Monthly Update

The cleanest read-through is not the headline fund outperformance, but the dispersion inside Asian tech: the market is still rewarding those with direct AI capex leverage while punishing consumer-facing franchises with cyclical growth deceleration. Samsung and SK hynix strength implies the EM complex is being treated as a semiconductor beta trade, not a broad EM risk-on move, which tends to compress relative multiples for anything tied to discretionary spend or travel. That matters for TCOM because its underperformance is likely as much about factor rotation and weaker earnings visibility as company-specific fundamentals.

For Trip.com, the important second-order effect is that travel demand is increasingly being priced against a higher bar: investors now want either accelerating inbound/outbound volumes or clear margin expansion to offset any China consumer softness. If macro sentiment in China remains stable but not strong, TCOM can lag even in a rising market because capital is being pulled toward AI supply chain winners with more convex earnings revisions. That makes the stock vulnerable to continued multiple compression over the next 1-3 months unless management can prove pricing power or a sustained recovery in cross-border travel.

The contrarian angle is that the selloff may be overdone if the market is extrapolating a short-term deceleration into a full-cycle demand issue. Travel names often re-rate sharply once investors see a few months of stable bookings and operating leverage, and TCOM’s downside can become crowded if positioning is already light. The key catalyst is not a macro rebound but a sequence of incremental beats: booking growth stabilization, margin resilience, and any evidence that Chinese outbound travel is normalizing faster than expected.

From a technicals-and-flows perspective, the relative setup favors mean reversion only if the AI trade pauses. If the semiconductor rally broadens out of the top names, some of the factor headwind should ease and capital may rotate back into lagging consumer internet exposures. Until then, TCOM likely remains a funding source for investors chasing the stronger revision cycle in hardware and memory.