- Initially down yesterday following a Q2 beat (moreso on EPS than sales), strong Q3 guidance, and news Tencent is offering to take eLong private, Ctrip (NASDAQ:CTRP) has surged above $78 today. Morgan Stanley has upgraded the Chinese online travel leader to Overweight, and Deutsche has hiked its target.
- Likely going over well: Ctrip suggested on its earnings call (transcript) it won't match archrival Qunar's (QUNR -0.4%) aggressive spending and promotional activity, at least on the high end. "I think on the low-end actually is getting more competitive with Qunar ... And they are adopting burning money strategy, where they offer the low-cost prices and with almost no ROI and negative ROI ... we can also do that, but we want to do it a bit more smarter way. So we will compete aggressively on this market, will maintain our market share on the low-end market as well. On the high-end because the customer is less [price] sensitive, they value service and brand so we seem we are to able to maintain a high growth, at the same time still keep a very reasonable profitability."
- Ctrip also once more talked up its mobile growth: Cumulative app downloads have reached 1B, up 200M Q/Q and 5x Y/Y. Mobile transaction value rose 120% Y/Y.
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Q2 results, guidance/details