Form 6-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of November 2019

Commission File Number: 001-33853

 

 

TRIP.COM GROUP LIMITED

(Registrant’s Name)

 

 

968 Jin Zhong Road

Shanghai 200335, People’s Republic of China

(Address of Principal Executive Offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F  ☒             Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

 

 

 


EXHIBIT INDEX

 

Exhibit
No.

  

Description

99.1    Press Release—Trip.com Group Reports Unaudited Third Quarter of 2019 Financial Results


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

TRIP.COM GROUP LIMITED
By   :  

/s/Cindy Xiaofan Wang

Name   :   Cindy Xiaofan Wang
Title   :   Chief Financial Officer

Date: November 14, 2019

EX-99.1

Exhibit 99.1

 

 

Trip.com Group Limited Reports Unaudited Third Quarter of 2019 Financial Results

Shanghai, China, November 13, 2019 - Trip.com Group Limited (Nasdaq: TCOM) (“Trip.com Group” or the “Company”), a leading provider of online travel and related services, including accommodation reservation, transportation ticketing, packaged tours and in-destination services, corporate travel management, and other travel-related services, today announced its unaudited financial results for the third quarter ended September 30, 2019.

Key Highlights for the Third Quarter of 2019

 

   

The Company officially changed its corporate name to “Trip.com Group Limited” on October 25, 2019 and its ticker to “TCOM” on November 5, 2019. Trip.com Group operates a family of travel brands, which mainly consists of Trip.com, Ctrip, Skyscanner and Qunar.

 

   

Trip.com Group reported strong financial results for the third quarter of 2019.

 

   

Income from operations increased by 52% year-over-year to RMB2.2 billion (US$314 million). Excluding share-based compensation charges, non-GAAP income from operations increased by 40% year-over-year to RMB2.6 billion (US$369 million) in the third quarter of 2019.

 

   

Operating margin was 21% for the third quarter of 2019, compared to 16% in the same period in 2018, and 15% in the previous quarter. Excluding share-based compensation charges, non-GAAP operating margin reached 25%, the highest margin over the past 6 years.

 

   

Trip.com Group’s international businesses (excluding Greater China destinations) sustained robust growth momentum.

 

   

The year-over-year revenue growth rate of international hotel business (excluding Greater China destinations) reached 50% in the third quarter of 2019.

 

   

Trip.com brand’s international air ticketing volume maintained triple digit growth for the 12th consecutive quarter.

Third Quarter of 2019 Financial Results and Business Updates

For the third quarter of 2019, Trip.com Group reported net revenue of RMB10.5 billion (US$1.5 billion), representing a 12% increase from the same period in 2018. Net revenue for the third quarter of 2019 increased by 21% from the previous quarter.

Accommodation reservation revenue for the third quarter of 2019 was RMB4.1 billion (US$576 million), representing a 14% increase from the same period in 2018, primarily due to our brand’s extensive global reach, expansion in our global product portfolio, and provision of diversified accommodation choices to prospective customers. Accommodation reservation revenue for the third quarter of 2019 increased by 21% from the previous quarter, primarily due to seasonality.

Transportation ticketing revenue for the third quarter of 2019 was RMB3.7 billion (US$521 million), representing a 3% increase from the same period in 2018, primarily due to an increase in international air ticketing and ground transportation ticketing demands. Transportation ticketing revenue for the third quarter of 2019 increased by 9% from the previous quarter, primarily due to seasonality.


Packaged-tour revenue for the third quarter of 2019 was RMB1.6 billion (US$229 million), representing a 19% increase from the same period in 2018, primarily driven by a significant increase in traffic generated from offline stores and further penetration in lower-tier cities in China. Packaged-tour revenue for the third quarter of 2019 increased by 56% from the previous quarter, primarily due to seasonality.

Corporate travel revenue for the third quarter of 2019 was RMB335 million (US$47 million), representing a 26% increase from the same period in 2018, primarily driven by expansion in corporate customer base and an optimized product mix trend. Corporate travel revenue for the third quarter of 2019 increased by 9% from the previous quarter, primarily due to seasonality.

Gross margin was 79% for the third quarter of 2019, which remained consistent with that for the same period in 2018 and the previous quarter.

Product development expenses for the third quarter of 2019 increased by 12% to RMB2.8 billion (US$390 million) from the same period in 2018 and increased by 6% from the previous quarter, primarily due to an increase in expenses relating to product development personnel. Product development expenses for the third quarter of 2019 accounted for 27% of the net revenue for the same period. Excluding share-based compensation charges, non-GAAP product development expenses for the third quarter of 2019 accounted for 25% of the net revenue for the same period, which increased from 24% in the same period in 2018 and decreased from 28% in the previous quarter.

