Ctrip.Com International Ltd (ADR)(NASDAQ:CTRP) stock lost over 1.5% on March 15th,2018 in the March 15th, 2018 (as of 7:37AM EDT; Source: Google finance) on the back of lower than expected forecasts.
The group is transitioning through short-term challenges, including the impact from the unfortunate PR incident in late last year. As a result, for the first quarter of 2018, the group forecasts the net revenue growth at the year-on-year rate of over 9% to 11%, which is expected based on Ctrip’s new revenue recognition standard, while taking into account the revenue reported for the same period in 2017.
The group has 300 million registered users traveling in 214 countries and regions globally, with a completed transaction totaling RMB560 billion, excluding Skyscanner. The business achieved impressive revenue growth for the year, which rose 39% on year-on-year basis to RMB26.8 billion. Chinese travelers made over 130 million outbound trips in 2017. The outbound trips would only grow bigger and forecasted to grow to over 200 million trips per year by 2020, as per the China National Tourism Administration.
Meanwhile, Skyscanner investments started to generate solid synergies. Skyscanner accumulated over 17 million monthly active users. Skyscanner develops a direct booking engine which boosted their own conversions on Skyscanner by over 50%.
Recently the group launched Trip.com, which is Asia-Pacific-focused, one-stop international travel platform. Trip.com is growing rapidly in their targeted Asian markets. Skyscanner as well as Trip.com, Ctrip has established a solid foundation to serve its non-Chinese customers around the world.
The Net revenues surged 26% yoy basis to RMB6.6 billion during the fourth quarter of 2017. Annual net revenue rose 39% yoy to RMB26.8 billion, and continued to execute on their strategy and are encouraged by their rapid growth, especially in international expansion and penetration of the lower-tier cities.
The group is also focusing in cross selling opportunities. Over 20% of newly acquired air ticketing customers make at least 1 purchase in hotel reservation for each of the following years. The corresponding cross-selling rate between air and train is even higher at about 30%.