Qunar Will Not Be Stopped By The Price War
Thu, Jun. 23, 9:16 AM
Thu, Jun. 23, 7:40 AM
- Qunar Cayman Islands Limited (NASDAQ:QUNR) has received a preliminary non-binding proposal from Ocean Management Limited to acquire all the outstanding shares of Qunar not owned by Significant Shareholders (who have majority voting power) for $30.39 pre ADS or $10.13 per ordinary share (one ADS = 3 ordinary shares).
- The buyer is an entity related to Ocean Imagination L.P., a private equity fund focused on investing in travel-related industries in China. The transaction will be funded with a combination of debt and equity capital.
- Recent SA articles: Pro & Con.
Mon, Jun. 6, 5:35 PM
Mon, May 23, 5:37 PM
Thu, Mar. 17, 11:30 AM
- Ctrip (CTRP -2.7%) is lower after beating Q4 estimates and guiding for 75%-80% Y/Y Q1 revenue growth, after accounting for the consolidation of peer Qunar's (QUNR +4.4%) results following the end of Q4 - Ctrip owns 45% of Qunar's voting interests following an October deal with Baidu. Consensus, which doesn't account for the Qunar consolidation, is for 45.9% growth.
- Qunar, which saw a major executive shakeup in January, is higher after beating Q4 estimates on the back of 148% revenue growth. On its earnings call (transcript), Qunar said it's declining to give formal Q1 guidance due to ongoing extension talks with hotel owners regarding the company's merchant hotel program, as well as its ongoing efforts to work with airlines to "clean up the agent market and eliminate the irregular behaviors by certain ticketing agencies on our platform."
- Ctrip's Q4: Accommodation (hotel) revenue rose 41% Y/Y to RMB1.2B ($183M). Transportation ticketing revenue rose 61% to RMB1.2B ($192M) thanks to a 143% increase in ticket volume. Packaged tour revenue rose 50% to RMB350M ($54M). Corporate travel revenue rose 26% to RMB136M ($21M).
Gross margin was flat Q/Q and up 400 bps Y/Y to 73%. Operating expenses rose 17% Y/Y (less than revenue growth of 50%) to RMB2.02B ($311M). Ctrip ended 2015 with $4.6B in cash and $4.8B in debt.
- Qunar's Q4: Accommodation revenue rose 423.6% Y/Y to $82.6M. Flight revenue rose 84.7% to $98.2M. Mobile accounted for 75.3% of total revenue.
Gross margin fell to 60.8% from 62.4% in Q3 and 73.5% a year ago. R&D spend rose 532.7% Y/Y to $236.5M, product sourcing spend 207% to $52.4M, sales/marketing 213% to $134.7M, and G&A (excluding one-time stock compensation expenses) 121.5% to $20.6M. Qunar ended 2015 with $1.1B in cash and $510M in debt.
- Ctrip: Q4 results, earnings release
- Qunar: Q4 results, earnings release
Mon, Mar. 14, 5:43 PM
Tue, Jan. 19, 5:39 PM
Wed, Jan. 13, 11:49 AM
- Ctrip (CTRP -4.3%) says it's authorized to invest $1.3B in cash and issue 5.4M ordinary shares (equal to 21.6M ADS') via "limited partnership capital contribution or other financing arrangements, in several non-U.S. investment entities, which are managed or owned by parties unaffiliated with each other and unaffiliated with the Company and are dedicated to investing in businesses in China."
- Ctrip adds the entities "will acquire a significant minority stake" in Qunar (QUNR +12.6%) from Qunar shareholders, via privately-negotiated deals involving cash and/or Ctrip shares as payment.
- The news comes less than three months after Ctrip announced a deal to buy a major stake in Qunar (its biggest rival) from Baidu. The deal left Ctrip owning 45% of Qunar's voting interests, and Baidu 25% of Ctrip's voting interests.
- Last week, Ctrip announced it's investing $180M in Indian online travel firm MakeMyTrip.
Wed, Jan. 13, 9:17 AM
Thu, Jan. 7, 2:00 PM
- Hammered three days ago as U.S. and Chinese markets tumbled, the story is much the same today for U.S.-traded Chinese tech firms. The Nasdaq is down 2.7%, and the Shanghai and Shenzhen exchanges respectively fell 7% and 8.3% overnight amid an ongoing selloff in the yuan, which now trades at 6.59 per dollar.
- The Guggenheim China Tech ETF (CQQQ -4.7%) is now down 8% in 2016. It's still 30% above an August low of $25.36.
- Internet giants Baidu (BIDU -7.1%) and Alibaba (BABA -6.5%) are among the names seeing steep losses. Others include Sina (SINA -6%), Weibo (WB -8.5%), Qunar (QUNR -12.4%), JD.com (JD -6.4%), ChinaCache (CCIH -9.6%), Jumei (JMEI -8.7%), Zhaopin (ZPIN -5.7%), Baozun (BZUN -7.4%), NQ Mobile (NQ -5.8%), and Momo (MOMO -6.1%). Over in Hong Kong, messaging/gaming leader Tencent (OTCPK:TCEHY) fell 4%.
