Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP), a leading travel service provider of accommodation reservation, transportation ticketing, packaged tours and corporate travel management inChina (“Ctrip” or the “Company”), today announced its unaudited financial results for the first quarter ended March 31, 2016.

Highlights for the First Quarter of 2016

  • Net revenues were RMB4.2 billion (US$648 million) for the first quarter of 2016, up 80% year-on-year.
  • Accommodation reservation revenues increased 70% year-on-year, reaching RMB1.6 billion (US$250 million) for the first quarter of 2016.
  • Transportation ticketing revenues increased 106% year-on-year, reaching RMB1.9 billion (US$302 million) for the first quarter of 2016.
  • Gross margin was 73% for the first quarter of 2016, compared to 70% in the same period in 2015, and remained consistent with the previous quarter.
  • Excluding share-based compensation charges (non-GAAP), net income attributable to Ctrip’s shareholders wasRMB257 million (US$40 million), compared to RMB33 million (US$5 million) in the same period in 2015.

“The first quarter of 2016 was a great quarter. Our team did an excellent job growing revenue and improving margins,” said James Liang, Chairman of the Board and Chief Executive Officer of Ctrip.  “Going forward, we plan to devote more resources to innovation and outbound travel to build a solid foundation for our sustainable long-term growth.”

First Quarter of 2016 Financial Results and Business Updates

For the first quarter of 2016, Ctrip reported total revenues of RMB4.4 billion (US$682 million), representing an 80% increase from the same period in 2015 and a 45% increase from the previous quarter, primarily due to the consolidation of the financial results of Qunar Cayman Islands Limited (“Qunar”) starting from December 31, 2015.

Accommodation reservation revenues for the first quarter of 2016 were RMB1.6 billion (US$250 million), representing a 70% increase from the same period in 2015 and a 36% increase from the previous quarter, primarily driven by an increase in accommodation reservation volume and the consolidation of Qunar’s financial results since December 31, 2015.

Transportation ticketing revenues for the first quarter of 2016 were RMB1.9 billion (US$302 million), representing a 106% increase from the same period in 2015 and a 57% increase from the previous quarter, primarily driven by an increase in ticketing volume and the consolidation of Qunar’s financial results since December 31, 2015.

Packaged-tour revenues for the first quarter of 2016 were RMB556 million (US$86 million), representing a 41% increase from the same period in 2015 and a 59% increase from the previous quarter, primarily driven by an increase in volume growth of organized tours and self-guided tours.

Corporate travel revenues for the first quarter of 2016 were RMB116 million (US$18 million), representing a 25% increase from the same period in 2015, primarily driven by increased corporate travel demand from business activities. Corporate travel revenues decreased by 15% from the previous quarter, primarily due to seasonality.

For the first quarter of 2016, net revenues were RMB4.2 billion (US$648 million), representing an 80% increase from the same period in 2015. Net revenues for the first quarter of 2016 increased by 45% from the previous quarter.

Gross margin was 73% for the first quarter of 2016, compared to 70% in the same period in 2015 and remained consistent with the previous quarter.

Product development expenses for the first quarter of 2016 increased by 196% to RMB2.4 billion (US$372 million) from the same period in 2015 and increased by 179% from the previous quarter, primarily due to the one time transaction related share-based compensation charges as well as the consolidation of Qunar’s financial results since December 31, 2015. Excluding share-based compensation charges (non-GAAP), product development expenses accounted for 32% of the net revenues, which remained consistent with the same period in 2015 and increased from 27% in the previous quarter, primarily due to an increase in expenses relating to product development personnel and the consolidation of Qunar’s financial results since December 31, 2015.

Sales and marketing expenses for the first quarter of 2016 increased by 114% to RMB1.5 billion (US$239 million) from the same period in 2015 and increased by 82% from the previous quarter, primarily due to the one time transaction related share-based compensation charges as well as the consolidation of Qunar’s financial results since December 31, 2015. Excluding share-based compensation charges (non-GAAP), sales and marketing expenses accounted for 33% of the net revenues, which increased from 30% in the same period in 2015 and 29% in the previous quarter, primarily due to the consolidation of Qunar’s financial results since December 31, 2015.

