What Is Driving Trip.com Group Ltd (NASDAQ: TCOM) Stock?

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Trip.com Group Ltd (NASDAQ: TCOM) stock rose over 3.9% on 28th September, 2020 (as of  1:00 pm GMT-4; Source: Google finance) post second quarter FY20 performance. The company continued to show strong momentum of recovery in the China domestic market. The reservations for China domestic hotels have achieved positive growth, with high-end domestic hotels leading the way over the past month. China domestic flight reservations also have achieved positive growth over the past months.

Trip.com: Flights, Hotels, Train & Travel Deals - Apps on Google Play

The company reported non-GAAP net loss attributable to Trip.com Group’s shareholders of RMB1.2 billion (US$162 million), compared to net income of RMB1.3 billion in the same period in 2019 and net loss of RMB2.2 billion in the previous quarter. The company delivered non-GAAP loss from operations was RMB200 million (US$27 million), compared to income of RMB1.7 billion in the same period in 2019 and loss of RMB1.2 billion in the previous quarter. At the end of June, 2020, the balance of cash and cash equivalents, restricted cash, short-term investment, held to maturity time deposit and financial products was RMB64.3 billion (US$9.1 billion).

The company had reported 64 percent fall in the adjusted revenue to Rmb 3.2 Billion in the second quarter of FY 20, beating the analysts’ estimates for revenue of Rmb 2.33 Billion, according to Refinitiv Ibes Data. The company delivered non-GAAP operating margin was -6%, compared to 20% in the same period in 2019 and -25% in the previous quarter.

Moreover, Accommodation reservation revenue for the second quarter of 2020 was RMB1.3 billion (US$178 million), which reflects a 63% decline from the same period in 2019, and a 9% rise from the previous quarter, mainly due to the recovery of China domestic market. Transportation ticketing revenue for the second quarter of 2020 was RMB1.2 billion (US$163 million), which reflects a 66% decline from the same period in 2019, and a 52% decline from the previous quarter. Packaged-tour revenue for the second quarter of 2020 was RMB130 million (US$18 million), which reflects a whopping 88% decline from the same period in 2019, and a 75% decline from the previous quarter. Corporate travel revenue for the second quarter of 2020 was RMB162 million (US$23 million), which reflects a 47% fall from the same period in 2019, and a 29% rise from the previous quarter, mainly due to the recovery of China domestic market.

Due to continued negative impact due to COVID-19 in the third quarter of 2020, the company projects net revenue to decline by approximately 47%-52% year-over-year for the third quarter of 2020.

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