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Ctrip's Q3 net revenue increases by 15% year-on-year

11/08/2018| 11:57:33 AM| 中文

Ctrip's accommodation reservation revenue for the third quarter of 2018 increased 21% to $528 million, transportation ticketing revenue rose 6% to $527 million.

Ctrip today announced its unaudited financial results for the third quarter ended September 30, 2018. 

Key Highlights for the Third Quarter of 2018 

* Net revenue increased by 15% year-on-year to RMB9.4 billion (US$1.4 billion) for the third quarter of 2018, which also represents an increase by 28% from the previous quarter.

* Operating margin was 16% for the third quarter of 2018 compared to 10% for the previous quarter. Excluding share-based compensation charges, Non-GAAP operating margin was 20% for the third quarter of 2018, compared to 16% for the previous quarter. 

Ctrip’s international businesses sustained robust growth momentum.

* Excluding Skyscanner, international air businesses growth almost tripled the industry growth.

* Skyscanner’s direct booking program continues to gain momentum, delivering around 250% revenue growth year-on-year in the third quarter.

Ctrip increased its presence in lower-tier cities.

* Ctrip brand’s low-star hotel room-night growth accelerated to approximately 50% year-on-year in the third quarter.

* Total gross merchandise value of the offline stores grew over 80% year-on-year in the third quarter.

* In China, the number of hotels with guaranteed room allotments increased by approximately 160% year-over-year.

“Ctrip reported solid results in the third quarter of 2018,” said Jane Sun, Chief Executive Officer. “We are seeing our large, growing and loyal customer base continue to increase their engagements on Ctrip. We are selling more travel products across our customer’s travel itinerary. With our strong foundation in the travel industry, despite the ongoing macro uncertainty, we are confident that we are the best travel company to capture more travel market share going forward.”

“Ctrip continued making solid progress in each of our business area in the third quarter of 2018,” said James Liang, Executive Chairman. “We have established a strong track record and are committed to continuing riding the travel growth wave: during high tides, we can boost our scale and profitability; and during low tides, we can extend our competitive advantages and accelerate market share gain. We will continue to work hard to extend the advantages of scale, while seizing the opportunities presented by globalization to drive Ctrip’s long-term success.”

Third Quarter of 2018 Financial Results and Business Updates 

For the third quarter of 2018, Ctrip reported net revenue of RMB9.4 billion (US$1.4 billion), representing a 15% increase from the same period in 2017. Net revenue for the third quarter of 2018 increased by 28% from the previous quarter. 

Accommodation reservation revenue for the third quarter of 2018 was RMB3.6 billion (US$528 million), representing a 21% increase from the same period in 2017, primarily driven by an increase in accommodation reservation volume. Accommodation reservation revenue for the third quarter of 2018 increased by 29% from the previous quarter, primarily due to seasonality. 

Transportation ticketing revenue for the third quarter of 2018 was RMB3.6 billion (US$527 million), representing a 6% increase from the same period in 2017.

Transportation ticketing revenue increased by 20% from the previous quarter, primarily due to seasonality. Packaged tour revenue for the third quarter of 2018 was RMB1.4 billion (US$201 million), representing a 28% increase from the same period in 2017, primarily driven by an increase in volume growth of organized tours and self-guided tours. Packaged tour revenue for the third quarter of 2018 increased by 64% from the previous quarter, primarily due to seasonality. 

Corporate travel revenue for the third quarter of 2018 was RMB267 million (US$39 million), representing a 31% increase from the same period in 2017, primarily driven by expansion in travel product coverage. Corporate travel revenue for the third quarter of 2018 increased by 5% from the previous quarter.

Gross margin was 79% for the third quarter of 2018, compared to 84% for the same period in 2017, and 80% for the previous quarter.

Product development expenses for the third quarter of 2018 increased by 14% to RMB2.5 billion (US$363 million) from the same period in 2017 and increased by 11% from the previous quarter, primarily due to the increase in product development personnel related expenses. Product development expenses for the third quarter of 2018 accounted for 27% of the net revenue. Excluding share-based compensation charges, non-GAAP product development expenses for the third quarter of 2018 accounted for 24% of the net revenue, which remained consistent with the same period in 2017 and decreased from 27% for the previous quarter.

Sales and marketing expenses for the third quarter of 2018 increased by 14% to RMB2.7 billion (US$394 million) from the same period in 2017 and increased by 23% from the previous quarter, primarily due to an increase in sales and marketing related activities. Sales and marketing expenses for the third quarter of 2018 accounted for 29% of the net revenue. Excluding share-based compensation charges, non-GAAP sales and marketing expenses for the third quarter of 2018 accounted for 29% of the net revenue, which remained consistent with the same period in 2017 and the previous quarter.

Income from operations for the third quarter of 2018 was RMB1.5 billion (US$215 million), compared to RMB1.6 billion for the same period in 2017 and RMB724 million for the previous quarter. 

Income tax expense for the third quarter of 2018 was RMB257 million (US$37 million), compared to RMB368 million for the same period of 2017 and RMB322 million for the previous quarter. 

As of September 30, 2018, the balance of cash and cash equivalents, restricted cash and short-term investments was RMB63.3 billion (US$9.2 billion).

Business Outlook

For the fourth quarter of 2018, the Company expects the net revenue growth to continue at a year-on-year rate of approximately 15-20%, which is calculated on the estimated net revenue of the fourth quarter of 2018 under the new revenue recognition standard and the net revenue of the fourth quarter of 2017 retrospectively adjusted. This forecast reflects Ctrip’s current and preliminary view, which is subject to change. 

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