Trip posts profit as domestic travel recovers
Trip.com, formerly Ctrip, posted a net profit of 1 billion yuan (US$156 million) for last year’s fourth quarter, the second quarter of profitability since the coronavirus outbreak, China’s biggest travel agency said on Thursday.
The domestic travel business had shown a “strong recovery momentum” and international tourism is expected to recover as more people are vaccinated and the weather gets warmer, the Nadaq-listed company said.
Trip’s fourth-quarter profit compared with 2 billion yuan a year ago. Revenue in the quarter was 5 billion yuan, a 40 percent decrease from the previous year ago, but narrowing from the decrease of 48 percent in the previous quarter, according to the Shanghai-based company.
"2020 was a challenging year,” James Liang, executive chairman, said in a statement, "while at the same time, we remain ambitious with a global vision to drive our sustainable growth post pandemic.”
Investment bank Piper Jaffray has upgraded Trip’s target price to US$47 from the previous target of US$40, compared with its current price of US$39.8.
The global tourism industry faces a total loss of US$1.3 trillion in 2020 because of the pandemic, according to media reports.
For the full year of 2020, Trip’s revenue reached 18.3 billion yuan with a gross merchandise value of 395 billion, ranking No. 1 in the world. GMV is an index measuring business for Internet service providers.
The company noted a booming demand for domestic air travel and hotel accommodation, with high-end hotel sales enjoying “double-digit” growth.