Trip.com Group hit by RMB 3.5B fine, but upgraded to cautious buy on strong travel growth and eased regulations

Trip.com Group faces a RMB 3.5 billion antitrust fine and RMB 1.6 billion confiscation, impacting its Q2 financial results. New regulations require the company to remove hotel exclusivity and automatic price adjustments, raising concerns about its market share and revenue take rate. Despite these challenges, Trip.com benefits from strong Chinese travel demand, with international bookings growing 65%. The stock is upgraded to a cautious buy due to eased regulatory uncertainty and attractive valuation at about 9 times projected 2027 earnings.