other income/(expense)		1,766		2,508		(848)		(131)		(2,060)		1,660		257
	Income/(loss) before income tax expense and equity in income of affiliates		1,220		1,732		(468)		(72)		(4,050)		1,264		195
	Income tax (expense)/benefit		(201)		(41)		(97)		(15)		53		(138)		(21)
	Equity in (loss)/income of affiliates		(1,491)		74		(94)		(15)		(1,812)		(20)		(3)
	Net (loss)/income		(472)		1,765		(659)		(102)		(5,809)		1,106		171
	Net loss attributable to non-controlling interests		12		15		12		2		20		27		4
	Accretion to redemption value of redeemable non-controlling interests		(16)		-		-		-		(40)		-		-
	Net (loss)/income attributable to Trip.com Group Limited		(476)		1,780		(647)		(100)		(5,829)		1,133		175
	(Losses)/earnings per ordinary share *
	- Basic		(0.80)		2.95		(1.02)		(0.16)		(9.75)		1.76		0.27
	- Diluted		(0.80)		2.88		(1.02)		(0.16)		(9.75)		1.73		0.27
	(Losses)/earnings per ADS *
	- Basic		(0.80)		2.95		(1.02)		(0.16)		(9.75)		1.76		0.27
	- Diluted		(0.80)		2.88		(1.02)		(0.16)		(9.75)		1.73		0.27
	Weighted average ordinary shares outstanding *
	- Basic		599,749,816		604,596,792		635,476,056		635,476,056		597,903,192		644,666,248		644,666,248
	- Diluted		599,749,816		629,540,722		635,476,056		635,476,056		597,903,192		656,483,984		656,483,984
	** Share-based compensation included in Operating expenses above is as follows:
	Product development		252		151		181		28		431		332		51
	Sales and marketing		41		22		34		5		71		56		9
	General and administrative		195		121		151		23		328		272		42
	* The change in ADS ratio proportionate to the Share Subdivision from eight ADSs representing one ordinary share to one ADS representing one Share, effective on March 18, 2021. Basic and diluted earnings/(losses) per ordinary share (GAAP and Non-GAAP) and weighted average ordinary shares outstanding (GAAP and Non-GAAP) for the three months ended June 30, 2020 and for the six months ended June 30, 2020 have been retrospectively adjusted for the Share Subdivision that became effective on March 18, 2021.

 

 

 

Trip.com Group Limited
Reconciliation of  GAAP and Non-GAAP Results
(In millions, except % and per share data)
			Three Months Ended								Six Months Ended
			June 30, 2020		March 31, 2021		June 30, 2021		June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2021
			RMB (million)		RMB (million)		RMB (million)		USD (million)		RMB (million)		RMB (million)		USD (million)
			(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)		(unaudited)
	Net (Loss)/income		(472)		1,765		(659)		(102)		(5,809)		1,106		171
	Less: Interest income		(603)		(418)		(472)		(73)		(1,116)		(890)		(138)
	Add: Interest expense		461		407		418		65		908		825		128
	Add: Other (income)/expense		(1,766)		(2,508)		848		131		2,060		(1,660)		(257)
	Add: Income tax expense/(benefit)		201		41		97		15		(53)		138		21
	Add: Equity in loss/(income) of affiliates		1,491		(74)		94		15		1,812		20		3
	(Loss)/income from operations		(688)		(787)		326		51		(2,198)		(461)		(72)
	Add: Share-based compensation		488		294		366		56		830		660		102
	Add: Depreciation and amortization		324		277		224		35		615		501		78
	Adjusted EBITDA		124		(216)		916		142		(753)		700		108
	Adjusted EBITDA margin		4%		-5%		16%		16%		-10%		7%		7%
	Net (loss)/income attributable to Trip.com Group Limited		(476)		1,780		(647)		(100)		(5,829)		1,133		175
	Add: Share-based compensation		488		294		366		56		830		660		102
	Add: (Gain)/loss from fair value changes of equity securities investments and exchangeable senior notes		(1,194)		(2,367)		1,053		163		1,805		(1,314)		(203)
	Add: Tax effects on fair value changes of equity securities investments and exchangeable senior notes		27		89		(44)		(7)		(182)		45		7
	Non-GAAP net (loss)/income attributable to Trip.com Group Limited		(1,155)		(204)		728		112		(3,376)		524		81
	Weighted average ordinary shares outstanding- Diluted-non GAAP *		599,749,816		604,596,792		645,021,131		645,021,131		597,903,192		656,483,984		656,483,984
	Non-GAAP Diluted (losses)/income per share *		(1.93)		(0.34)		1.13		0.18		(5.65)		0.80		0.12
	Non-GAAP Diluted (losses)/income per ADS *		(1.93)		(0.34)		1.13		0.18		(5.65)		0.80		0.12
	Notes for all the condensed consolidated financial schedules presented:
	Note 1: The conversion of Renminbi (RMB) into U.S. dollars (USD) is based on the certified exchange rate of USD1.00=RMB6.4566 on June 30, 2021 published by the Federal Reserve Board.

 

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SOURCE Trip.com Group Limited

FAQ

What were Trip.com Group's second quarter earnings results for 2021?

Trip.com Group reported net revenue of RMB5.9 billion (US$912 million) for Q2 2021, with a net loss of RMB647 million (US$100 million).

How did Trip.com Group's corporate travel revenue perform in Q2 2021?

Corporate travel revenue grew 141% year-over-year in Q2 2021.

What is the stock symbol for Trip.com Group?

The stock symbol for Trip.com Group is TCOM.

What are Trip.com Group's future outlook and growth plans?

Trip.com Group aims to focus on its domestic market while responding to evolving traveler demands post-pandemic.