Shares in Trip.com Group, China’s largest on-line travel service, ended last week higher after company said first-quarter earnings reversed to a profit after a big Covid-19-related loss a year earlier.
Its Hong Kong-traded shares closed at HK$318.80 on Friday, compared with HK$278.60 a week earlier. That was also a big gain from the HK$268 share price from a seconding listing at the Hong Kong Stock Exchange on April 19 that raised $1.3 billion. At the Nasdaq, where it went public back in 2003 when the business was known as Ctrip, Trip.com ended the week at $39.77, up from $37.51 a week earlier.
Net income for the first quarter of 2021 was 1.8 billion yuan, or $273 million, compared to a loss of about $818 million in the same period in 2020 at the peak of the Covid-19 outbreak in China, the company said on Tuesday. First-quarter revenue fell 13% from a year earlier to $628 million amid a decline in cross-border travel.
“Since the beginning of 2021, a few waves of COVID-19 infections have re-emerged in various regions of China, and precautionary measures, including varying levels of travel restrictions and encouragement of reduced travel during the Chinese New Year, have been reinstated in China,” the company said in a press release on Tuesday. “These travel restrictions reduced users’ demand for the company’s products, and materially and adversely affected its results of operations in January and February of 2021.” The company said its domestic travel business improved afterward.
Trip.com’s U.S.-traded shares have now soared by approximately 80% from their lows during the worst of the pandemic at the beginning of 2020. JP Morgan, an underwriter of the company’s Hong Kong offering, said in a research report in March the company stood to “benefit from increasing COVID-19 vaccinations in the coming quarters, which will drive its international business back to positive growth” by 2022, and gave the U.S.-traded shares a price target of $50.
Shareholders benefitting from the recovery in prices include Baidu, which owns about 11% of Trip.com. The company’s co-founders include billionaires Neil Shen, currently the founding and managing partner of Sequoia China, and Ji Qi, CEO of U.S. listed hotel company Huazhu Group.
Trip.com’s CEO is Jane Sun, a repeat member of an annual list of China’s most successful businesswomen published annually by Forbes China, the Chinese-language edition of Forbes.
Trip.com ranked No. 1,416 on the Forbes Global 2000 list published earlier this month.
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