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Ctrip.com International Ltd$54.61($.86)(1.55%)

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 Ctrip Reports Unaudited First Quarter of 2017 Financial Results
   Wednesday, May 10, 2017 6:00:00 PM ET

Ctrip.com International, Ltd. (CTRP ), a leading travel service provider of accommodation reservation, transportation ticketing, packaged tours and corporate travel management in China ("Ctrip" or the "Company"), today announced its unaudited financial results for the first quarter ended March 31, 2017.

Key Highlights

-- Ctrip reported strong financial results in the first quarter of 2017.

-- Net revenues increased 46% year-on-year to RMB6.1 billion in the first quarter of 2017.

-- The accommodation reservation business delivered healthy growth in the first quarter of 2017, driven primarily by the volume growth of organic businesses.

-- The transportation ticketing business also continued its strong growth, benefiting from solid execution of organic air ticketing business, fast growing new business units and the addition of Skyscanner.

-- Gross margin was 80% for the first quarter of 2017, improving from 73% in the same quarter of 2016 and 78% in the previous quarter, due to further efficiency gain.

-- Operating margin for the first quarter of 2017 was 7%. Excluding share-based compensation charges, Non-GAAP operating margin for the first quarter of 2017 was 15%, improving significantly from 0% in the same quarter a year ago, driven mainly by improvements in operating efficiency across the board and synergies from the invested companies.

-- The company has strengthened its presence in lower tier cities through more targeted sales and marketing spending. Recently, Qunar has signed a famous actress as its first brand ambassador. The move will help Qunar increase its influence among younger consumers and grow its customer base, especially in lower tier cities.

"This is the first quarter we consolidated Skyscanner results," said James Liang, Executive Chairman. "By leveraging Skyscanner and other strategic overseas investments, we expect to further strengthen our international product offerings and improve user experiences for both Chinese and international travelers."

"We kicked off 2017 with great results," said Jane Jie Sun, Chief Executive Officer. "The group has continued to achieve healthy revenue growth and margin expansion. We have also been making great strides in penetrating into lower-tier cities and expanding into international markets, thanks to our teams’ strong execution and strategic investments."

First Quarter of 2017 Financial Results and Business Updates

For the first quarter of 2017, Ctrip reported net revenues of RMB6.1 billion (US$884 million), representing a 46% increase from the same period in 2016. Net revenues for the first quarter of 2017 increased 20% from the previous quarter.

Accommodation reservation revenues for the first quarter of 2017 were RMB2.1 billion (US$301 million), representing a 28% increase from the same period in 2016, primarily driven by an increase in accommodation reservation volume. Accommodation reservation revenues for the first quarter of 2017 increased 12% from the previous quarter, primarily due to seasonality.

Transportation ticketing revenues for the first quarter of 2017 were RMB2.9 billion (US$418 million), representing a 48% increase from the same period in 2016, primarily driven by an increase in ticketing volume and the consolidation of Skyscanner’s financial results since December 31, 2016. Transportation ticketing revenues increase 18% from the previous quarter, primarily due to seasonality and the consolidation of Skyscanner’s financial results since December 31, 2016.

Packaged-tour revenues for the first quarter of 2017 were RMB702 million (US$102 million), representing a 26% increase from the same period in 2016, primarily driven by an increase in volume growth of organized tours and self-guided tours. Packaged-tour revenues for the first quarter of 2017 increased 50% from the previous quarter, primarily due to seasonality.

Corporate travel revenues for the first quarter of 2017 were RMB144 million (US$21 million), representing a 25% increase from the same period in 2016, primarily driven by expansion in travel product coverage. Corporate travel revenue for the first quarter of 2017 decreased 19% from the previous quarter, primarily due to seasonality.

Gross margin was 80% for the first quarter of 2017, compared to 73% in the same period in 2016, and 78% in the previous period.

Product development expenses for the first quarter of 2017 decreased by 18% to RMB2.0 billion (US$285 million) from the same period in 2016, primarily due to a decrease in share-based compensation charges. Product development expenses for the first quarter of 2017 increased 14% from the previous quarter, primarily due to an increase in product development personnel related expenses. Product development expenses for the first quarter of 2017 accounted for 32% of the net revenues. Excluding share-based compensation charges, Non-GAAP product development expenses for the first quarter of 2017 accounted for 28% of the net revenues, which decreased from 32% in the same period of 2016 and increased from 27% in the previous quarter.

