Ctrip jumps on the back of strong fourth quarter
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Ctrip jumps on the back of strong fourth quarter

Chinese online travel giant Ctrip rose sharply at the end of February, after releasing quarterly earnings that blew expectations out of the water. The company saw a massive increase in revenue to $750 million in the three months that ended December 31 – that’s up by 76% from the year-ago quarter!

Ctrip rises 11% over the month

ctrip graph

SOURCE: Yahoo Finance

On the earnings call, Ctrip’s chairman of the board and former CEO James Liang discussed how the company had managed such overwhelming growth:

“In 2016, we successfully launched several new service initiatives such as online travel guide, airport parking service, and currency exchange services. These services have further improved customer experiences, increased customer loyalty and contributed to our overall sales growth. Second, we have been actively growing our customer base by penetrating into lower tier cities through increased product offering and a targeted marketing campaign. Last year, Ctrip users in the second, third tier cities grew 80% year-over-year.”

One of the driving forces behind the strength of these results is Ctrip’s consolidation of Qunar – the company’s largest rival, which it acquired last year. The reduction in competition, and subsequent marketing cutback, let Ctrip focus on having a more profitable quarter.

Liang sees further positivity ahead, saying:

“Helping more Chinese travelers explore the world remains one of the focuses in the coming years. Chinese passport holders account for less than 10% of the population compared with 39% in United States. We'll continue to invest in travel products and services around the world to improve our user experience and expand our leadership in the outbound travel market.”

The company has forecast positive revenue growth between 40% and 45% in the first quarter of this year, and shares rose by 5% in the post market. At time of writing, Ctrip is up over 11% this month alone.

Disclosure
Dominion holds Ctrip in its Global Trends Ecommerce Fund.


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