TCOM
China hits travel platform Trip.com with $765M in penalties over monopoly abuses
Article Summary
SELL- Trip.com Group Ltd ADR (NYSE: TRIP) was hit with nearly 5.2 billion yuan ($765 million) in penalties from China's State Administration for Market Regulation for monopolistic conduct, with Trip.com Group Ltd ADR accused of restricting market competition through exclusive partnerships with some hotels and offering prioritized traffic allocation to them.
- The regulator said Trip.com had been abusing its dominant market position in the sector since as early as 2020, prohibited some hotels from collaborating with competing platforms, demanded some hotel operators operating on multiple platforms to ensure rates for their platform were lowest available online, and prohibited cross-platform collaboration.
- The company was also asked to refund about 122 million yuan ($18 million) which it was withholding from hotel operators, while confiscating more than 1.6 billion yuan in illegal gains and imposing a fine of over 3.5 billion yuan $520 million.
- The group, which runs Ctrip and Skyscanner among other brands, acknowledged the decision in a statement, adding it sincerely accepts and will resolutely comply with the penalties.
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Growth Stock Scoring Breakdown
| METRIC | VALUE | WEIGHT | ANALYSIS |
|---|---|---|---|
| Sales Growth TTM ? | 19.3% | 25% | 60.0 ptsModerate (19.3%) - Decent growth |
| EPS Growth Next 5Y ? | -11.5% | 25% | 0.0 ptsNegative (-11.5%) - Declining expectations |
| Target Price Upside ? | 39.3% | 20% | 85.0 ptsLarge Upside (39.3%) - Target: $60.79 vs Current: $43.64 |
| Gross Margin % ? | 80.3% | 15% | 100.0 ptsExceptional (80.3%) - Strong pricing power |
| Drawdown from 52-Wk High ? | -44.8% | 15% | 80.0 ptsSolid Dip (-44.8%) - Good entry zone |
Disclaimer: This rating is for informational purposes only and is not financial advice.
All data sourced from Finviz.
Always conduct your own research and consult with a financial advisor before making investment decisions.
Past performance does not guarantee future results.
About TCOM
- Trip.com Group Limited, through its subsidiaries, operates as a travel service provider for accommodation reservation, transportation ticketing, packaged tours, in-destination, corporate travel management, and other travel-related services in China and internationally.
- It acts as an agent for hotel-related transactions and selling air tickets, as well as provides train, long-distance bus, and ferry tickets; travel insurance products, such as flight delay, air accident, and baggage loss coverage; and air-ticket delivery, online check-in and seat selection, express security screening, real-time flight status tracker, and airport VIP lounge services.
- The company also provides travelers bundled packaged-tour products, such as group, semi-group, and customized and packaged tours with various transportation arrangements, including air, cruise, bus, and car rental services.
- In addition, it offers integrated transportation and accommodation services; ticket, activity, insurance, visa, and tour guide services; and user support, supplier management, and customer relationship management services; and in-destination products and services.
- Further, the company provides Trip.Biz, a digital first, full-service, corporate travel management business which provides technology-enabled solutions for organizations managing business travel.
- Additionally, it offers online advertising and financial services, such as marketing planning and travel media services; Omni-Channel Touchpoints for Users; and Open Platform for Ecosystem Partners.
- It operates under the Ctrip, Qunar, Trip.com, Travix, Travelfusion, and Skyscanner brand names.
- The company was formerly known as Ctrip.com International, Ltd. and changed its name to Trip.com Group Limited in October 2019.
- Trip.com Group Limited was founded in 1999 and is based in Singapore.