Sales and marketing expenses for the first quarter of 2017 increased by 22% to RMB1.9 billion (US$273 million) from the same period in 2016 and increased 28% from the previous quarter, primarily due to an increase in sales and marketing related activities. Sales and marketing expenses for the first quarter of 2017 accounted for 31% of the net revenues. Excluding share-based compensation charges, Non-GAAP sales and marketing expenses for the first quarter of 2017 accounted for 30% of the net revenues, which decreased from 33% in the same period in 2016 and increase from 28% in the previous quarter.

General and administrative expenses for the first quarter of 2017 decreased by 31% to RMB638 million (US$93 million) from the same period in 2016, primarily due to a decrease in share-based compensation charges. General and administrative expenses for the first quarter of 2017 increased 18% from the previous quarter. General and administrative expenses for the first quarter of 2017 accounted for 10% of the net revenues. Excluding share-based compensation charges, Non-GAAP general and administrative expenses accounted for 7% of the net revenues, which decrease from 8% in the same period in 2016 and remained consistent with the previous quarter.

Income from operations for the first quarter of 2017 was RMB414 million (US$60 million), compared to loss of RMB1.8 billion in the same period in 2016 and income of RMB207 million in the previous quarter. Excluding share-based compensation charges, Non-GAAP income from operations was RMB936 million (US$136 million), compared to RMB8 million in the same period in 2016 and RMB797 million in the previous quarter.

Operating margin was 7% for the first quarter of 2017, compared to -44% in the same period in 2016, and 4% in the previous quarter. Excluding share-based compensation charges, Non-GAAP operating margin was 15%, compared to 0% in the same period in 2016 and 16% in the previous quarter.

Income tax expense for the first quarter of 2017 was RMB148 million (US$22 million), compared to RMB94 million in the same period of 2016 and RMB110 million in the previous quarter. The change in the Group’s effective tax rates from year over year is primarily attributable to the tax differential from certain subsidiaries with preferential tax rates as well as the non-deductible expenses.

Net income attributable to Ctrip’s shareholders for the first quarter of 2017 was RMB82 million (US$12 million), compared to net loss of RMB1.6 billion in the same period in 2016 and net income of RMB645 million in the previous quarter.

Diluted earnings per ADS were RMB0.15 (US$0.02) for the first quarter of 2017. Excluding share-based compensation charges, Non-GAAP diluted earnings per ADS were RMB1.09 (US$0.16) for the first quarter of 2017.

As of March 31, 2017, the balance of cash and cash equivalents, restricted cash and short-term investment was RMB36 billion (US$5 billion).

Business Outlook

For the second quarter of 2017, the Company expects the net revenue growth to continue at a year-on-year rate of approximately 40-45%. This forecast reflects Ctrip’s current and preliminary view, which is subject to change.

Conference Call

Ctrip’s management team will host a conference call at 8:00PM U.S. Eastern Time on May 10, 2017 (or 8:00AM Beijing Time on May 11, 2017) following the announcement.

The conference call will be available on Webcast live and replay at: http://ir.ctrip.com . The call will be archived for twelve months at this website.

The dial-in details for the live conference call: U.S. Toll Free Number +1.888.268.4181, International dial-in number +1.617.597.5486, Passcode 34628326#. For pre-registration, please click

https://www.theconferencingservice.com/prereg/key.process?key=P4JWCM66K.

A telephone replay of the call will be available after the conclusion of the conference call until May 17, 2017. The dial-in details for the replay: U.S. Toll Free Number +1.888.286.8010, International dial-in number +1.617.801.6888, Passcode 30809529.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "may," "will," "expect," "anticipate," "future," "intend," "plan," "believe," "estimate," "is/are likely to," "confident" or other similar statements. Among other things, quotations from management and the Business Outlook section in this press release, as well as Ctrip’s strategic and operational plans, contain forward-looking statements. Ctrip may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, severe or prolonged downturn in the global or Chinese economy, general declines or disruptions in the travel industry, volatility in the trading price of Ctrip’s ADSs, Ctrip’s reliance on its relationships and contractual arrangements with travel suppliers and strategic alliances, failure to compete against new and existing competitors, failure to successfully manage current growth and potential future growth, risks associated with any strategic investments or acquisitions, seasonality in the travel industry in the relevant jurisdictions where Ctrip operates, failure to successfully develop Ctrip’s existing or future business lines, damage to or failure of Ctrip’s infrastructure and technology, loss of services of Ctrip’s key executives, adverse changes in economic and political policies of the PRC government, inflation in China, risks and uncertainties associated with PRC laws and regulations with respect to the ownership structure of Ctrip’s affiliated Chinese entities and the contractual arrangements among Ctrip, its affiliated Chinese entities and their shareholders, and other risks outlined in Ctrip’s filings with the U.S. Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of the issuance, and Ctrip does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

