Ctrip's capital expansion is still continuing

In order to make X other than BAT, Ctrip's capital expansion continues.

Recently there is news that Ctrip plans to acquire the shares of 65% eLong held by Expedia, the US online travel company, in the form of equity swap. The transaction valued Artron at between 800 million and 1 billion U.S. dollars, A premium of about 33%. Affected by this news, eLong's share price rose more than 60% in the last two weeks, surging 22% on the night of June 30, while Ctrip's stock price also went up, reaching a record market value of 8.8 billion USD.

However, Expedia said in a statement on July 7 that the rumors were not accurate and the company plans to maintain its long-term status as an investor in the art market. Ctrip said it did not make any response. According to Yang Yanfeng, associate researcher at China Tourism Research Institute, Ctrip acquired 65% equity of eLong still imagined space. "But if you want to buy, there are a lot of hurdles. Except for Expedia's willingness to sell all of its equity, there are potential monopoly issues as the top online domestic hotel reservation market, top-tier deals and mergers and acquisitions."

Behind the acquisition rumors

Like Ctrip, Expedia is an online travel product booking service that earns commission income primarily by helping travel product suppliers sell products. The industry believes that when Expedia chose to buy shares of eLong, is largely a fancy potential Chinese online travel market.

According to iResearch statistics show that in the first quarter of 2014 China's online travel market transactions 56.42 billion yuan, an increase of 16.9%; OTA market revenue 2.99 billion yuan, an increase of 17.7%. According to its previous forecast, by 2017, the scale of online travel market transactions will reach 478.23 billion yuan, double the 2013.

Unfortunately for Expedia, eLong's performance is not satisfactory. As the second in the industry, eLong has always hoped to gain more market share through the strategy of "price war" and get the top position in the industry. Therefore, its competition with Ctrip is from the "secret" to the high-profile name, tit for tat "competition, the escalating competition situation, especially in the areas of its good hotel. For example, Elan CEO Cui Guangfu said late last year that Ctrip "two-thirds of the hotel is 10% more expensive than the Artilong" and to Ctrip CEO Liang Jian "appointment" than the promotion efforts and prices. Ctrip is also a sniper all the way, before the eLong already announced 500 million yuan out for promotion.

The result of this Rush price is the share of the increase, the performance has declined. Earnings, eLong in the first quarter of 2014 net loss of 35.4 million yuan, which is its seventh consecutive quarterly operating loss. Although its hotel booking volume increased by 43% over the same period of last year, hotel reservation revenue increased by only 14% over the same period, and the growth rate dropped sharply for two consecutive quarters.

On the other hand, Ctrip, relatively small impact, in the first quarter of 2014 still net profit of 115 million yuan, and in the hotel booking revenue and hotel room night rate of growth of these two indicators are significantly ahead of eLong.

The rumors of the acquisition of eLong Ctrip appear, despite the two sides have not yet given a clear response, but according to investment circle analysis, "appears in the capital market this rumor is an abnormal phenomenon, and for both buyers and sellers, the most May be the seller in order to raise their own prices in advance leaked Ctrip has always been in the buyer's role.

Since 2013, Ctrip has been busy in "Happy Valley" and has invested in three budget hotels such as Home Inns, China Living, 7 days, hotel customer monitoring and management system company, Yi Road car, Hi rental, cicada travel and so on. April 10 this year, Ctrip to 220 million US dollars investment and eLong are the same way Tencent Department, accounting for about 30% of the shares become the second largest shareholder. On April 27, Ctrip also announced an agreement with Touyou to acquire a 15 million U.S. dollar worth of Touyou at the IPO price. In the meantime, Ctrip and where to network capital cooperation news never stopped.

If the rumors of acquisition of eLong Ctrip can sit on the ground, the industry believes that this will be the triad profitable situation. "觊 Expedia Expedia in the Chinese market can alleviate the troubles caused by Elong's loss of performance; due to the price war and mired in a quagmire of the eLong, and Ctrip can finally cease operations, and continue to make the hotel reservation business; Ctrip will also be rapidly strengthened Monopoly in the hotel reservation market. "

Speed ​​up the BATX landscape

However, the rumors of Ctrip acquisition rumors spread out, the most embarrassing or 3 months ago, Ctrip came out with the merger where to go. Where to go in 2013 to compete for market share, large-scale promotion and investment mobile terminal, paid a painful price, in February 2014, where to go to the 2013 earnings release, its net loss attributable to shareholders of 187.3 million yuan , Doubling from 2012.

In June 2011 Baidu's where to go after Baidu received a large flow of resources into the injection, but as early as January 2011 in May 2011 eLong was Tencent shares. Ctrip because the plate large in the ensuing years has been an independent variable, the current market value of Ctrip is about 84 billion US dollars. However, with the intensification of BAT's efforts to divide the Internet through capitalization, the amount of equity investments made by various companies to close the industry is getting higher and higher. Ctrip also entered the sight. In early 2014, there were rumors that Alibaba intends to acquire shares in Ctrip. In April, Baidu will acquire Ctrip, and where to go to its merger, in July came the acquisition of Tencent E-Ctrip.

Ctrip's position in the online travel industry is self-evident. In the first quarter of 2014, Ctrip ranked No.1 in the OTA market with a market share of over 51.9%, with Elong 9.3% ranking second, with 6.2% Share in the third.

Since Liang Jianzhang returned to Ctrip in 2013, he started mainly with two things: launching the "thumbs-up + cement" strategy in an all-round way and migrating to the mobile terminal; and further plowing the way with investment. The data shows the effectiveness of the reform: In 2013, Ctrip's revenue was 5.4 billion yuan, up 30% over 2012; its net profit was 998 million yuan, up 40% from 2012.

In April 2014 with more than 200 million U.S. dollars in strategic investment in the same network, Ctrip began to vigorously enter the field of tickets, the United Nations 1,000 scenic spots in the country to launch an unlimited number of "one yuan tickets" activities, and jointly launched Tencent mobile phone APP booking "WeChat payment And then return one dollar "discount. According to Ctrip's plan, "one dollar tickets" is expected to cover hundreds of millions of consumers nationwide within a year, for the tens of millions of tourists directly provide scenic tourist services.

Ctrip hopes to 'one yuan tickets' subversion people's concept of price, so that more tourists recognize the convenience and benefits of mobile phone booking tickets, thus stimulating the travel will, the formation of the habit of weekend vacation travel in the country, , Mobility, in response to the national leisure plans put forward by the country. "Zhou Zhou Ctrip's terrestrial services division said.

Offline resources is the BAT giant Ctrip most fanatical advantages, regardless of Ctrip joined the BAT which camp, the other two are a serious blow.