Sales and marketing expenses for the third quarter of 2019 decreased by 8% to RMB2.5 billion (US$347 million) from the same period in 2018, primarily due to a decrease in expenses relating to sales and marketing activities. Sales and marketing expenses increased by 18% from the previous quarter, primarily due to an increase in expenses relating to sales and marketing activities. Sales and marketing expenses for the third quarter of 2019 accounted for 24% of the net revenue for the same period. Excluding share-based compensation charges, non-GAAP sales and marketing expenses for the third quarter of 2019 accounted for 23% of the net revenue for the same period, which decreased from 29% in the same period in 2018 and 24% in the previous quarter.

General and administrative expenses for the third quarter of 2019 increased by 18% to RMB809 million (US$113 million) from the same period in 2018, primarily due to an increase in general and administrative personnel related expenses. General and administrative expenses remained consistent with the previous quarter. General and administrative expenses for the third quarter of 2019 accounted for 8% of the net revenue for the same period. Excluding share-based compensation charges, non-GAAP general and administrative expenses accounted for 6% of the net revenue for the same period, which remained consistent with those for the same period in 2018 and decreased from 8% in the previous quarter.

Income from operations for the third quarter of 2019 was RMB2.2 billion (US$314 million), compared to RMB1.5 billion in the same period in 2018 and RMB1.3 billion in the previous quarter. Income from operations increased by 52% year-over-year in the third quarter of 2019. Excluding share-based compensation charges, non-GAAP income from operations was RMB2.6 billion (US$369 million), compared to RMB1.9 billion in the same period in 2018 and RMB1.7 billion in the previous quarter. Non-GAAP income from operations increased by 40% year-over-year in the third quarter of 2019.


Operating margin was 21% for the third quarter of 2019, compared to 16% in the same period in 2018, and 15% in the previous quarter. Excluding share-based compensation charges, non-GAAP operating margin was 25%, compared to 20% in the same period in 2018 and in the previous quarter.

Income tax expense for the third quarter of 2019 was RMB365 million (US$51 million), compared to RMB257 million in the same period of 2018 and RMB336 million in the previous quarter. The change in our effective tax rate was primarily due to changes in the profitability of our subsidiaries that have different tax rates, including certain non-deductible expenses of the fair value changes in equity securities investments.

Net income attributable to Trip.com Group’s shareholders for the third quarter of 2019 was RMB793 million (US$112 million), compared to net loss attributable to Trip.com Group’s shareholders of RMB1.1 billion in the same period in 2018 and RMB403 million in the previous quarter. Excluding share-based compensation charges and fair value changes of equity securities investments, non-GAAP net income attributable to Trip.com Group’s shareholders was RMB2.3 billion (US$317 million), compared to RMB1.7 billion in the same period in 2018 and RMB1.3 billion in the previous quarter.

Diluted earnings per ADS were RMB1.35 (US$0.19) for the third quarter of 2019. Excluding share-based compensation charges and fair value changes of equity securities investments, non-GAAP diluted earnings per ADS were RMB3.70 (US$0.52) for the third quarter of 2019.

As of September 30, 2019, the balance of cash and cash equivalents, restricted cash, short-term investment, held to maturity time deposit and financial products was RMB61.0 billion (US$8.5 billion).

Business Outlook

For the fourth quarter of 2019, the Company expects the net revenue growth to continue at a year-over-year rate of approximately 8-13%. This forecast reflects Trip.com Group’s current and preliminary view, which is subject to change.

Conference Call

Trip.com Group’s management team will host a conference call at 7:00PM U.S. Eastern Time on November 13, 2019 (or 8:00AM on November 14, 2019 in the Shanghai/Hong Kong Time) following the announcement.

The conference call will be available on Webcast live and replay at: https://investors.trip.com The call will be archived for twelve months at this website.


Listeners may access the call by dialing the following numbers:

 

US:   1-855-881-1339 or 1-914-202-3258
Hong Kong:   800-966-806
Mainland China:   400-120-0659
International:   +61-731-454-010
Passcode:   10002551

For pre-registration, please click

https://s1.c-conf.com/diamondpass/Ctrip-10002551-invite.html

A telephone replay of the call will be available after the conclusion of the conference call until November 21, 2019.

