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.

TCOM's 2Q26 results were inline, with group revenue +6% yoy to Rmb15.7bn and EBIT -4% yoy to Rmb4.4bn, broadly in line with Visible Alpha consensus of Rmb15.6/4.2bn. Headline net loss of -Rmb2.5bn included a -Rmb5.18bn anti-monopoly penalty imposed by SAMR; excluding this, mark-to-market losses on equity investments and share-based compensation, non-GAAP net profit fell -4% yoy to Rmb4.8bn while EPS grew +1% yoy to Rmb7.27 given the ongoing US$5bn buyback reducing share count by 4%. Accommodation reservation revenue growth slowed to +6% yoy from +17% in 1Q26, transportation ticketing revenue fell -1% yoy, while other segment (advertisement, finance) grew +24% yoy. Management guides 3Q26 revenue growth of +1-6% yoy to Rmb18.6-19.5bn, with EBIT margin decline narrowing to -1.9-2.4pts yoy (vs. -3.6pts in 2Q26). We view the impact from the transition to a new hotel tiering system as not as bad as feared, with the hotel take rate appearing resilient as competition is unlikely to intensify s