Ctrip's multi-product line and one-stop service strategy is facing a great crisis

According to convention, good performance of listed companies are often the first to release earnings, especially in all walks of life leader. Ctrip has maintained this honor for many years. But until November 26, with Cheng disclosed 2014 Q3 earnings, fell in the art dragon, passers-by cattle, only than where the net early a week. In the day before the Thanksgiving release earnings, the extenuating please see below. #貌似携程以前没动过这种心思

With Cheng reported that the third quarter of this year net revenue of 2.13 billion yuan, an increase of 38%, net profit of 217 million yuan, the year-on-year decline of 42%. For Ctrip Hotel, traffic ticket booking volume growth, revenue and cost components, such as financial issues, Tiger Sniff has been analyzed. Unexpectedly, Ctrip in the conference call after the announcement of the more shocking information: four quarterly operating profit margin of 12% to minus 17%, the company will be listed in the first loss in 11 years, and the loss amount of up to 400 million to 500 million yuan. After the financial disclosure of the transaction (November 26), Ctrip's decline was close to 12%, closing down 8.48%.

UBS, JPMorgan Chase and Barclays have lowered their ctrip ratings to neutral and lowered their target prices, with more international investment banks expected to follow after Thanksgiving.

Ctrip's "Kong is not bad" has broken

According to earnings forecasts, Ctrip 2014 Q4 revenue will grow 30% to 1.87 billion year-on-year. But it is alarming that chief strategist Wu Wenjie in a subsequent conference call, expecting the operating loss of Ctrip in the four quarter: "The operating profit rate not calculated by US GAAP is 12% to 17%". That is to say four business losses are 220 million to 320 million yuan. After that, Ctrip's chief operating officer, Sun, gave more specific data-net loss 400 million to 500 million (net income for Q4 around technologists to technologists on GAAP)! Where to wear a loss "hat", the highest quarterly loss in history is 420 million (2014 Q2). The volume of Ctrip, if plunged into sustained losses, carrying cash will be consumed quickly.

Into the 2014 Ctrip, the profits all the way down, the first quarter net profit down 25%, two quarter year-on-year down 36%, three quarter year-on-year drop 42%, four quarterly deficit. Sun's losses are as follows: Market technology input, second-tier urban expansion, new business development (we ' re very aggressive in terms of our investment to the harsh Marvell, second tier City penetration and new business.)

Capital market, but also radish greens tastes, if the art of the Dragon, where to go, the investors of the cattle to sacrifice profits to rob the market's strategy to hold the recognition attitude, Ctrip's investors are mostly "excellent blue chip enthusiasts." Ctrip from surplus to loss, to always regard it as a good performance of the blue chip investors have a great deal of confidence. The announcement of earnings before the Thanksgiving "little Holiday" is to give investors a "cushion period". The first loss since the IPO, but also a huge loss, in the three quarterly text did not give investors warning, only in the conference call a stroke, this really good?! Anyway, in a-shares, the performance of listed companies fell more than 50% no notice of warning, investors can jointly request the SFC to investigate!

Liang Jianzhang once said, "Play price war, others lose money, Ctrip the most money." Like in the battlefield, Ctrip can put opponents to death, and they will not bones, this is called "gold steel Not bad body."

The market is relentless, the business is brutal, Ctrip was eventually dragged into the loss of their opponents, but also a huge loss. Even if the 2015-year Q1 Ctrip can start to profit again, but the first quarterly loss in 11 years shows that Ctrip is the "giant" will bleed, will be injured, "King Kong is not bad" myth has finally been broken. It is said that with the release of Cheng, where to go CEO Zhungchengsu in the micro-letter on a meaningful seven words: "Three punches to death town Kansai"; Art Dragon CEO Cui in the circle of friends ridicule old opponents: "Ctrip used to laugh at the art of a quarter of the money, only enough to buy a room in Beijing, but now Ctrip will lose a building in a quarter! ”

"One-Stop" and "singles one" are not good or bad

For a long time, Ctrip rely on the "leading boss" industry status and strong financial strength has been "do addition", committed to creating "one-stop service." Not only hotel, air tickets to grasp, but also through equity participation, holding a number of companies involved in attractions tickets, catering, taxis and car rental and other fields; Where to go the net also imitate Ctrip, take the whole product line strategy; art Dragon Strategy is "do subtraction", gathered in hotel apartment booking, strive for a single point of breakthrough; although the hotel reservation But according to their own situation and competitive situation to the scenic spot tickets pre-sale. Because of the market position of Ctrip and Liang Jianzhang "magnificent" series of mergers and acquisitions, "one-stop service" by some of the industry and the media deified, that all-inclusive's multiple product line strategy has advantages, in the price war to maintain profitability. The loss of Ctrip broke the myth.