About Non-GAAP Financial Measures

To supplement Ctrip’s unaudited condensed consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Ctrip uses non-GAAP financial information related to product development expenses, sales and marketing expenses, general and administrative expenses, income from operations, operating margin, net income attributable to Ctrip’s shareholders, and diluted earnings per ordinary share and per ADS, each of which (except for net commission earned) is adjusted from the most comparable GAAP result to exclude the share-based compensation charges recorded under ASC 718, "Compensation-Stock Compensation" and its share-based compensation charges are not tax deductible. Ctrip’s management believes the non-GAAP financial measures facilitate better understanding of operating results from quarter to quarter and provide management with a better capability to plan and forecast future periods.

Non-GAAP information is not prepared in accordance with GAAP and may be different from non-GAAP methods of accounting and reporting used by other companies. The presentation of this additional information should not be considered a substitute for GAAP results. A limitation of using non-GAAP financial measures is that non-GAAP measures exclude share-based compensation charges that have been and will continue to be significant recurring expenses in Ctrip’s business for the foreseeable future.

Reconciliations of Ctrip’s non-GAAP financial data to the most comparable GAAP data included in the consolidated statement of operations are included at the end of this press release.

About Ctrip.com International, Ltd.

Ctrip.com International, Ltd. is a leading travel service provider of accommodation reservation, transportation ticketing, packaged tours, and corporate travel management in China. It is the largest online consolidator of accommodations and transportation tickets in China in terms of transaction volume. Ctrip enables business and leisure travelers to make informed and cost-effective bookings by aggregating comprehensive travel related information and offering its services through an advanced transaction and service platform consisting of its mobile apps, Internet websites and centralized, toll-free, 24-hour customer service center. Ctrip also helps customers book vacation packages and guided tours. In addition, through its corporate travel management services, Ctrip helps corporate clients effectively manage their travel requirements. Since its inception in 1999, Ctrip has experienced substantial growth and become one of the best-known travel brands in China.

For further information, please contact:

Investor Relations

Ctrip.com International, Ltd. Tel: (+86) 21 3406 4880 X 12300 Email: iremail@ctrip.com

