Tag Archives: Ctrip

Ctrip latest Business & Financial news from Doug Young, the Expert on Chinese High Tech Market, (former Journalist and Chief editor at Reuters Asia)

E-Commerce: Dangdang CFO Goes, Suning’s New Trip 当当网首席财务官请辞 苏宁进军在线旅游业

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There are a couple of interesting news bits from the e-commerce space, one from e-commerce giant Dangdang (NYSE: DANG) whose CFO has just resigned, and the other on an interesting new move by an increasingly aggressive Suning (Shenzhen: 002024) into online travel services. I was originally planning to start with Suning, as that news looks the most interesting in terms of broader strategy. But then I had a look at Dangdang’s stock, and was a bit surprised to see it plunged more than 15 percent after news of the CFO resignation came out, indicating investors are clearly concerned about this development. Dangdang itself wasn’t saying much, except that CFO Conor Yang, who joined the company 2 years ago and saw it through its IPO in late 2010, tendered his resignation for personal reasons. (company announcement; Chinese article) Yang helped Dangdang raise more than $300 million in the successful IPO, with Dangdang shares initially soaring in their trading debut. But since then they have tumbled due to fierce competition in China’s e-commerce space that has led Dangdang and most of its peers deeply into the red, and now they trade at about half of their IPO level. It’s never good to lose a CFO, and it’s especially bad when your CFO leaves when the company is so deeply in the red. Such departures often imply the CFO, who is traditionally more conservative about financial matters, may believe his bosses are pressuring him to understate the nature of bad news like big losses. If that’s the case, look for more turbulence for this already-battered stock as its accounting comes under increasing scrutiny. Meantime, Suning, which has aggressively moved into e-commerce over the past year and is now the country’s fourth-biggest player, announced it is getting into the online travel business by selling airplane tickets and hotel reservation services. (English article) This move looks interesting as the online travel space is already quite crowded, dominated by established players like Ctrip (Nasdaq: CTRP) and eLong (Nasdaq: LONG) and recent entries to the space by e-commerce rival 360Buy and search giant Baidu (Nasdaq: BIDU). (previous post) Suning seems to be quite good at executing its new business strategies, and thus could offer a serious product in the space in a relatively short time. If that happens, along with all these other new initiatives, look for the online travel sector to see a serious jump in competition — and profit erosion — in the next 2 years.

Bottom line: Dangdang’s CFO resignation could point to accounting issues, while Suning’s entry to online travel services will further heat up this increasingly crowded space.

Related postings 相关文章:

◙ Dangdang Loss Balloons In E-Commerce Wars 当当网在电子商务大战中亏损严重

◙ Dangdang and Gome: Marriage Ahead? 当当和国美：联姻前夕？

◙ Baidu’s Qunar: Going Places 百度投资的去哪儿网：前途无量

360Buy Looks Around to Real Estate 京东商城试水房地产

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I have no idea what’s happening behind the scenes at 360Buy, but a growing number of mixed signals from this online retailing giant seem to portray a company sinking into turmoil, including the latest news that it is now getting into the real estate services business. (English article) According to the latest reports, 360Buy, which also goes by the name of Jingdong Mall, has teamed up with a Beijing real estate company called Tianheng as a potential prelude to entering the online home shopping business. While homes are also a consumer retail product, selling such major items online is far different from 360Buy’s core retail business of selling everyday products like electronics, clothing and books. What’s more, 360Buy has no experience in this kind of transaction, which is far more complex than buying a tube of toothpaste over the Internet. This new initiative is just the latest sign of a company that is losing focus as big new investors who pumped more than $1 billion into it last year seem to be looking for any and every new business opportunity they can think of. The company entered the highly competitive online book selling business in January (previous post), and in February it made a strange move into the online travel business, putting it into direct competition with well established players like Ctrip (Nasdaq: CTRP) and eLong (Nasdaq: LONG). (previous post) The steady stream of new initiatives comes not long after the investor group that included Russia’s Digital Sky Technologies made the $1 billion-plus investment about a year ago, leading me to believe this group is at least partly behind these moves as its members anxiously look to justify their huge investment. Amid the stream of new business initiatives, increasing signs have emerged of a behind-the-scenes battle over the timing of an initial public offering by the company. 360Buy’s founder Liu Qiangdong has repeatedly said that no such offering is in the works for at least the next 2 years. But at the same time, another steady stream of reports that appear to be coming from the banking world keep emerging that say the company has hired an investment bank as it prepares to make a multibillion-dollar IPO. (previous post) The increasingly mixed signals look like a worrisome trend for potential investors, indicating this company is rapidly losing direction and focus as a number of major stakeholders all try to take control. Presumably the company still has lots of cash and doesn’t urgently need to raise money through an IPO after its big fund raising last year. Still, if it does go ahead with a public offering, I would caution investors to be very wary of buying into this company until it can regain some of its focus and concentrate on becoming profitable.