- ETFs: QQQC, KWEB, EMQQ
Mon, Jan. 4, 12:40 PM
Nov. 25, 2015, 3:54 PM
- Qunar (QUNR +4.1%) is back above $40 after beating Q3 estimates with the help of a 381% Y/Y increase in mobile revenue to $153.5M (now 73.6% of total revenue). Q4 guidance is for 105%-125% Y/Y sales growth (largely below a 124.6% consensus) and 85%-105% gross profit growth.
- Top-line performance: Adjusting for a bookings model shift, hotel reservation revenue rose 188.6% Y/Y to $50.7M, and flight revenue 91.2% to $93.9M. Hotel and flight volume respectively rose 119.8% and 49.4% to 22M rooms and 33.9M tickets.
- Financials: Spending remained heavy: Sales/marketing spend +188.6% Y/Y to $120.9M, R&D +78.1% to $64.3M, product sourcing 87.5% to $29.4M, G&A +15.6% to $19.4M. Due to certain hotel reservations being recognized on a gross basis, gross margin fell to 62.4% from 72% in Q2 and 72.4% in Q3 2014. The Ctrip deal has been expected to eventually yield lower spending growth.
- On the earnings call (transcript), China's second-biggest online travel firm suggested it expects to reach EBITDA breakeven in Q3 2016. The company also said it remains on track to pare its aggressive offline marketing spend (aims to grow Qunar's customer base) in 1H16.
- Q3 results, PR
Nov. 24, 2015, 5:39 PM
Nov. 23, 2015, 1:42 PM
- Qunar (NASDAQ:QUNR) has surged above $40 ahead of tomorrow afternoon's Q3 report. 2.7M shares have been traded, topping a 3-month daily average of 2.35M.
- China's #2 online travel firm has been quite volatile (but is up only moderately) since Ctrip and Baidu announced on Oct. 26 the former is buying the latter's stake in Qunar, thus giving it control of 45% of Qunar's voting interests.
- Ctrip delivered a Q3 beat and issued strong Q4 guidance on Nov. 18. Qunar briefly moved higher on the news, but soon more than gave back its gains.
Nov. 18, 2015, 5:40 PM
- In addition to beating Q3 estimates, Ctrip (NASDAQ:CTRP) is guiding for 45%-50% Y/Y RMB-based revenue growth, above a 40.2% consensus. Shares have jumped to $108.50 after hours. Peer Qunar (NASDAQ:QUNR), which Ctrip now has a large stake in, has risen to $39.25 ahead of its Nov. 24 Q3 report.
- Q3 EPS benefited from $377M in "other income" stemming largely from the de-consolidation of Chinese Airbnb clone Tujia.com from Ctrip's results, thanks to the loss of control of Tujia following a new funding round.
- Financials: EPS also benefited from moderating spending growth: R&D, sales/marketing, and G&A spend respectively rose 36%, 40%, and 8% Y/Y to $131M, $132M, and $41M, after growing 66%, 42%, and 34% in Q2. The Qunar deal has been expected to yield further spending moderation. Gross margin rose to 735 from Q2's 71% and Q3 2014's 72%.
- Top-line performance: Accommodation revenue rose 45% Y/Y to $215M, transportation ticketing 51% to $190M, packaged tours 66% to $93M, and corporate travel 19% to $20M. Hotel reservation volume rose 50%, and ticketing volume 150%.
- Ctrip's Q3 results, PR
Oct. 26, 2015, 1:27 PM
- Priceline (NASDAQ:PCLN) is up strongly following news Chinese online travel leader Ctrip (CTRP +21.1%), in which Priceline has an 11.6% stake, announced it's acquiring Baidu's stake in top rival Qunar (QUNR +15.9%) in exchange for shares.
- Expedia (NASDAQ:EXPE), which formed an alliance with Ctrip earlier this year as part of a deal to unload its 62.4% stake in struggling Ctrip/Qunar rival eLong, is also doing well.
- The deal leaves Ctrip owning 45% of Qunar's voting interests, and Baidu owning 25% of Ctrip's voting interests. It brings together China's two biggest online travel firms, and could lead each company to pare back the aggressive promotions and heavy marketing spend it has supported in the name of taking share from the other.
- HSBC's Chi Tsang: "Essentially it’s a merger between the two companies. If you look at the travel market, it’s such an obvious way to drive synergy through consolidation.” As part of the deal, Ctrip has won seats on Qunar's board, and Baidu seats on Ctrip's board.
- At current levels, Priceline's 17.5M-share stake in Ctrip is worth $1.58B. Expedia reports on Thursday afternoon, and Priceline on the morning of Nov. 9.
Qunar Cayman Islands Ltd. engages in the provision of travel and tourism services through an online commerce platform. It operates through the following segments: Hotel and Travel Agent Services; Advertising; and Group Sales. It offer pay-for-performance, display advertising, and online services... More
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