The dial-in details for the replay:

International dial-in number:   +61-7-3107-6325

Passcode:                                   10002551

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “may,” “will,” “expect,” “anticipate,” “future,” “intend,” “plan,” “believe,” “estimate,” “is/are likely to,” “confident” or other similar statements. Among other things, quotations from management and the Business Outlook section in this press release, as well as Trip.com Group’s strategic and operational plans, contain forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, severe or prolonged downturn in the global or Chinese economy, general declines or disruptions in the travel industry, volatility in the trading price of Trip.com Group’s ADSs, Trip.com Group’s reliance on its relationships and contractual arrangements with travel suppliers and strategic alliances, failure to compete against new and existing competitors, failure to successfully manage current growth and potential future growth, risks associated with any strategic investments or acquisitions, seasonality in the travel industry in the relevant jurisdictions where Trip.com Group operates, failure to successfully develop Trip.com Group’s existing or future business lines, damage to or failure of Trip.com Group’s infrastructure and technology, loss of services of Trip.com Group’s key executives, adverse changes in economic and political policies of the PRC government, inflation in China, risks and uncertainties associated with PRC laws and regulations with respect to the ownership structure of Trip.com Group’s affiliated Chinese entities and the contractual arrangements among Trip.com Group, its affiliated Chinese entities and their shareholders, and other risks outlined in Trip.com Group’s filings with the U.S. Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of the issuance, and Trip.com Group does not undertake any obligation to update any forward-looking statement, except as required under applicable law.


About Non-GAAP Financial Measures

To supplement Trip.com Group’s unaudited condensed consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles (“GAAP”), Trip.com Group uses Non-GAAP financial information related to product development expenses, sales and marketing expenses, general and administrative expenses, income from operations, operating margin, net income attributable to Trip.com Group’s shareholders, and diluted earnings per ordinary share and per ADS, each of which (except for net commission earned) is adjusted from the most comparable GAAP result to exclude the share-based compensation charges recorded under ASC 718, “Compensation-Stock Compensation” and its share-based compensation charges are not tax deductible, and fair value changes of equity securities investments, net of tax, recorded under ASU 2016-1. Trip.com Group’s management believes the Non-GAAP financial measures facilitate better understanding of operating results from quarter to quarter and provide management with a better capability to plan and forecast future periods.

Non-GAAP information is not prepared in accordance with GAAP and may be different from Non-GAAP methods of accounting and reporting used by other companies. The presentation of this additional information should not be considered a substitute for GAAP results. A limitation of using Non-GAAP financial measures is that Non-GAAP measures exclude share-based compensation charges and fair value changes of equity securities investments that have been and will continue to be significant recurring expenses in Trip.com Group’s business for the foreseeable future.

Reconciliations of Trip.com Group’s Non-GAAP financial data to the most comparable GAAP data included in the consolidated statement of operations are included at the end of this press release.

About Trip.com Group Limited

Trip.com Group Limited (Nasdaq: TCOM) is a leading one-stop travel service provider consisting of Trip.com, Ctrip, Skyscanner, and Qunar. Across its platforms, Trip.com Group enables local partners and travelers around the world to make informed and cost-effective bookings for travel products and services, through aggregation of comprehensive travel-related information and resources, and an advanced transaction platform consisting of mobile apps, Internet websites, and 24/7 customer service centers. Founded in 1999 and listed on Nasdaq in 2003, Trip.com Group has become one of the largest travel companies in the world in terms of gross merchandise value.

For further information, please contact:

Investor Relations

Trip.com Group Limited

Tel: +86 (21) 3406-4880 X 12229

Email: iremail@trip.com


Trip.com Group Limited

Unaudited Consolidated Balance Sheets

(In millions, except share and per share data)

 

     December 31, 2018      September 30, 2019      September 30, 2019  
   RMB (million)      RMB (million)      USD (million)  
  

 

 

    

 

 

    

 

 

 
     (unaudited)      (unaudited)      (unaudited)  

ASSETS

        

Current assets:

        

Cash and cash equivalents

     21,530        18,330        2,565  

Restricted cash

     4,244        3,905        546  

Short-term investments

     36,753        26,069        3,647  

Accounts receivable, net

     5,668        9,295        1,300  

Prepayments and other current assets

     11,199        17,979        2,515  

Total current assets

     79,394        75,578        10,573  

Long-term deposits and prepayments

     768        594        83  

Land use rights

     94        92        13  

Property, equipment and software

     5,872        5,978        836  

Investments

     26,874        47,647        6,666  

Goodwill

     58,026        57,915        8,103  

Intangible assets

     13,723        13,281        1,858  

Other long-term receivable

     229        26        4  

Right-of-use asset*

     —          993        139  

Deferred tax assets

     850        979        137  

Total assets

     185,830        203,083        28,412  

LIABILITIES

        

