Trip.com: Antitrust Overhang Is a Short-Term Headwind — Controlled Long Trade Looks Attractive

Hook / Thesis

Trip.com (TCOM) is showing up on my screen as a tactical long. The company runs the dominant online travel agency (OTA) platform in China, derives roughly 79% of 2024 sales from accommodation reservations and transportation ticketing, and stands to benefit as Chinese passport penetration (around 12%) converts into higher-margin international travel over the next few years.

That fundamental story is intact. What has changed is sentiment: an antitrust/regulatory overhang has pushed the shares down from recent ranges and created a buying opportunity for traders who want to lean into a structurally favorable travel recovery while sizing for event risk. The stock is trading around $59.8 today (last trade 01/16/2026), down from recent closes near $61.3, and well below the mid-year highs in the 70s. That gap compresses the risk/reward for a disciplined long.

Why the market should care - the business case

Trip.com is the largest OTA in China, with the bulk of its revenue coming from accommodations and transport ticketing (about 79% of sales in 2024). Before the pandemic (2019) Trip.com had about 25% of revenue from international travel - that channel is important because international bookings historically carry higher gross margins and lower promotional intensity than domestic, improving group profitability as it scales. With Chinese passport penetration only at roughly 12%, there is a meaningful addressable market for outbound travel growth as incomes rise and travel resumes to pre-pandemic patterns.

Operationally, the company benefits from a large domestic user base and a growing international presence. The revenue mix and brand scale give Trip.com leverage as travel volumes recover and shift from domestic/low-yield bookings toward international and package sales, which are structurally more profitable.

Data points backing the thesis

• Revenue mix: roughly 79% of 2024 sales came from accommodation reservations and transportation ticketing — the core cash-generative part of the business.
• Pre-pandemic international exposure: ~25% of revenue in 2019, indicating an ability to scale higher-margin international bookings when outbound travel normalizes.
• Market trading context: last quoted price is $59.95 and the last trade printed at $59.81. The stock has traded as low as $52.52 this 12-month window and reached highs in the high-70s, illustrating volatility but also upside potential back toward prior consolidation.
• Shareholder returns: the company has paid cash dividends historically and declared a cash dividend of $0.30 with ex-date 03/17/2025 and pay date 04/04/2025, showing a willingness to return cash when appropriate.

Valuation framing

There are no peer valuation numbers in the dataset provided here, so valuation should be considered qualitatively and relative to Trip.com's own recent trading history. The stock is trading well below its recent peak in the high-70s and near the mid-$50s to low-$60s range that acted as support earlier in the year. That suggests the market has priced in regulatory uncertainty and likely a near-term hit to multiples.

Given Trip.com's dominant market position in China and the structural upside from increased outbound travel share and international bookings, a reversion to prior multiples is plausible if regulatory headlines stabilize. The current price compresses upside toward the 70s without requiring multiple expansion to justify moderate upside; deeper rerating toward the high-70s would require both demand momentum and clear regulatory resolution.

Trade idea - actionable plan

This is a trade idea for a disciplined, event-aware long. Treat it as a tactical swing: time horizon 3-6 months, position sized to event risk.

Entry: scale in between $58 and $61.50 (buy 50% in the $59-$61 zone; add remaining 50% on weakness toward $58).
Stop: $50 hard stop initial position (roughly 15% below $59.8) - tighten to $54 if volatility subsides and price holds above $62.
Targets:
  - Target 1: $68 (near-term recovery and resistance; ~14% from $59.8)
  - Target 2: $78 (retest of mid-cycle highs; ~30% from $59.8)
  - Target 3: $90 (upside case on strong demand + regulatory clarity, ~50% from $59.8)
Position size: small-to-moderate (10-25% of discretionary equity allocation), depending on portfolio risk tolerance.
Time horizon: swing (3-6 months); re-evaluate at each target and on regulatory developments.

Catalysts to drive the trade

• Regulatory clarity - any definitive statement or settlement that removes the antitrust overhang would likely trigger rapid multiple re-expansion.
• Improving outbound travel numbers - sequential strength in international bookings beyond seasonality will boost margins and investor confidence.
• Corporate capital returns - continued or renewed dividends/buybacks would support the equity case and reduce downside.
• Quarterly results showing margin improvement as international travel share rises back toward pre-pandemic levels (the earlier 25% international mix is the directional target).

Risks and counterarguments

Any long here must be sized for regulatory news risk. Below are the principal risks and a counterargument to the trade thesis:

• Regulatory escalation - Antitrust investigations or heavier-than-expected fines could materially damage earnings and investor sentiment and invalidate the near-term trade thesis.
• Demand shock - A slowdown in Chinese outbound travel growth (macro weakness, weaker consumer spending, or geopolitical frictions) would compress the international mix and margins.
• Competitive pressure - The OTA space in China is crowded (Meituan, Alibaba-backed Fliggy, Tongcheng, Qunar). Intense pricing competition could impede margin recovery even as volumes return.
• Event-driven volatility - The stock historically shows sharp intraday moves on news (indeed, the year includes swings from the low-50s to the high-70s). Stop discipline is essential.
• Counterargument: The market's regulatory concern might be justified and persistent; if regulators impose structural remedies or ongoing oversight, the multiple compression could be permanent and the company's growth trajectory impaired. In that scenario, buying into the headline is risky until the legal/regulatory picture is fully resolved.

What would change my mind

I will reassess my view if any of the following occur:

• Clear evidence of regulatory escalation (formal charges, multi-quarter restrictions, or large fines) that materially changes profitability assumptions.
• Sustained deterioration in booking trends, especially a failure of international booking growth to recover toward pre-pandemic proportions.
• Management signals permanent changes to unit economics (higher customer acquisition costs or lower take rates) that undermine margin recovery even at higher volumes.

Execution notes and practicalities

If you enter, build the position with limit orders in the specified bands and size strictly to your risk tolerance. The setup is tactical: the fundamental growth story is intact but event-led volatility is the defining short-term risk. Keep watch on quarterly commentary about international bookings and any corporate announcements related to regulatory matters.

For investors who prefer less event risk, waiting for a clear regulatory statement or confirmation of sequential international booking strength before adding exposure is prudent.

Bottom line

Trip.com looks like an asymmetric tactical buy here: the company has durable demand exposure to China's long-term outbound travel growth and a high-margin international revenue lever, while the stock currently reflects a regulatory discount. With disciplined sizing, a $50 stop and staged entries between $58 and $61.50, the trade offers a favorable risk/reward across a 3-6 month horizon. That said, this is an event-sensitive trade: respect stops and be prepared for headline-driven whipsaws.

Disclosure: This is a trade idea, not personalized investment advice. Position sizing should reflect individual risk tolerance and portfolio constraints.