Trip.com shares rose after the record antitrust penalty, as investors and brokerages treated the ruling as a clearing event that removes a long-standing regulatory overhang.
Trip.com Group shares climbed on July 29 even after China imposed penalties of nearly 5.2 billion yuan on the online travel company over monopolistic conduct, with investors and several brokerages viewing the decision as the removal of a major regulatory uncertainty. By midday trading, the Hong Kong-listed stock was up 4.64% at HK$365.4, with turnover of HK$738 million. The State Administration for Market Regulation said Trip.com abused its dominant market position in the online travel market since as early as 2020 by entering exclusive arrangements with some hotels, allocating them prioritized traffic, blocking some hotels from working with rival platforms and requiring certain multi-platform hotel operators to offer the lowest online rates on Trip.com. The regulator ordered the company to forfeit 1.658 billion yuan in illegal gains, pay a 3.521 billion yuan fine and refund 122 million yuan withheld from hotel operators, while also requiring rectification measures and public disclosure of its remediation plan. The market response was positive despite the penalty being described as the largest antitrust punishment since China’s tech-sector regulatory crackdown began in 2021. UOB Kay Hian, Daiwa and UBS all maintained constructive views, arguing that the formal conclusion of the investigation could help narrow Trip.com’s valuation discount even as the company faces near-term pressure on domestic accommodation commissions, monetization and earnings. UBS cut its target prices on Trip.com’s Hong Kong- and U.S.-listed shares, while Daiwa said the total fine exceeded the provision already reflected in its model. Analysts also pointed to overseas growth as a key support for Trip.com’s longer-term outlook.