Ctrip.com International, Ltd.
Unaudited Condensed Consolidated Balance Sheets
                                              December 31, 2016  March 31, 2017   March 31, 2017
                                              RMB                RMB              USD
                                              (unaudited)        (unaudited)      (unaudited)
ASSETS
Current assets:
Cash and cash equivalents                     18,434,681,251     18,920,074,163   2,748,732,299
Restricted cash                               1,744,490,307      2,207,070,084    320,645,933
Short-term investment                         14,112,862,288     14,899,370,234   2,164,599,348
Accounts receivable, net                      4,624,818,322      4,815,578,150    699,613,283
Prepayments and other current assets          6,994,589,672      5,774,923,880    838,988,244
Total current assets                          45,911,441,840     46,617,016,511   6,772,579,107
Long-term deposits and prepayments            1,147,279,197      1,144,354,941    166,253,333
Land use rights                               99,544,772         98,848,921       14,360,896
Property, equipment and software              5,591,960,081      5,564,904,437    808,476,354
Investment                                    20,532,822,365     21,478,148,266   3,120,372,540
Goodwill                                      56,015,185,590     56,015,185,590   8,137,956,995
Intangible assets                             13,924,769,931     13,828,398,969   2,009,007,289
Other long-term receivables                   815,586,298        814,640,214      118,351,960
Deferred tax assets                           375,311,594        380,088,976      55,219,807
Total assets                                  144,413,901,668    145,941,586,825  21,202,578,281
LIABILITIES
Current liabilities:
Short-term Debt                               6,887,309,589      10,692,421,425   1,553,408,505
Accounts payable                              7,278,791,082      6,416,823,521    932,244,235
Salary and welfare payable                    2,508,430,757      2,436,526,375    353,981,633
Taxes payable                                 1,084,241,429      669,154,536      97,215,617
Advances from customers                       8,190,840,057      6,275,608,546    911,728,345
Accrued liability for customer reward program 658,170,680        643,186,036      93,442,881
Other payables and accruals                   3,687,242,592      4,595,315,101    667,613,190
Total current liabilities                     30,295,026,186     31,729,035,540   4,609,634,406
Deferred tax liabilities                      3,607,882,808      3,562,005,006    517,492,592
Long-term Debt                                34,650,673,553     34,304,414,250   4,983,788,681
Other long-term Liabilities                   339,566,619        339,895,061      49,380,384
Total liabilities                             68,893,149,166     69,935,349,857   10,160,296,063
SHAREHOLDERS’ EQUITY
Share capital                                 4,960,354          5,059,117        734,995
Additional paid-in capital                    65,819,998,701     67,236,288,328   9,768,172,990
Statutory reserves                            237,495,820        237,495,820      34,503,693
Accumulated other comprehensive income        1,010,373,732      2,161,037,938    313,958,324
Retained Earnings                             6,699,580,613      6,782,028,594    985,301,690
Treasury stock                                (2,235,574,510)    (2,235,574,510)  (324,787,092)
Total Ctrip’s shareholders’ equity            71,536,834,710     74,186,335,287   10,777,884,600
Noncontrolling interests                      3,983,917,792      1,819,901,681    264,397,618
Total shareholders’ equity                    75,520,752,502     76,006,236,968   11,042,282,218
Total liabilities and shareholders’ equity    144,413,901,668    145,941,586,825  21,202,578,281
Ctrip.com International, Ltd.
Unaudited Condensed Consolidated Statements of Comprehensive Income
                                                              Quarter Ended    Quarter Ended      Quarter Ended    Quarter Ended
                                                              March 31, 2016   December 31, 2016  March 31, 2017   March 31, 2017
                                                              RMB              RMB                RMB              USD
                                                              (unaudited)      (unaudited)        (unaudited)      (unaudited)
Revenues:
Accommodation reservation                                     1,614,031,154    1,847,501,104      2,069,936,145    300,722,941
Transportation ticketing                                      1,949,003,126    2,446,350,221      2,875,375,346    417,738,166
Packaged tour                                                 556,495,540      466,510,925        701,832,134      101,963,060
Corporate travel                                              115,632,061      179,055,911        144,481,666      20,990,479
Others                                                        163,979,409      239,340,250        341,645,121      49,634,635
Total revenues                                                4,399,141,290    5,178,758,411      6,133,270,412    891,049,281
Less: business tax and related surcharges                     (221,134,734)    (111,476,576)      (48,208,523)     (7,003,795)
Net revenues                                                  4,178,006,556    5,067,281,835      6,085,061,889    884,045,486
Cost of revenues                                              (1,135,944,483)  (1,126,360,012)    (1,189,306,790)  (172,783,994)
Gross profit                                                  3,042,062,073    3,940,921,823      4,895,755,099    711,261,492
Operating expenses:
Product development *                                         (2,396,921,596)  (1,722,336,331)    (1,962,685,237)  (285,141,393)
Sales and marketing *                                         (1,543,324,251)  (1,470,860,760)    (1,880,630,701)  (273,220,406)
General and administrative *                                  (929,191,857)    (540,338,329)      (638,265,375)    (92,728,001)
Total operating expenses                                      (4,869,437,704)  (3,733,535,420)    (4,481,581,313)  (651,089,800)
(Loss)/ income from operations                                (1,827,375,631)  207,386,403        414,173,786      60,171,692
Interest income                                               190,697,649      126,421,150        130,280,136      18,927,263
Interest expense                                              (158,107,727)    (219,680,448)      (260,257,970)    (37,810,607)
Other income/(expense)                                        318,195,868      (286,715,547)      (88,401,074)     (12,843,020)
(Loss)/ income before income tax expense and equity in income (1,476,589,841)  (172,588,442)      195,794,878      28,445,328
Income tax expense                                            (93,531,478)     (110,246,775)      (148,445,807)    (21,566,395)
Equity in (loss)/ income of affiliates                        (107,909,642)    873,284,942        27,267,588       3,961,470
Net (Loss)/income                                             (1,678,030,961)  590,449,725        74,616,659       10,840,403
Less: Net loss attributable to noncontrolling interests       99,346,870       54,866,263         7,831,322        1,137,744
Net (Loss)/ income attributable to Ctrip’s shareholders       (1,578,684,091)  645,315,988        82,447,981       11,978,147
