Loomis Sayles Global Growth Fund on Trip.com Group Limited
Thesis
Trip.com is one of the world's largest travel platforms and the leading online travel company in China, with additional global exposure through Trip.com and Skyscanner. Loomis Sayles believes the company is positioned to benefit from long-term growth in travel spending in China and across Asia-Pacific as travel activity continues to normalize beyond pandemic levels. Recent results remained fundamentally strong, while the shares weakened on slower near-term guidance and regulatory uncertainty. The team believes the market is pricing revenue and cash-flow expectations substantially below its long-term assumptions, leaving the shares at a significant discount to intrinsic value.
“we continue to believe the company remains a high-quality company with a leading position in the Asia-Pacific travel market”
Key risks
- China's State Administration for Market Regulation is conducting an antitrust investigation
- A regulatory violation could result in a fine of 1% to 10% of prior-year sales and changes to business practices
- Elevated energy and airline prices are contributing to slower near-term travel growth