Bottom line: 360Buy’s move into real estate services is the latest mixed signal from the company, which appears to be losing focus as stakeholders and managers battle for control.

Related postings 相关文章:

◙ Message to 360Buy: Make Up Your Mind! 京东商城IPO“暗战”

◙ 360Buy Losing Focus With Travel Plan 京东商城涉足在线旅行服务业 偏离核心业务

◙ 360Buy Heats Up E-Books, People’s Daily Goes to Market 京东商城高调进军电子书,人民网开启上市进程

Baidu’s Qunar: Going Places 百度投资的去哪儿网：前途无量

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We’re getting a bit more clarity on Qunar, the online travel site that made headlines last June when it received a major investment from search leader Baidu (Nasdaq: BIDU), following the release of some new financial data showing a company that looks quite intriguing and potentially positioned to soon challenge eLong (Nasdaq: LONG) for the place as the sector’s second largest player. I’ll be the first to admit I was a bit skeptical when Baidu forked out a hefty $300 million for an unspecified stake in Qunar last year, assuming the stake was probably a minority interest and also unconvinced about the wisdom of investing in an area so far removed from Baidu’s core search business. (previous post) But now Chinese media are reporting that according to a Baidu filing with the US securities regulator, it actually purchased 62 percent of Qunar in the transaction, making it the company’s major shareholder. (Chinese article) Some quick math will show that investment values Qunar at just under $500 million. A further look will show that eLong, which I’ve long considered an industry laggard, also has a market capitalization in the same range, at just over $500 million. eLong also made headlines last November when longtime minority investor Expedia (Nasdaq: EXPE), a top US online travel agent, paid a hefty premium to boost its stake to a majority share. (previous post) But after rallying on the news, eLong shares have since given back nearly all of their gains and now trade at about $15, far below the $23 per share that Expedia paid to boost its position. All this reflects the reality that despite its longtime presence in the industry and Expedia ties, eLong has failed to ever bridge the large gap between itself and market leader Ctrip (Nasdaq: CTRP), whose market capitalization of around $3 billion means investors think it is worth six times as much as eLong. Founded in 2005, Qunar had revenue of about $23 million and a profit of about $420,000 from the time of Baidu’s mid-year purchase of its controlling stake, according to the newly released data. That would translate to annual revenue of about $46 million and a profit approaching $1 million, versus eLong’s $93 million in revenue and $6.2 million in profits last year. So clearly eLong is more profitable and twice the size of Qunar in terms of revenue; but eLong was also founded in 1999, meaning it had a 6 year head start over Qunar. Based on Qunar’s valuation from the Baidu deal and eLong’s inability to become bigger and pose a more serious challenge to Ctrip, I would say that Qunar looks like a company to watch closely, especially following the Baidu tie-up which could see it use Baidu’s hugely popular search and other sites to boost its position. If things proceed smoothly, I wouldn’t be surprised at all to see Qunar pass eLong in terms of revenue in the next 2 years, with a potential IPO for the company also possible in that timeframe.

Bottom line: New financials for Baidu-invested online travel site Qunar show a company poised to make a potential IPO and challenge eLong for the sector’s number-two spot in the next 2 years.

Related postings 相关文章:

◙ Baidu’s Takes a $300 Mln Spin on Travel Market 百度斥资3亿美元进军旅游市场

◙ Expedia Boosts China Ties, Watch Out Ctrip Expedia增持艺龙股份携程要小心了

◙ 360Buy Losing Focus With Travel Plan 京东商城涉足在线旅行服务业 偏离核心业务

Ctrip Results: Investing for the Future 携程未雨绸缪提高未来竞争力

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Ctrip (Nasdaq: CTRP) has just released an earnings report that has left investors unsure of what to think of this travel bellwether, though I’m guardedly encouraged by signs that show it is preparing for a future of growing competition. Its latest results show that revenue grew 18 percent in the fourth quarter and is expected to maintain that rate in the current period, but that operating and net profit both fell by similar amounts — not exactly encouraging signs for an industry leader. (company announcement; Chinese article) The culprit behind the so-so results seems to be ballooning  expenses, which rose 46 percent in the fourth quarter due to a number of initiatives, including expansion of the company’s headquarters in Shanghai and procurement of new land in the interior city of Chengdu for expansion there as well. Ctrip also purchased the remaining 10 percent of Wing On Travel it didn’t already own, making it the full owner of the popular Hong Kong travel agency. Investors were a bit unsure what to think of the results, initially bidding up Ctrip shares slightly after the results came out, only to change their mind and ultimately bid the shares down by 1 percent. Clearly no one likes to see revenue growth stalling and profits falling, but I’ve always considered this company a strong innovator and leader in its core travel services space, and its latest jump in costs look to me like it’s making solid moves to build for the future. That could be important, as chief rival eLong (Nasdaq: LONG) saw its longtime stakeholder Expedia (Nasdaq: EXPE) become its controlling stakeholder late last year, indicating the leading US online travel services firm may be preparing an aggressive push into the China market. (previous post) What’s more, another up-and-coming player named Qunar got a major boost last year when it received a $300 million investment from leading online search firm Baidu (Nasdaq: BIDU). (previous post) Ctrip has always been a strong innovator, and its Shanghai and Chengdu expansions reflect its growing needs for workers and space as it adds interesting new products and services to its lineup. I also like the Wing On initiative, as that could position Ctrip for growth in the lucrative Hong Kong market and also provide a springboard into other foreign markets. On the whole, these latest results look relatively encouraging, though Ctrip will need to show that its increased spending can ultimately lead to stronger revenue gains and a return to bottom line growth.

Bottom line: Ctrip’s latest results show a company that is investing heavily for a future of stiffer competition, but it will soon need to show some returns on those new investments.

Related postings 相关文章:

◙ Expedia Boosts China Ties, Watch Out Ctrip Expedia增持艺龙股份携程要小心了

◙ China Lodging: Rebound Ahead 中国经济型酒店业绩回升在望

◙ Ctrip’s Latest Initiative: Insurance 携程新举动：保险

News Digest: February 21, 2012 报摘： 2012年2月21日

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The following press releases and media reports about Chinese companies were carried on February 21. To view a full article or story, click on the link next to the headline.

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◙ ZTE (HKEx: 763) Announces $4 Bln Chipset Agreement With Qualcomm (Nasdaq: QCOM) (HKEx announcement)

◙ Ctrip (Nasdaq: CTRP) Reports Q4 and Full Year Results (PRNewswire)

◙ Shenzhen Court Rejects Apple’s (Nasdaq: AAPL) E-Mail Evidence (English article)

◙ China’s TD-LTE Trials Enter Phase II (English article)

◙ 360Buy Formally Launches E-Book Site, To Later Add Digital Music (Chinese article)

◙ Latest calendar for Q1 earnings reports (Earnings calendar)

360Buy Losing Focus With Travel Plan 京东商城涉足在线旅行服务业 偏离核心业务

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China’s Internet companies are famous for straying from their core businesses in pursuit of new growth even though such initiatives seldom work, and now e-commerce specialist 360Buy looks set to joint the club with a new travel services initiative. (English article) Nearly ever major Chinese Internet firm has dabbled in areas outside its core competency, with names like Baidu (Nasdaq: BIDU), Sina (Nasdaq: SINA) and Alibaba all making such initiatives, nearly all of which have ended in abysmal failures. None of these companies seem to have noticed that the big western names like Google (Nasdaq: GOOG), Amazon (Nasdaq: AMZN) and Expedia (Nasdaq: EXPE) have succeeded largely by focusing on their core areas, and only expanding into new ones when they can leverage some of their existing expertise. So that makes the latest move by 360Buy, which also goes by the name Jingdong Mall, look perfectly consistent with what other Chinese companies have done. In this case, 360Buy says it will launch a hotel booking service, and that it has already signed up 20,000 hotels in China, Hong Kong and Macau as partners. A company spokesman said the move is part of the company’s drive to become a more diversified online services company, instead of just an e-commerce specialist. Never mind the fact that the online travel services sector is already quite competitive, dominated by Ctrip (Nasdaq: CTRP) and Expedia-controlled eLong (Nasdaq: LONG), or that Baidu also recently entered the space with its investment in a company called Qunar. (previous post) We should also ignore the fact that 360Buy is currently locked in a series of price wars with rivals like Dangdang (NYSE DANG), and that rival Alibaba has learned its lesson and remains focused on e-commerce after its foray into online search ended in a complete disaster several years ago. In fact, I suspect this latest initiative is probably designed to generate market interest in 360Buy, which wants desperately to make a New York IPO to raise much needed cash. 360Buy launched its IPO process last fall, only to see the offering fall victim to abysmal market sentiment due to a series of accounting scandals at US-listed Chinese companies. This new travel services initiative looks like fantasy to me, and an initiative that’s 95 percent likely to fail. But those kinds of difficult odds never stopped a Chinese company from this kind of initiative before, and I would expect to see a few more strange initiatives coming out of 360Buy before it relaunches its IPO bid, probably sometime in the first half of this year.

