Ctrip.com International (CTRP)
Ctrip.com stock rose by ~15% in the last couple of days after announcing its quarterly results. It is a company that is similar to Expedia with the exception that the company operates mostly in China. From ctrip.com website,
"Ctrip.com International Ltd. is a leading consolidator of hotel accommodations and airline tickets in China. The company aggregates information on hotels and flights and enable customers to make informed and cost-effective hotel and flight bookings. It acts as an agent in substantially all of the booking transactions. It targets primarily business and leisure travelers in China who do not travel in group. These travelers form a traditionally under-served yet fast-growing segment of the China travel industry.
The company has experienced substantial growth since its inception in 1999 and has become one of the best-known travel brands in China. It is the largest consolidator of hotel accommodations in China in terms of the number of room nights booked. The company is also one of the leading consolidators of airline tickets in Beijing and Shanghai in terms of number of airline tickets booked and sold. The company is the only airline ticket consolidator in China with a centralized reservation system and ticket fulfillment infrastructure covering all of the economically prosperous regions of China.
The company offers its services through an advanced transaction and service platform consisting of its centralized toll-free, 24-hour customer service center and bilingual websites.
The company’s goal is to create long-term shareholder value by enhancing its position as a leading hotel and airline ticket consolidator in China. Going forward, the company intends to leverage the Ctrip brand to attract new travel suppliers and negotiate more favorable contractual terms with its existing suppliers, expand its hotel supplier network and room inventory, and expand air-ticketing and other travel product offerings. The company also intends to pursue selective strategic acquisitions and expand into Hong Kong, Macau and Taiwan.
The company is incorporated in the Cayman Islands and conducts substantially all of its operations in China. With its operational headquarter in Shanghai, it has branches in Beijing, Guangzhou, Shenzhen and Hong Kong. The company also maintains a network of sales offices in about 30 cities in China."
The growth rate for ctrip is in the 30-40% range year over year. The revenue growth rate year over year was 58% in 2005 compared to 2004. The profit growth year over year is 50%. The earnings per share increased close to 48%. The dilution in the number of shares is about 2.7% year over year.
The cash flow from operations increased by 55% year over year. The company is in a high margin business. Gross margin was 81% in the fourth quarter of 2005, compared to 84% in the same period in 2004. The decrease in margin is largely due to higher cost of service. Operating margin increased substantially to 39% in the fourth quarter of 2005, compared to 33% in the same period in 2004.
The company currently sports a P/E of 48 which is higher than its anticipated growth rate. However, it seems the stock still has some juice in it at least in the immediate future. Like expedia, 81% profit margin should attract some competition and in the long run, the stock may face some head winds. For the moment though, Ctrip looks sweet.