REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of each class |
Trading Symbol |
Name of each exchange on which registered | ||
each representing 0.125 ordinary shares , par value US$0.01 per share |
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(Nasdaq Global Select Market) | ||
Ordinary shares, par value US$0.01 per share* |
* | Not for trading, but only in connection with the listing of American depositary shares on the Nasdaq Global Select Market. |
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☒ |
Accelerated filer |
☐ |
Non-accelerated filer |
☐ | |||||
Emerging growth company |
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† | The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012. |
☒ |
International Financial Reporting Standards as issued |
Other ☐ | ||
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by the International Accounting Standards Board ☐ |
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1 |
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2 |
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ITEM 1. |
2 |
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ITEM 2. |
2 |
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ITEM 3. |
2 |
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ITEM 4. |
34 |
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ITEM 4.A. |
49 |
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ITEM 5. |
49 |
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ITEM 6. |
67 |
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ITEM 7. |
76 |
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ITEM 8. |
80 |
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ITEM 9. |
81 |
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ITEM 10. |
81 |
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ITEM 11. |
89 |
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ITEM 12. |
90 |
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|
91 |
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ITEM 13. |
91 |
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ITEM 14. |
91 |
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ITEM 15. |
91 |
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ITEM 16A. |
92 |
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ITEM 16B. |
92 |
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ITEM 16C. |
92 |
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ITEM 16D. |
93 |
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ITEM 16E. |
93 |
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ITEM 16F. |
93 |
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ITEM 16G. |
93 |
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ITEM 16H. |
93 |
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|
93 |
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ITEM 17. |
93 |
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ITEM 18. |
93 |
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ITEM 19. |
94 |
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|
97 |
• | “ADSs” refers to American depositary shares, each of which represents 0.125 ordinary shares; |
• | “China” or “PRC” refers to the People’s Republic of China and, solely for the purpose of this annual report, excludes Taiwan, Hong Kong, and Macau, and “Greater China” refers to the People’s Republic of China, Taiwan, Hong Kong, and Macau; |
• | “Qunar” refers to Qunar Cayman Islands Limited, a Cayman Islands company, and unless the context requires otherwise, includes its predecessor entities and consolidated subsidiaries and consolidated affiliated Chinese entities; |
• | “Renminbi” or “RMB” refers to the legal currency of China; “U.S. dollars” or “US$” refers to the legal currency of the United States; and “ € ” refers to the legal currency of Eurozone; |
• | “shares” or “ordinary shares” refers to our ordinary shares, par value of US$0.01 per share; and |
• | “we,” “us,” “our company,” or “Trip.com Group” refers to Trip.com Group Limited (formerly known as Ctrip.com International, Ltd.), its predecessor entities and subsidiaries, and, in the context of describing our operations and consolidated financial information, its consolidated affiliated Chinese entities, unless otherwise indicated herein. We consolidate the financial results of Qunar starting from December 31, 2015. In calculating the number of hotels with which we have room supply relationships, downloads of and transactions through our mobile channel, and other operational data, where applicable, as well as in describing our marketing, branding, and intellectual properties, we have not taken into account the comparable operating data or other information of Qunar. |
ITEM 1. |
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS |
ITEM 2. |
OFFER STATISTICS AND EXPECTED TIMETABLE |
ITEM 3. |
KEY INFORMATION |
For the Year Ended December 31, |
||||||||||||||||||||||||
2015 |
2016 (1) (2) |
2017 (2) |
2018 (2) |
2019 |
||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||||
(in millions, except for share and per share data) |