Bottom line: 360Buy’s new initiative in the travel services space is almost guaranteed to fail, and could be more designed to generate hype in the run-up to a US IPO later this year.

Related postings 相关文章:

◙ E-Commerce: 360Buy Awaits IPO Window, Amazon Expands 京东IPO融资心切 亚马逊物流扩张加剧竞争

◙ 360Buy Heats Up E-Books, People’s Daily Goes to Market 京东商城高调进军电子书,人民网开启上市进程

◙ Internet Investors Seek Refuge in Big Names 互联网投资者选择性支持中国市场领头羊

 

 

HK Woes Point to Shanghai Sell-Off Next Week 港股跌宕起伏沪深後市堪忧

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China’s struggling stock markets are taking a much-needed weeklong break for the National Day holiday, but weak sentiment has continued unabated in Hong Kong, where the stock market tanked earlier in the week and shares of premier brokerage Citic Securities (HKEx: 6030) stumbled badly in their first trading debut outside China. The Hong Kong board started off the week in free-fall, shedding 7.6 percent on Monday and Tuesday before staging a rally on Thursday. But it was still down 2.4 percent at the start of the Friday trading day, and the volatility clearly reflects investor angst over what will happen when trading resumes in Shanghai and Shenzhen next Monday, with more sell-offs likely. In the midst of the chaos, shares of Citic Securities (Shanghai: 600030), the first in a string of high-profile listings of major state-connected firms aimed at propping up the markets, stumbled out of the gate, losing as much as 10.5 percent from their IPO price on their first trading day before finishing the day unchanged, even as the broader market rallied 5.7 percent. (English article) The weak debut, which came after Citic Securities already scaled back the offering and priced its shares at the low end of their range, bodes poorly for a number of other major state-run firms lining up to go public, including Sany Heavy Industries (Shanghai: 600031), which is also planning a listing in Hong Kong, and China Communications Construction, which is planning a Shanghai listing. (previous post). Meantime, the weakness has led two premier Hong Kong-listed China Internet names, Tencent (HKEx: 700) and Alibaba.com (HKEx: 1668), to do the once unthinkable and actually buy back their shares (Tencent article; Alibaba article). They join a list of peers that has so far included many mid-sized US-listed China tech firms like Ctrip (Nasdaq: CTRP) and Renren (NYSE: RENN) but has yet to see the likes of top names like Baidu (Nasdaq: BIDU) and Sina (Nasdaq: SINA) resort to such buy-backs. But if the current sell-off continues, we might even see these big names join the buy-back frenzy, showing just how low sentiment has sunk towards China plays, especially Internet stocks.

Bottom line: China’s stock markets will fall when trading resumes next week, extending sell-offs in Hong Kong and New York while Chinese markets were closed for the October 1 holiday.

Related postings 相关文章:

◙ Beijing IPO Campaign to Boost Markets Falls Flat 大宗IPO提振中国股市或成泡影

◙ China Offers Up Premier IPOs to Revive Markets 大企业沪港上市 政府借机重燃沪港生机

◙ CITIC Securities $2 Bln IPO Looks Good, With Potential to Jumpstart HK 中信证券香港IPO值得期待

