Trip.com Group (TCOM): 2Q26 results inline - Impact from its transition to new hotel tiering system not as bad as feared. Trough valuation. Macro still the key risk.

As with Tongcheng (Aug 25) and other travel names (H World, Atour, BTG, Jinjiang), TCOM's 2Q26 results were affected by the broader weakness in domestic and outbound travel amid heightened airfares and poor weather in select regions, in addition to its gradual transition to a new-tiering hotel take rate system after terminating the previous "Premium/gold hotel" arrangements (特牌/金牌酒店). Headline net loss of -Rmb2.5bn included a -Rmb5.18bn anti-monopoly penalty charge imposed by the SAMR. Excluding this as well as mark-to-market loss from equity investments and share-based compensation, non-GAAP net profit fell -4% yoy to Rmb4.8bn while EPS maintained modest +1% yoy growth to Rmb7.27. Group revenue and EBIT softened to +6%/-4% yoy to Rmb15.7bn/Rmb4.4bn respectively in 2Q26 (vs. +17%/+15% yoy in 1Q26), broadly inline with consensus estimates of Rmb15.6/Rmb4.2bn. EBIT margin dropped -3.6pts yoy to 27.9%. Overall, TCOM guides +1-6% yoy revenue growth in 3Q26, driven by resilient internationa