||||||||||||||||||||||||
Selected Consolidated Statements of Income/(Loss) Data |
||||||||||||||||||||||||
Net revenues |
10,897 |
19,245 |
26,796 |
30,965 |
35,666 |
5,122 |
||||||||||||||||||
Cost of revenues |
(3,043 |
) | (4,730 |
) | (4,678 |
) | (6,324 |
) | (7,372 |
) | (1,059 |
) | ||||||||||||
Gross profit |
7,854 |
14,515 |
22,118 |
24,641 |
28,294 |
4,063 |
||||||||||||||||||
Operating expenses |
||||||||||||||||||||||||
—Product development (3) |
(3,297 |
) | (7,687 |
) | (8,259 |
) | (9,620 |
) | (10,670 |
) | (1,533 |
) | ||||||||||||
—Sales and marketing (3) |
(3,088 |
) | (5,861 |
) | (8,294 |
) | (9,596 |
) | (9,295 |
) | (1,335 |
) | ||||||||||||
—General and administrative (3) |
(1,088 |
) | (2,519 |
) | (2,622 |
) | (2,820 |
) | (3,289 |
) | (472 |
) | ||||||||||||
Total operating expenses |
(7,473 |
) | (16,067 |
) | (19,175 |
) | (22,036 |
) | (23,254 |
) | (3,340 |
) | ||||||||||||
Income/(Loss) from operations |
381 |
(1,552 |
) | 2,943 |
2,605 |
5,040 |
723 |
|||||||||||||||||
Net interest income/(expense) and other income/(expense) (4) |
2,624 |
(192 |
) | 581 |
(684 |
) | 4,047 |
581 |
||||||||||||||||
Income/(loss) before income tax expense and equity in (loss)/income of affiliates |
3,005 |
(1,744 |
) | 3,524 |
1,921 |
9,087 |
1,304 |
|||||||||||||||||
Income tax expense |
(470 |
) | (482 |
) | (1,285 |
) | (793 |
) | (1,742 |
) | (250 |
) | ||||||||||||
Equity in (loss)/income of affiliates |
(136 |
) | 602 |
(65 |
) | (32 |
) | (347 |
) | (50 |
) | |||||||||||||
Net income/(loss) |
2,399 |
(1,624 |
) | 2,174 |
1,096 |
6,998 |
1,004 |
|||||||||||||||||
Net loss/(income) attributable to non-controlling interests |
108 |
206 |
(19 |
) | 16 |
57 |
8 |
|||||||||||||||||
Accretion to redemption value of redeemable non-controlling interests |
— |
— |
— |
— |
(44 |
) | (6 |
) |
For the Year Ended December 31, |
||||||||||||||||||||||||
2015 |
2016 (1) (2) |
2017 (2) |
2018 (2) |
2019 |
||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||||
(in millions, except for share and per share data) |
||||||||||||||||||||||||
Selected Consolidated Statements of Income/(Loss) Data |
||||||||||||||||||||||||
Net income/(loss) attributable to Trip.com Group’s shareholders |
2,507 |
(1,418 |
) | 2,155 |
1,112 |
7,011 |
1,006 |
|||||||||||||||||
Earnings/(losses) per ordinary share data: |
||||||||||||||||||||||||
Earnings/(losses) per ordinary share (5) , basic |
66.34 |
(23.97 |
) | 32.51 |
16.25 |
98.78 |
14.19 |
|||||||||||||||||
Earnings/(losses) per ordinary share (5) , diluted |
56.85 |
(23.97 |
) | 30.75 |
15.67 |
92.02 |
13.22 |
|||||||||||||||||
Weighted average ordinary shares outstanding, basic |
37,797,698 |
59,166,582 |
66,300,808 |
68,403,426 |
70,983,996 |
70,983,996 |
||||||||||||||||||
Weighted average ordinary shares outstanding, diluted |
47,375,248 |
59,166,582 |
71,775,893 |
70,924,623 |
80,244,014 |
80,244,014 |
As of December 31, |
||||||||||||||||||||||||
2015 (1) |
2016 (2) |
2017 (2) |
2018 (2) |
2019 (6) |
||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||||
(in millions) |
||||||||||||||||||||||||
Selected Consolidated Balance Sheets Data |
||||||||||||||||||||||||
Cash and cash equivalents |
19,216 |
18,435 |
18,243 |
21,530 |
19,923 |
2,862 |
||||||||||||||||||
Restricted cash |
2,287 |
1,744 |
1,749 |
4,244 |
1,824 |
262 |
||||||||||||||||||
Short-term investments |
8,236 |
14,113 |
28,130 |
36,753 |
23,058 |
3,312 |
||||||||||||||||||
Current assets |
40,602 |
45,928 |
59,418 |
79,394 |
67,955 |
9,761 |
||||||||||||||||||
Investments (4) |
13,871 |
20,533 |
25,574 |
26,874 |
51,278 |
7,366 |
||||||||||||||||||
Total assets |
118,844 |
144,430 |
162,240 |
185,830 |
200,169 |
28,752 |
||||||||||||||||||
Current liabilities |
33,666 |
30,295 |
42,162 |
68,784 |
69,182 |
9,937 |
||||||||||||||||||
Long-term debt |
18,355 |
34,651 |
29,220 |
24,146 |
19,537 |
2,806 |
||||||||||||||||||
Total liabilities |
55,159 |
68,898 |
75,625 |
97,097 |
93,324 |
13,405 |
||||||||||||||||||
Redeemable non-controlling interests(7) |
— |
— |
— |
— |
1,142 |
164 |
||||||||||||||||||
Share capital |
4 |
5 |
5 |
5 |
6 |
1 |
||||||||||||||||||
Total Trip.com Group’s shareholders’ equity |
44,551 |
71,548 |
84,836 |
86,715 |
103,442 |
14,858 |
||||||||||||||||||
Non-controlling interests |
19,134 |
3,984 |
1,779 |
2,018 |
2,261 |
325 |
||||||||||||||||||
Total shareholders’ equity |
63,685 |
75,532 |
86,615 |
88,733 |
105,703 |
15,183 |
(1) | Our consolidated balance sheets data has reflected the effect of consolidation of Qunar’s financial statements starting from December 31, 2015. Our consolidated statements of income/(loss) data has reflected the effect of consolidation of Qunar’s financial statements starting from January 1, 2016. |
(2) | Effective from January 1, 2018, we adopted ASC Topic 606, a new accounting standard on the recognition of revenue issued by FASB in 2014, and have applied this accounting standard retrospectively to the years ended December 31, 2016 and 2017. The financial data for the year ended December 31, 2015 and as of December 31, 2015 has not been recast and as such is not comparable. |
