China’s economy has been battered by a property crisis and weak financial markets in recent times. Chinese tourists, however, are embracing travel like never before, and the tourism boom could boost the fortunes of the country’s home-grown travel solutions provider, Trip.com (NASDAQ:TCOM) (HK:9961).
China’s Booming Travel Trends
In fact, tourism trends in China are so robust that spending on travel is set to exceed pre-COVID-19 pandemic levels for the first time this year. According to the World Travel and Tourism Council, Chinese holiday-goers are expected to spend around 1.8 trillion yuan on international trips this year. Their travel to neighboring destinations is set to reach 6.79 trillion yuan, as per Oxford Economics.
Another factor fueling this trend is relaxed visa norms by China for visitors from neighboring countries such as Thailand and Malaysia. The trend could substantially boost the fortunes of Trip.com.
Could Boost TCOM’s Fortunes
Recently, TCOM posted a 29% jump in its first-quarter top line on the back of buoyant travel trends. Its earnings per American Depository Share (EPADS) nearly doubled compared to the prior-year period, reaching $0.83. Notably, TCOM’s outbound hotel and air bookings jumped by over 100% during the quarter. It’s not surprising, then, that TCOM is among the three best Chinese stocks to buy this month, according to analysts.
What Is the Target Price for TCOM Stock?
The company’s shares have rallied by nearly 54% over the past six months. Overall, the Street has a Strong Buy consensus rating on the stock, alongside an average TCOM price target of $68.06. This points to a further 32.4% potential upside in TCOM stock.
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