General and administrative expenses for the first quarter of 2016 increased by 258% to RMB929 million (US$144 million) from the same period in 2015 and 203% from the previous quarter, primarily due to the one time transaction related share-based compensation charges as well as the consolidation of Qunar’s financial results since December 31, 2015. Excluding share-based compensation charges (non-GAAP), general and administrative expenses accounted for 8% of the net revenues, which remained consistent with the same period in 2015 and increased from 7% in the previous quarter.

Loss from operations for the first quarter of 2016 was RMB1.8 billion (US$283million), compared to loss of RMB180 million (US$29 million) in the same period in 2015 and income from operations of RMB95 million (US$15 million) in the previous quarter. Excluding share-based compensation charges (non-GAAP), income from operations was RMB8 million(US$1 million), compared to loss of RMB21 million (US$3 million) in the same period in 2015 and income of RMB292 million (US$45 million) in the previous quarter.

Operating margin was -44% for the first quarter of 2016, compared to -8% in the same period in 2015, and 3% in the previous quarter. Excluding share-based compensation charges (non-GAAP), operating margin was 0%, compared to -1% in the same period in 2015 and 10% in the previous quarter.

Income tax expense for the first quarter of 2016 was RMB94 million (US$15 million), compared to RMB6 million (US$1 million) in the same period of 2015 and RMB71 million (US$11 million) in the previous quarter.

Net loss attributable to Ctrip’s shareholders for the first quarter of 2016 was RMB1.6 billion (US$245 million), compared to net loss of RMB126 million (US$20 million) in the same period in 2015 and net income of RMB76 million (US$12 million) in the previous quarter, mainly due to the consolidation of Qunar’s net loss of RMB1.1 billion (US$167 million). Excluding share-based compensation charges (non-GAAP), net income attributable to Ctrip’s shareholders was RMB257 million(US$40 million), compared to RMB33 million (US$5 million) in the same period in 2015 and RMB272 million (US$42 million) in the previous quarter.

Diluted earnings per ADS were RMB-3.49 (US$-0.54) for the first quarter of 2016. Excluding share-based compensation charges (non-GAAP), diluted earnings per ADS were RMB0.57 (US$0.09) for the first quarter of 2015.

As of March 31, 2016, the balance of cash and cash equivalents, restricted cash and short-term investment wasRMB20.9 billion (US$3.2 billion).

In the first quarter of 2016, Ctrip recognized share-based compensation charges of RMB1.8 billion (US$285 million). The increase of share-based compensation charges is primarily due to the consolidation of Qunar’s share-based compensation charges and the one time transaction related share-based compensation charges.

Business Outlook

For the second quarter of 2016, the Company expects the net revenue growth to continue at a year-on-year rate of approximately 70-75%. This forecast reflects Ctrip’s current and preliminary view, which is subject to change.(Original Source)

Shares of Ctrip are up over 3% to $40.59 in pre-market trading. CTRP has a 1-year high of $57.36 and a 1-year low of $27.25. The stock’s 50-day moving average is $43.68 and its 200-day moving average is $44.27.

On the ratings front, Ctrip has been the subject of a number of recent research reports. In a report issued on June 8, Brean Murray Carret analyst Fawne Jiang reiterated a Buy rating on CTRP. Separately, on June 1, Oppenheimer’s Jed Kelly reiterated a Buy rating on the stock and has a price target of $55.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Fawne Jiang and Jed Kelly have a total average return of 1.6% and 33.6% respectively. Jiang has a success rate of 38.9% and is ranked #1326 out of 3974 analysts, while Kelly has a success rate of 61.0% and is ranked #83.

The street is mostly Bullish on CTRP stock. Out of 4 analysts who cover the stock, 4 suggest a Buy rating . The 12-month average price target assigned to the stock is $55.00, which represents a potential upside of 40.1% from where the stock is currently trading.

Ctrip.com International Ltd. engages in the provision of travel-related services. It provides hotel accommodations, airline tickets, packaged tours, corporate travel management services, property management systems, and advertising services.