(3) | Share-based compensation was included in the related operating expense categories as follows: |
|
For the Year Ended December 31, |
|||||||||||||||||||||||
|
2015 |
2016 (1) |
2017 |
2018 |
2019 |
2019 |
||||||||||||||||||
|
RMB |
RMB |
RMB |
RMB |
RMB |
US$ |
||||||||||||||||||
|
(in millions) |
|||||||||||||||||||||||
Product development |
292 |
2,080 |
1,013 |
934 |
919 |
132 |
||||||||||||||||||
Sales and marketing |
66 |
393 |
186 |
156 |
144 |
21 |
||||||||||||||||||
General and administrative |
285 |
1,087 |
635 |
617 |
651 |
94 |
(4) | In 2015, a gain of RMB2.3 billion was recognized in the other income for the deconsolidation of Tujia, which was once a subsidiary of our company. In 2017 and 2018, we also disposed of certain long-term investments and recognized a gain of RMB1.4 billion and RMB1.2 billion, respectively. In January 2018, we adopted a new financial instruments accounting standard ASU No. 2016-01, which requires equity investments to be measured at fair value with subsequent changes recognized in net income, except for those accounted for under the equity method or requiring consideration. Fair value changes for such equity investments were a fair value loss of RMB3.1 billion and a fair value gain of RMB2.3 billion for the years ended December 31, 2018 and 2019, respectively. See “Item 5. Operating and Financial Review and Prospectus — Results of Operations” for further information. The new standard also changes the accounting for investments without a readily determinable fair value and that do not qualify for the practical expedient to estimate fair value. A policy election can be made for these investments whereby investment will be carried at cost and adjusted in subsequent periods for any impairment or changes in observable prices of identical or similar investments. |
(5) | Each ADS represents 0.125 ordinary shares. |
(6) | Effective from January 1, 2019, we adopted ASC No. 2018-11, a new accounting standard on the recognition of right-of-use assets and lease liabilities issued by FASB in 2018, and have applied this accounting standard on a modified retrospective basis and have elected not to restate comparative periods. See Notes 2 and 11 to our audited consolidated financial statements included elsewhere in this annual report for further information. |
(7) | One of our subsidiaries issued redeemable preferred shares to certain third-party investors in 2019. These preferred shares are redeemable at a holder’s option when that subsidiary fails to complete a qualified IPO in a pre-agreed period of time since its issuance with a redemption price measured by 10% interest per annum. These preferred shares are therefore accounted for as redeemable non-controlling interests in mezzanine equity and are accreted to the redemption value over the period starting from the issuance date. |
• | In May 2015, we acquired approximately 38% share capital of eLong, Inc. In May 2016, eLong, Inc. completed its going-private transaction and merger with E-dragon Holdings Limited, or eLong. In December 2017, eLong and Tongcheng Network Technology Co., Ltd., or LY.com, announced an agreement to merge and form Tongcheng-Elong Holdings Limited (SEHK: 0780), which was consummated in March 2018. In exchange for our prior holdings in eLong, we received an equity method investment in the enlarged group. |
• | In April 2016, we announced strategic collaboration with China Eastern Airlines Corporation Limited, one of China’s three major air transportation groups, on a broad range of products and services. In June 2016, we invested approximately RMB3.0 billion in approximately 466 million A shares of China Eastern Airlines in a private placement. |
• | In December 2016, in connection with our share exchange transaction with BTG Hotels (Group) Co., Ltd., or BTG, a PRC joint stock company that is listed on the Shanghai Stock Exchange and principally engaged in the management of hotels and tourism destinations, and Homeinns Hotel Group, or Homeinns, we exchanged our previously held equity interest in Homeinns for 22% equity interest of BTG. |
• | We have invested in convertible notes (which had been subsequently converted to ordinary shares) and ordinary shares of MakeMyTrip Limited, or MakeMyTrip, a leading online travel company in India, in January 2016 and May 2017 respectively. In August 2019, we completed a share exchange transaction with Naspers Limited, or Naspers, pursuant to which Naspers exchanged its stake in MakeMyTrip, for newly issued shares in our company. Concurrent with the share exchange, we also invested certain ordinary shares and Class B shares of MakeMyTrip in a third-party investment entity. Immediately after the closing of the transaction, Naspers owned approximately 5.6% of our then total issued and outstanding ordinary shares, and we owned ordinary shares and Class B shares of MakeMyTrip, representing approximately 49.0% of the then total voting power in MakeMyTrip. |
