China’s top OTA Ctrip.com announced its unaudited financial results for the third quarter ended September 30, 2015.
Highlights for the Third Quarter of 2015
Net revenues were RMB3.2 billion (US$501 million) for the third quarter of 2015, up 49% y-o-y. Accommodation reservation volume increased 50% y-o-y, and accommodation reservation revenues increased 45% y-o-y, reaching RMB1.4 billion (US$216 million) for the third quarter of 2015. Transportation ticketing volume increased 150% y-o-y, and transportation ticketing revenues increased 51% y-o-y, reaching RMB1.2 billion (US$190 million) for the third quarter of 2015.
Net income attributable to Ctrip's shareholders was RMB2.4 billion (US$380 million) for the third quarter of 2015, compared to RMB217 million (US$35 million) in the same period in 2014. Diluted earnings per ADS were RMB13.26 (US$2.09) for the third quarter of 2015.
"Ctrip maintained strong momentum and delivered great results in the third quarter of 2015," said Ctrip’s . Chairman and CEO James Liang, "Both hotel and air ticketing businesses reached 50% y-o-y growth in volume. Outbound travel continued to grow at triple digit in the core business segments due to the booming demand this quarter. Meanwhile, the Ctrip team has demonstrated its strong execution through significant improvement in operational efficiency."
"We are also very excited about the transaction between Baidu and Ctrip announced on October 26th. Ctrip and Qunar are committed to building a healthier ecosystem in China's travel industry together. We are confident that both teams will further strengthen their fundamental capabilities and create better value for travelers, suppliers and shareholders." James added.
Recent Developments
The third quarter is shaping up to represent a very significant period for Ctrip, with a sharp upturn in profits and a recent agreement with Baidu to acquire a stake in its major rival, Qunar.
Ctrip’s fortunes are in sharp contrast to eLong, which posted a net loss of CNY156m for the third quarter, 168% worse than the same period last year, with revenues rising just 2%.
Share exchange transaction with Baidu
In October 2015, Ctrip completed a share exchange transaction with Baidu in which Baidu exchanged 178,702,519 Class A ordinary shares and 11,450,000 Class B ordinary shares of Qunar for 11,488,381 newly-issued ordinary shares of Ctrip. As a result of the transaction, Baidu owns ordinary shares of Ctrip representing approximately 25% of Ctrip's aggregate voting interest, and Ctrip will own ordinary shares of Qunar representing approximately 45% of Qunar's aggregate voting interest.
Share issuance for the benefit of Qunar employees
In connection with the recent transaction with Baidu, Ctrip has become a significant shareholder of Qunar. Ctrip has agreed to issue a total of approximately 5 million ordinary shares to certain special purpose vehicles holding these shares solely for the benefit of Qunar employees.
Ctrip and Qunar are currently exploring ways through which they can effectively cooperate to enhance their respective products and services and better serve the market.
Share repurchase program
As of November 18, 2015, Ctrip had purchased approximately 21 million ADSs in aggregate with a total consideration of US$510 million.
Business Outlook
Ctrip expects to continue the net revenue growth year-on-year at a rate of approximately 45-50% for the fourth quarter of 2015.
