Ray Dalio’s Top 10 Growth Stock Picks with 30+% Revenue Growth

4. Trip.com Group Limited (NASDAQ:TCOM)

Number of Hedge Fund Investors  in Q1 2024: 49

1 Yr Revenue Growth: 123%

Bridgewater Associates’ Q1 2024 Stake: $32.7 million

Trip.com Group Limited (NASDAQ:TCOM) is another stock that’s riding the wave of the coronavirus recovery. This is because it belongs to the global travel industry, which has continued to recover over the course of the past three years. By Q1 2024 end, Trip.com Group Limited (NASDAQ:TCOM) earned CNY11.9 billion in revenue for a 24% annual growth. Another China focused company, Trip.com Group Limited (NASDAQ:TCOM) can benefit from similar government incentives such as visa free travel like LVS. However, its scale allows it to target the broader Asian region, which means that if China opens its borders, then Trip.com Group Limited (NASDAQ:TCOM) can capture a lot of the travel volume growth due to its market positioning. It is also creating new products for its existing customers, by initiatives such as a deal with Proticket to increase travel suppliers on its platform; and greater penetration into second and third tier Chinese cities due to improved travel infrastructure such as roads and hotels.

Trip.com Group Limited (NASDAQ:TCOM)’s scale also provides it with the benefits of economies of scale to control margins. Here’s what management had to say on this front during the Q1 2024 earnings call:

“Yes, we have achieved a healthy margin level for our domestic business, thanks to the large scale and scalability that we achieved. And the outbound business normally have a slightly higher margin, thanks to the average higher selling price. And at the same time, related to the cost, including the service cost, the product development cost, as well as sales and marketing costs are quite similar to the — compared with the domestic business. So therefore, outbound travel normally is the higher-margin business for us. With regard to the Trip.com business, as I said before, we closely — although the Trip.com business has [indiscernible] in the investment period, however, we closely monitor the contribution margin of the Trip.com business.

And recently, our Trip.com business as a whole has achieved at least a breakeven level in terms of the contribution margin. And in the longer-term period, we strongly believe that the Trip.com business will also become a profitable, healthy growth business in the future. So in summary, we expect our margins to align with — will be aligned with the typical seasonal patterns, reflecting the strong business growth and disciplined cost management. And looking ahead, our margin expansion will primarily stem from operational scalability and approve the sales and marketing efficiencies. However, this may be partly offset by additional expenses associated with expanding our international operations.”