Comprehensive (loss) /income attributable to Ctrip’s          (1,489,894,815)  1,276,906,894      1,233,112,187    179,148,098
shareholders
Earnings per ordinary share
- Basic                                                       (27.90)          10.21              1.27             0.18
- Diluted                                                     (27.90)          9.46               1.21             0.18
Earnings per ADS
- Basic                                                       (3.49)           1.28               0.16             0.02
- Diluted                                                     (3.49)           1.18               0.15             0.02
Weighted average ordinary shares outstanding
- Basic                                                       56,591,142       63,194,669         64,940,107       64,940,107
- Diluted                                                     56,591,142       69,583,733         68,483,538       68,483,538
* Share-based compensation charges included are as follows:
Product development                                           1,071,652,534    338,257,956        283,241,889      41,149,740
Sales and marketing                                           184,425,162      68,550,655         48,779,212       7,086,706
General and administrative                                    579,558,336      182,401,276        189,720,083      27,562,774
Ctrip.com International, Ltd.
Reconciliation of  GAAP and Non-GAAP Results
(In RMB, except % and per share information)
                                                       Quarter Ended March 31, 2017
                                                       GAAP  Result         % of Net              Share-based          % of Net              Non-GAAP Result      % of Net
                                                                            Revenues              Compensation         Revenues                                   Revenues
Product development                                    (1,962,685,237)      32%                   283,241,889          5%                    (1,679,443,348)      28%
Sales and marketing                                    (1,880,630,701)      31%                   48,779,212           1%                    (1,831,851,489)      30%
General and administrative                             (638,265,375)        10%                   189,720,083          3%                    (448,545,292)        7%
Total operating expenses                               (4,481,581,313)      74%                   521,741,184          9%                    (3,959,840,129)      65%
Income from operations                                 414,173,786          7%                    521,741,184          9%                    935,914,970          15%
Net income attributable to Ctrip’s shareholders        82,447,981           1%                    521,741,184          9%                    604,189,165          10%
Diluted earnings per ordinary share (RMB)              1.21                                       7.54                                       8.75
Diluted earnings per ADS (RMB)                         0.15                                       0.94                                       1.09
Diluted earnings per ADS (USD)                         0.02                                       0.14                                       0.16
                                                       Quarter Ended December 31, 2016
                                                       GAAP  Result         % of Net              Share-based          % of Net              Non-GAAP Result      % of Net
                                                                            Revenues              Compensation         Revenues                                   Revenues
Product development                                    (1,722,336,331)      34%                   338,257,956          7%                    (1,384,078,375)      27%
Sales and marketing                                    (1,470,860,760)      29%                   68,550,655           1%                    (1,402,310,105)      28%
General and administrative                             (540,338,329)        11%                   182,401,276          4%                    (357,937,053)        7%
Total operating expenses                               (3,733,535,420)      74%                   589,209,887          12%                   (3,144,325,533)      62%
Income from operations                                 207,386,403          4%                    589,209,887          12%                   796,596,290          16%
Net income attributable to Ctrip’s shareholders        645,315,988          13%                   589,209,887          12%                   1,234,525,875        24%
Diluted earnings per ordinary share (RMB)              9.46                                       8.47                                       17.93
Diluted earnings per ADS (RMB)                         1.18                                       1.06                                       2.24
Diluted earnings per ADS (USD)                         0.17                                       0.15                                       0.32
                                                       Quarter Ended March 31, 2016
                                                       GAAP  Result         % of Net              Share-based          % of Net              Non-GAAP Result      % of Net
                                                                            Revenues              Compensation         Revenues                                   Revenues
Product development                                    (2,396,921,596)      57%                   1,071,652,534        26%                   (1,325,269,062)      32%
Sales and marketing                                    (1,543,324,251)      37%                   184,425,162          4%                    (1,358,899,089)      33%
General and administrative                             (929,191,857)        22%                   579,558,336          14%                   (349,633,521)        8%
Total operating expenses                               (4,869,437,704)      117%                  1,835,636,032        44%                   (3,033,801,672)      73%
Loss/(income) from operations                          (1,827,375,631)      -44%                  1,835,636,032        44%                   8,260,401            0%
Net loss/(income) attributable to Ctrip’s shareholders (1,578,684,091)      -38%                  1,835,636,032        44%                   256,951,941          6%
Diluted earnings per ordinary share (RMB)              (27.90)                                    32.44                                      4.54
Diluted earnings per ADS (RMB)                         (3.49)                                     4.06                                       0.57
Diluted earnings per ADS (USD)                         (0.54)                                     0.63                                       0.09
Notes for all the condensed consolidated financial schedules presented:
Note 1: The conversion of Renminbi (RMB) into U.S. dollars (USD) is based on the certified exchange rate of USD1.00=RMB6.8832 on March 31 2017 published by the Federal Reserve Board.

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/ctrip-reports-unaudited-first-quarter-of-2017-financial-results-300455103.html

SOURCE Ctrip.com International, Ltd.

https://rt.prnewswire.com/rt.gif?NewsItemId=CN86470&Transmission_Id=201705101800PR_NEWS_USPR_____CN86470&DateId=20170510



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