US China Stocks: Bloodbath Becomes Correction 在美上市中资股遭抛售 迈入股价修正新阶段

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The sell-off of US-listed China stocks accelerated on Thursday, with shares of premier names Baidu (Nasdaq: BIDU) and Sina (Nasdaq: SINA) each dropping around 10 percent after US media quoted a securities regulator saying his agency was looking into accounting fraud by US-listed Chinese firms. (English article) But after months of negative news and selling of these stocks, I’m convinced this sell-off is moving into a new phase that marks a long-awaited correction in unrealistic valuations for many of these companies during a massive run-up in their prices over the last few years fueled by China Internet hype. A closer look at the market will show that the Thursday sell-off was hardly broad-based but rather was largely limited to companies with overinflated valuations. Even after a sell-off that has seen its shares drop more than 30 percent in the last 3 of weeks, Sina shares still trade at a ridiculously high price-to-earnings ratio of 115 times earnings for the next 12 months. Baidu shares, which have lost a similar amount over the same period, now trade at a more reasonable but still high PE of 42. By comparison, online travel leader Ctrip (Nasdaq: CTRP) and leading social networking site Renren (NYSE: RENN) both saw their shares actually gain on Wall Street on Thursday, as each announced a share buyback plan of $100 million and $150 million, respectively. (Ctrip announcement; Renren announcement) Perhaps these buy-back announcements helped to protect Ctrip and Renren’s shares to some extent in yesterday’s sell-off; but more importantly, Ctrip now has a more modest valuation of 30 times earnings for the next 12 months, while Renren’s PE is negative as it’s still losing money. All that said, I think it’s highly unlikely that these bigger, industry leaders are the focus of regulatory investigations, which are mostly reserved for the smaller US-listed China firms without big-name accountants. Instead, this continued sell-off looks like it has turned into a much needed correction for overhyped Chinese stocks, which will continue until their valuations come down to more reasonable levels.

Bottom line: Investors who profited from a run-up in US-listed Chinese stocks over the last few years are seizing on a confidence crisis to pocket their gains.

在美上市中资股周四再遭抛售。美国媒体引述美国证券交易委员会一位官员的话表示，司法部正在调查一些在美国股票交易所挂牌的中资企业财务违规问题。受此影响，百度<BIDU.O>、新浪<SINA.O>等双双大跌约10%。不过，经过数月来的负面消息与相关股票的抛售，我认为中资股抛售正进入新阶段，开始修正过去几年来对这些企业逐渐形成的不现实估值。细看市场表现，你会发现周四中资股并非全面遭遇抛售，主要局限於估值过高企业。过去三周新浪股价虽已大跌超30%，但其未来12个月动态市盈率仍高达115倍。百度股价同期跌幅与新浪几乎相当，目前其市盈率为42倍，相对合理一些，但仍非常高。相比之下，中国国内领先的携程旅行网<CTRP.O>与社交网络人人网<RENN.N>周四实际逆势上扬。两公司均宣布股票回购计划，规模分别为1亿美元与1.5亿，也许回购计划在一定程度上帮助两公司股票在昨天的抛售中免遭一劫。但更重要的是，携程未来12个月动态市盈率为30倍，人人网由於仍在亏损，市盈率为负值。虽然如此，我认为这些行业领头羊不大可能是此次监管调查的焦点，调查重点可能主要集中在所用会计企业不太知名的、在美上市较小中资企业。此次继续抛售看起来正转变为中国概念股的修正，相关企业估值回到合理水平前，股价修正还会继续。

一句话：过去几年中利用在美上市中资股获利的投资者正抓住此次信任危机售股套现。

Related postings 相关文章:

◙ US-Listed China Firms Fight Back — Finally 中国赴美上市公司最终还击

◙ Securities Regulator Seizes on US Confidence Crisis 中国证监会或介入企业海外上市

◙ Accounting Scandal Claims AutoChina As Second Big Victim

 

News Digest: September 30, 2011

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The following press releases and media reports about Chinese companies were carried on September 30. To view a full article or story, click on the link next to the headline.

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◙ China Internet Stocks Fall in New York on U.S. Investigation (English article)

◙ 55tuan Denies Rumors of 70% Workforce Cut (English article)

◙ Ctrip (Nasdaq: CTRP) Announces Up to $100 Million Share Repurchase Program (PRNewswire)

◙ Renren (NYSE: RENN) Announces US$150 Million Share Repurchase Program (PRNewswire)

◙ Court Upholds Verdict Against Qihoo 360 (NYSE: QIHU) in Tencent (HKEx: 700) Suit (Chinese article)

News Digest: September 23, 2011

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The following press releases and media reports about Chinese companies were carried on September 23. To view a full article or story, click on the link next to the headline.

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◙ Unicom (HKEx: 762) Buys 8 Mln 3G Smartphones to Ease Supply Shortage (Chinese article)

◙ Alibaba Said to Be Valued at $32 Billion as Temasek, DST Invest in Company (English article)

◙ Ctrip (Nasdaq: CTRP) Announces Plan to Repurchase Up to $15 Million in Shares (PRNewswire)

◙ SMG, Endemol Partner on TV Content Production (English article)

◙ Deadline Announced for Lead Plaintiffs in the Class Action Suit Against SinoTech Energy (Businesswire)