Current liabilities:

        

Short-term debt and current portion of long-term debt

     36,011        36,751        5,142  

Accounts payable

     11,714        13,386        1,873  

Salary and welfare payable

     3,694        4,387        614  

Taxes payable

     1,019        1,367        191  

Advances from customers

     9,472        9,944        1,391  

Accrued liability for customer reward program

     528        471        66  

Other payables and accruals*

     6,346        7,812        1,093  

Total current liabilities

     68,784        74,118        10,370  

Deferred tax liabilities

     3,838        3,624        507  

Long-term debt

     24,146        20,600        2,882  

Other long-term liabilities

     329        257        36  

Long-term lease liability*

     —          653        91  

Total liabilities

     97,097        99,252        13,886  

MEZZANINE EQUITY

        

Redeemable non-controlling interests

     —          1,122        157  

SHAREHOLDERS’ EQUITY

        

Total Trip.com Group Limited shareholders’ equity

     86,715        100,662        14,083  

Non-controlling interests

     2,018        2,047        286  

Total shareholders’ equity

     88,733        102,709        14,369  

Total liabilities, mezzanine equity and shareholders’ equity

     185,830        203,083        28,412  

 

*

The Company adopted ASU No. 2016-02 and ASU No.2018-11, “Leases,” beginning January 1, 2019 and elected to utilize the additional transition method which allowed the Company to initially apply the new lease standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings of 2019, with no adjustments to prior periods and no cumulative effect to the opening balance of retained earnings. The adoption of the new guidance did not have a material effect on our results of operations, financial condition or liquidity.

 

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Trip.com Group Limited

Unaudited Consolidated Statements of Comprehensive Income

(In millions, except share and per share data)

 

     Quarter Ended     Quarter Ended     Quarter Ended     Quarter Ended  
   September 30, 2018     June 30, 2019     September 30, 2019     September 30, 2019  
   RMB (million)     RMB (million)     RMB (million)     USD (million)  
  

 

 

   

 

 

   

 

 

   

 

 

 
     (unaudited)     (unaudited)     (unaudited)     (unaudited)  

Revenue:

        

Accommodation reservation

     3,627       3,410       4,117       576  

Transportation ticketing

     3,621       3,407       3,721       521  

Packaged-tour

     1,378       1,051       1,638       229  

Corporate travel

     267       309       335       47  

Others

     503       524       688       96  

Total revenue

     9,396       8,701       10,499       1,469  

Less: Sales tax and surcharges

     (41     (10     (23     (3

Net revenue

     9,355       8,691       10,476       1,466  

Cost of revenue

     (1,991     (1,798     (2,157     (302

Gross profit

     7,364       6,893       8,319       1,164  

Operating expenses:

        

Product development ***

     (2,491     (2,642     (2,790     (390

Sales and marketing ***

     (2,705     (2,108     (2,478     (347

General and administrative ***

     (688     (810     (809     (113

Total operating expenses

     (5,884     (5,560     (6,077     (850

Income from operations

     1,480       1,333       2,242       314  

Interest income

     521       562       509       71  

Interest expense

     (393     (426     (423     (59

Other loss **

     (2,625     (1,412     (1,349     (189

(Loss)/income before income tax expense, equity in income of affiliates and non-controlling interests

     (1,017     57       979       137  

Income tax expense **

     (257     (336     (365     (51

Equity in income/(loss) of affiliates

     169       (123     206       29  

Net (loss)/income

     (1,105     (402     820       115  

Net (income)/loss attributable to non-controlling interests

     (34     7       (18     (2

Accretion to redemption value of redeemable non-controlling interests

           (8     (9     (1

Net (loss)/ income attributable to Trip.com Group Limited

     (1,139     (403     793       112  

Comprehensive (loss)/income attributable to Trip.com Group Limited **

     (1,561     (308     477       67  

(Losses)/earnings per ordinary share

        

- Basic

     (16.62     (5.81     11.19       1.57  

- Diluted

     (16.62     (5.81     10.83       1.52  

(Losses)/earnings per ADS

        

