Ctrip.com (CTRP) is an old favorite of ours, probably the first Chinese-based stock we ever owned, and last night they delivered a stellar earnings report. It has been off our radar of late, so I had missed its recent (beautiful) breakout... the chart looks like this and that is without the 10% it tacked on in after hours. It is now trading in the $71s...
Some color on their earnings, with full report here:
- Ctrip.com International Ltd., a Chinese travel service provider, said Wednesday its third-quarter profit rose 80 percent on higher revenues from hotel and flight reservations and tour bookings. The company, based in Shanghai, earned 188.5 million yuan ($27.6 million), or 2.65 yuan (39 cents) per share, in the quarter that ended Sept. 30. That is up from the 104.5 million yuan, or 1.52 yuan per share, a year earlier. Adjusted per-share profit of 3.03 yuan (44 cents) per share beat a 32 cent per share prediction of analysts polled by Thomson Reuters.
- Revenue rose 47 percent to 583.4 million yuan ($85.5 million) from 397 million yuan. Analysts had expected $72.2 million in revenue.
- The company said hotel reservations rose 41 percent, flight bookings rose 45 percent and packaged tour revenues rose 93 percent over a year earlier.
- It also said it expects fourth-quarter revenue to grow by 25 percent to 30 percent. That's roughly in line with analysts expectations of 28.2% growth, or revenue of $74.5 million
- The company said its gross profit margin was 77%, the same as the prior and year-earlier quarters.
- "Ctrip is getting an updraft from improving domestic airline traffic in China," said Kaufman Bros. analyst Aaron Kessler.
- An upsurge in domestic air traffic energized Ctrip's air travel bookings in the quarter, agreed Piper Jaffray analyst Michael Olson. He says figures from Air China and China Southern Airlines, the country's two dominant domestic carriers, show the number of passengers carried by the two combined rose 18% in the third quarter compared with the year-earlier quarter. That's up from a 7% increase in the second quarter, he says.
- Olson says a Piper Jaffray survey found that air ticket and hotel prices are up overall in China from the prior quarter, boosting Ctrip's commissions. This is better than the company expected. Ctrip predicted in its second-quarter earnings report on Aug. 4 that third-quarter air and hotel prices would be mostly flat with the prior quarter.
- Kessler says Ctrip still has lots of room to grow. He says leisure travel makes up only 30% of company revenue, and that Ctrip has roughly half of China's online travel market.
- "China is still in the early days of online travel, especially on the leisure side," Kessler said, "Online travel aggregators like Ctrip together only have a 10% share of China's total travel market. The market is still very fragmented -- which is why we like Ctrip."
Disclosure: Author does not own shares of Ctrip.com