• | In May 2018, we acquired substantially all of the remaining equity interest of an offline travel agency company in which we previously held approximately 48% equity interest for the consideration of RMB198 million in cash and 1.9% non-controlling interest of one of our subsidiaries with the fair value of RMB399 million. |
• | diversion of our resources and management attention; |
• | high acquisition and financing costs; |
• | failure to achieve our intended objectives or benefits in making these investments or revenue-enhancing opportunities; |
• | potential claims or litigation regarding our board’s exercise of its duty of care and other duties required under applicable law in connection with any of our significant investments approved by the board; and |
• | failure to be in full compliance with applicable laws, rules and regulations. |
• | Actual or threatened war or terrorist activities; |
• | an outbreak of EVD, COVID-19, MERS, SARS, H1N1 flu, H7N9 flu, and avian flu, or any other serious contagious diseases; |
• | increasing prices in the hotel, transportation ticketing, or other travel-related sectors; |
• | increasing occurrence of travel-related accidents; |
• | political unrest, civil strife, or other geopolitical uncertainty; |
• | natural disasters or poor weather conditions, such as hurricanes, earthquakes, or tsunamis; and |
• | any travel restrictions or other security procedures implemented in connection with any major events in China. |
• | actual or anticipated fluctuations in our quarterly operating results; |
• | changes in financial estimates by securities analysts; |
• | conditions in the internet or travel industries; |
• | changes in the economic performance or market valuations of other internet or travel companies or other companies that primarily operate in China; |
• | changes in major business terms between our travel suppliers and us; |
• | announcements by us or our competitors of new products or services, significant acquisitions, strategic partnerships, joint ventures, or capital commitments; |
• | negative publicity in connection with our business operation; |
• | additions or departures of key personnel; and |
• | market and volume fluctuations in the stock market in general. |
• | increase our vulnerability to adverse general economic and industry conditions; |
• | require us to dedicate a substantial portion of our cash flow from operations to servicing and repaying our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes; and |
• | limit, along with the financial and other restrictive covenants of our indebtedness, among other things, our ability to conduct additional financing activities, or increase the cost of additional financing. |
ITEM 4. |
INFORMATION ON THE COMPANY |
• | C-Travel International Limited; |
• | Ctrip.com (Hong Kong) Limited; |
• | Ctrip Computer Technology (Shanghai) Co., Ltd., or Ctrip Computer Technology; |
• | Ctrip Travel Information Technology (Shanghai) Co., Ltd., or Ctrip Travel Information; |
• | Ctrip Travel Network Technology (Shanghai) Co., Ltd., or Ctrip Travel Network; |
• | Wancheng (Shanghai) Travel Agency Co., Ltd., or Wancheng; |
• | Shanghai Hecheng International Travel Agency Co., Ltd., or Hecheng; |
• | Skyscanner Holdings Limited, or Skyscanner; |
• | Shanghai Ctrip International Travel Agency Co., Ltd. (formerly known as Shanghai Ctrip Charming International Travel Agency Co., Ltd.), or Shanghai Ctrip; |
• | Chengdu Ctrip International Travel Agency Co., Ltd., or Chengdu Ctrip International; and |
• | Chengdu Information Technology Co., Ltd., or Chengdu Information. |
• | Shanghai Ctrip Commerce Co., Ltd., or Ctrip Commerce, which holds a value-added telecommunications business license; |
• | Chengdu Ctrip Travel Agency Co., Ltd, or Chengdu Ctrip, which holds a domestic travel agency license; and |
• | Shanghai Huacheng Southwest International Travel Agency Co., Ltd. (formerly known as Shanghai Huacheng Southwest Travel Agency Co., Ltd.), or Shanghai Huacheng, which holds a domestic travel agency license. |
• | choose and reserve hotel rooms in cities throughout China and abroad; |
• | book and purchase transportation tickets for domestic and international flights and trains; |
• | choose and reserve packaged tours that include transportation and accommodations, as well as guided tours and other value-added services in some instances; and |
• | book and purchase other travel-related services for their leisure and business travels. |
• | Foreign Investment Industrial Guidance Catalogue; |
• | Telecommunications Regulations; and |
• | Administrative Provisions on Foreign Invested Telecommunications Enterprises. |
• | Travel Agency Regulations; and |
• | Implementing Rules of Travel Agency Regulations. |
• | Advertising Law; |
• | Advertising Administrative Regulations; and |
• | Interim Measures of the Administration of Online Advertisement. |
• | Telecommunications Regulations; |
• | The Administrative Measures for Telecommunications Business Operating Licenses; and |
• | The internet Information Services Administrative Measures. |