- Basic

     (2.08     (0.73     1.40       0.20  

- Diluted

     (2.08     (0.73     1.35       0.19  

Weighted average ordinary shares outstanding

        

- Basic

     68,518,501       69,484,264       70,979,652       70,979,652  

- Diluted

     68,518,501       69,484,264       75,203,352       75,203,352  

- Diluted-non GAAP

     80,394,301       77,807,991       79,585,733       79,585,733  

*** Share-based compensation included in Operating expenses above is as follows:

 

   

Product development

     217       215       213       30  

Sales and marketing

     36       34       34       5  

General and administrative

     148       144       146       20  

** Fair value changes of equity securities investments included in Net (loss)/income is as follow:

 

 

Fair value loss of equity securities investments, net of tax

     2,470       1,339       1,076       150  

 

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Trip.com Group Limited

Reconciliation of GAAP and Non-GAAP Results

(In millions, except % and per share data)

 

     Quarter Ended September 30, 2019  
     GAAP Result     % of Net
Revenue
    Non-GAAP
Adjustment
     % of Net
Revenue
    Non-GAAP
Result
    % of Net
Revenue
 

Share-based compensation included in Operating expense is as follows:

 

          

Product development

     (2,790     -27     213        2     (2,577     -25

Sales and marketing

     (2,478     -24     34        0     (2,444     -23

General and administrative

     (809     -8     146        1     (663     -6
  

 

 

     

 

 

      

 

 

   

Total operating expenses

     (6,077     -58     393        4     (5,684     -54

Income from operations

     2,242       21     393        4     2,635       25

Fair value changes of equity securities investments, net of tax

     (1,076     -10     1,076        10     —         0

Net income attributable to Trip.com Group’s shareholders

     793       8     1,469        14     2,262       22

Diluted earnings per ordinary share (RMB)

     10.83         18.73          29.56    

Diluted earnings per ADS (RMB)

     1.35         2.35          3.70    

Diluted earnings per ADS (USD)

     0.19         0.33          0.52    
     Quarter Ended June 30, 2019  
     GAAP Result     % of Net
Revenue
    Non-GAAP
Adjustment
     % of Net
Revenue
    Non-GAAP
Result
    % of Net
Revenue
 

Share-based compensation included in Operating expense is as follows:

 

          

Product development

     (2,642     -30     215        2     (2,427     -28

Sales and marketing

     (2,108     -24     34        0     (2,074     -24

General and administrative

     (810     -9     144        2     (666     -8
  

 

 

     

 

 

      

 

 

   

Total operating expenses

     (5,560     -64     393        5     (5,167     -59

Income from operations

     1,333       15     393        5     1,726       20

Fair value changes of equity securities investments, net of tax

     (1,339     -15     1,339        15     —         0

Net (loss)/income attributable to Trip.com Group’s shareholders

     (403     -5     1,732        20     1,329       15

Diluted (losses)/earnings per ordinary share (RMB)

     (5.81       23.81          18.00    

Diluted (losses)/earnings per ADS (RMB)

     (0.73       2.98          2.25    

Diluted (losses)/earnings per ADS (USD)

     (0.11       0.43          0.33    
     Quarter Ended September 30, 2018  
     GAAP Result     % of Net
Revenue
    Non-GAAP
Adjustment
     % of Net
Revenue
    Non-GAAP
Result
    % of Net
Revenue
 

Share-based compensation included in Operating expense is as follows:

 

          

Product development

     (2,491     -27     217        2     (2,274     -24

Sales and marketing

     (2,705     -29     36        0     (2,669     -29

General and administrative

     (688     -7     148        2     (540     -6
  

 

 

     

 

 

      

 

 

   

Total operating expenses

     (5,884     -63     401        4     (5,483     -59

Income from operations

     1,480       16     401        4     1,881       20

Fair value changes of equity securities investments, net of tax

     (2,470     -26     2,470        26           0

Net (loss)/income attributable to Trip.com Group’s shareholders

     (1,139     -12     2,871        31     1,732       19

Diluted (losses)/earnings per ordinary share (RMB)

     (16.62       39.68          23.06    

Diluted (losses)/earnings per ADS (RMB)

     (2.08       4.96          2.88    

Diluted (losses)/earnings per ADS (USD)

     (0.30       0.72          0.42    

Notes for all the condensed consolidated financial schedules presented:

Note 1: The conversion of Renminbi (RMB) into U.S. dollars (USD) is based on the certified exchange rate of USD1.00=RMB7.1477 on September 30, 2019 published by the Federal Reserve Board.

 

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