For 4Q15, Ctrip.com’s (CTRP) revenue grew to $468 million—50% YoY (year-over-year) growth compared to revenue of $312 million in 4Q14. The revenue fell by 10% quarter-over-quarter mainly due to seasonality.
For fiscal 2015, the revenue clocked 48% YoY growth to $1.8 billion—compared to revenue of $1.2 billion in 2014.
China’s growing travel demand
Ctrip.com was able to achieve such high growth in 2015 due to China’s travel industry. The industry grew at high rates. This is expected to continue in 2016 given China’s shift from an investment-based economy to a consumption-based economy.
China’s low online penetration will provide another boost for online travel agencies like Qunar (QUNR), Expedia (EXPE), and Priceline (PCLN). In 2015, according to Ctrip.com, it only had 5% market share of China’s travel market. It’s China’s largest OTA player. Together the three largest OTAs—Ctrip, Qunar and eLong—control 10% of the market share.
In 1Q15, China’s online travel market grew by 50%. According to PhoCusWright, it’s expected to continue its high double-digit growth and reach a size of over $70 billion by 2017. Ctrip.com is well placed to capture this growth.
Ctrip.com’s outlook suggests a slowdown
However, Ctrip.com’s own outlook suggests a slowdown in its standalone revenue—the revenue excludes Qunar. Ctrip.com’s management expects its 1Q16 revenue to grow 75%–80% YoY. This growth is higher than the 50% YoY growth achieved in 4Q15. However, this outlook includes Qunar’s revenue. Now, Ctrip.com is Qunar’s primary owner.
Ctrip.com couldn’t provide a breakdown of its core revenue. Analysts expect this to be around 30%–35%. This is slower than the growth in 4Q15. China’s slowing economy and the ongoing fight between OTAs and Chinese airlines will likely be a few of the reasons for the slower growth.
Ctrip.com is the fourth-largest holding of the EGShares Emerging Markets Consumer ETF (ECON). Ctrip.com accounts for 4.3% of its portfolio.
For 4Q15, Ctrip.com reported operating income of $15 million—compared to a $65 million loss in 4Q14. The operating margins increased to 3% in 4Q15.
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