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Brief Overview on Company’s Performance: Ctrip.com International (NASDAQ: CTRP)

Ruby Warren

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On Monday, Shares of Ctrip.com International (NASDAQ: CTRP) rose 1.19% to $49.47. The stock recorded $48.70 as its minimum price and hit the max level of $49.50, during its most recent trading session. It traded total volume of 6,848,524 shares higher than the average volume of 5.02M shares.

Ctrip.com International, Ltd. (CTRP), a leading travel service provider of accommodation reservation, transportation ticketing, packaged tours and corporate travel management in China, recently declared its unaudited financial results for the first quarter ended March 31, 2018.

First Quarter of 2018 Financial Results and Business Updates:

For the first quarter of 2018, Ctrip stated net revenue of RMB6.70B (US$1.10B), representing an 11% increase from the same period in 2017. Net revenue for the first quarter of 2018 increased 9% from the previous quarter.

Accommodation reservation revenue for the first quarter of 2018 was RMB2.50B(US$397.0M), representing a 23% increase from the same period in 2017, mainly driven by a boost in accommodation reservation volume. Accommodation reservation revenue for the first quarter of 2018 increased 14% from the previous quarter, mainly because of seasonality.

Transportation ticketing revenue for the first quarter of 2018 was RMB2.90B (US$460.0M), which remained consistent with the same period of 2017. Transportation ticketing revenue reduced 1% from the previous quarter.

Packaged tour revenue for the first quarter of 2018 was RMB834.0M (US$133.0M), representing an 18% increase from the same period in 2017, mainly driven by a boost in volume growth of organized tours and self-guided tours. Packaged-tour revenue for the first quarter of 2018 increased 52% from the previous quarter, mainly because of seasonality.

Corporate travel revenue for the first quarter of 2018 was RMB180.0M (US$29.0M), representing a 25% increase from the same period in 2017, mainly driven by expansion in travel product coverage. Corporate travel revenue for the first quarter of 2018 reduced 13% from the previous quarter, mainly because of seasonality. Gross margin was 82% for the first quarter of 2018, contrast to 80% in the same period in 2017, and 83% for the previous quarter.

Product development expenses for the first quarter of 2018 increased 10% to RMB2.20B (US$344.0M) from the same period in 2017, mainly because of the increase in product development personnel related expenses. Product development expenses for the first quarter of 2018 increased 4% from the previous quarter. Product development expenses for the first quarter of 2018 accounted for 32% of the net revenue. Excluding share-based compensation charges, Non-GAAP product development expenses for the first quarter of 2018 accounted for 29% of the net revenue, which increased from 28% for the same period in 2017 and reduced from 30% for the previous quarter.

Sales and marketing expenses for the first quarter of 2018 increased by 11% to RMB2.10B (US$333.0M) from the same period in 2017, mainly because of a boost in sales and marketing activities to strengthen our market position and personnel related expenses. Sales and marketing expenses for the first quarter of 2018 increased 3% from the previous quarter. Sales and marketing expenses for the first quarter of 2018 accounted for 31% of the net revenue. Excluding share-based compensation charges, Non-GAAP sales and marketing expenses for the first quarter of 2018 accounted for 31% of the net revenue, which increased from 30% for the same period in 2017 and reduced from 32% for the previous quarter.

General and administrative expenses for the first quarter of 2018 increased by 1% to RMB646.0M (US$103.0M) from the same period in 2017. General and administrative expenses for the first quarter of 2018 reduced 8% from the previous quarter, mainly on the back of more provision of trade and other receivables was made in previous quarter. General and administrative expenses for the first quarter of 2018 accounted for 10% of the net revenue. Excluding share-based compensation charges, Non-GAAP general and administrative expenses accounted for 8% of the net revenue, which increased from 7% for the same period in 2017 and reduced from 9% for the previous quarter.

Income from operations for the first quarter of 2018 was RMB590.0M (US$95.0M), contrast to RMB374.0M in the same period in 2017 and RMB303.0M in the previous quarter. Excluding share-based compensation charges, Non-GAAP income from operations was RMB966.0M (US$156.0M), contrast to RMB896.0M in the same period in 2017 and RMB703.0M in the previous quarter.

Operating margin was 9% for the first quarter of 2018, contrast to 6% in the same period in 2017, and 5% in the previous quarter. Excluding share-based compensation charges, Non-GAAP operating margin was 14%, contrast to 15% in the same period in 2017 and 11% in the previous quarter.

Income tax expense for the first quarter of 2018 was RMB179.0M (US$29.0M), contrast to RMB139.0M in the same period of 2017 and RMB238.0M in the previous quarter. The change in the Group’s effective tax rate mainly reflects profitability changes in our auxiliaries with different tax rates, certain non-tax deductible losses counting the share based compensation and fair value change in equity securities investments.

Net income attributable to Ctrip’s shareholders for the first quarter of 2018 was RMB1.10B (US$170.0M), contrast to RMB52.0M in the same period in 2017 and RMB350.0M in the previous quarter. Excluding share-based compensation charges and fair value changes of equity securities investments, Non-GAAP net income attributable to Ctrip’s shareholders was RMB2.10B (US$341.0M), contrast to RMB574.0M in the same period in 2017 and RMB750.0M in the previous quarter, mainly because of the net gain recognized from a number of investing activities. Diluted earnings per ADS were RMB1.81 (US$0.29) for the first quarter of 2018. Excluding share-based compensation charges and fair value changes of equity securities investments, Non-GAAP diluted earnings per ADS were RMB3.48 (US$0.55) for the first quarter of 2018.

As of March 31, 2018, the balance of cash and cash equivalents, restricted cash and short-term investment was RMB52.50B (US$8.40B).

CTRP has the market capitalization of $26.49B and its EPS growth ratio for the past five years was 6.20%. The return on assets ratio of the Company was 1.80% while its return on investment ratio stands at 1.00%. Price to sales ratio was 6.21 while 70.70% of the stock was owned by institutional investors.

I am Ruby Warren and I give “IRN Post” an insight into the most recent news hitting the “Services” sector in Wall Street. I have been an independent financial adviser for over 11 years in the city and in recent years turned my experience in finance and passion for journalism into a full time role. I perform analysis of Companies and publicize valuable information for shareholder community.

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