Breaking the myth, let's return to a simple market law: Profit and loss depends largely on cost and supply and demand, not on whether the product line is complete or not. In fact, many industries are similar to the "one-stop" and "single" mode of contention, such as department stores and stores, integrated electric and vertical electricity, universities and colleges, and so on. In fact, the two models themselves do not have good or bad points, need to see the competitive situation and its own resources endowment specific analysis. #阿里很风光, the only thing will live well

Specific to Ctrip, its product line covering the hotel, air tickets, vacation, business travel, attractions tickets, catering, car rental, cruise tour and other fields, when all areas of competition are white-hot, Ctrip's multiple product line, one-stop service strategy facing a huge crisis: Art dragon, go where, the same process, The passers-by are willing to rob the market at all costs (the investment of Ctrip has not ceased the competition of the same course and the passers-by). Art Dragon Capital strength than Ctrip, but the account of 2 billion cash to hotel reservations This product line is very abundant, back to the strength of your larger, the price you lower me, the brutal "hand-to-hand combat" from the beginning of the year to the end of the season, "1 Yuan Ticket" is also the Four Seasons Non-stop, it is said that 2014 has burned 600 million , the way cattle in the field with the group and Ctrip die Knock, have the Godfather to where to choose "Village ignition, household smoke" strategy, and Ctrip war. So, this year's online tourism market, price war phone-in four: Hotel return cash, ticket platform war, attractions tickets 1 yuan ... For Ctrip, no field can be used as the "rear area", "base" for other battlefield transport guns and ammunition, provide logistics supplies. Ctrip in every battlefield with the courage to bright sword, fighting against opponents, each product line is fights, tough battle, consumption battle, full product line is not an advantage, but become a disadvantage.

Where to go net and Ctrip confrontation, by virtue of their own "undead"-Forget how much money, major shareholders are full support. Like the battlefield by the enemy cut short arms and legs, minutes and can grow new arms and new legs. In the first half of the 2014 loss of 600 million, some analysts predict that Q3 will lose another 600 million. The end of the second quarter of the book cash 1.3 billion, if the three or four quarter each lose 600 million, where to go only equity or debt financing.

Ctrip's "King Kong is not bad" has broken, where the "undead" is being severely devastated. Focus on hotels, attractions tickets of the Art dragon, the same way to master the initiative is relatively larger. It seems that the current China's online tourism, "singles one" than "one-stop" more chances.

How long can Ctrip be headstrong?

Because of good performance, large volume, financing channels unobstructed, Ctrip never know what is called lack of money. In particular, more than a year ago, Ctrip more and more foreign investment, continuous injection into the car, heavy investment in the same and the way cattle, share a hi car rental, buy Hua Yuan Travel, spend 3.6 billion of cruise, 3 billion buy a building. Throw hundreds of millions of, billions of, the eyes do not blink. However, by the end of the third quarter of 2014 years, the flow of ctrip assets after the responsibility, the net amount is only 5.94 billion, the flow rate is only 1.58 (health value should be greater than 2.0). Although far from the "financial face of tension" degree, but the big hand spending, the use of capital rich product line will slow down, or even pause. This is a bit like "small white-collar", the first half of the month's salary to account that they are tyrants, the next half a month to be a sheet of flowers.

Finally, I have to say that the random and the quality of Ctrip investment, using this month's popular language is "rich self-willed." The passers-by call upon the door, Ctrip to take out 50 million dollars, the same way announced with the Art Dragon strategic cooperation the same day, Wu Zhixiang received Ctrip message, 220 million dollar investment soon set down (see Tiger smell May 9); buy a hi. Renting a car and becoming a single major shareholder is debatable. Although Wu Zhixiang, Udunder accepted the investment of Ctrip, but unwilling to surrender to the Liang Jianzhang, will not let their company become a vassal of its people. The same way, the cattle in their respective main direction is not on Ctrip weakness. As for a hi car rental, see Tiger Sniff wen "a hi car rental, facing three difficulties."

In October 2013, the Beijing Securities and Control Bureau issued a decision on the administrative supervision measures to Xiang-e situation, condemning the chairman Mengkai "the excessive personal authority", which affected the "three meetings" (Board of Directors, supervisory board and Shareholders ' meeting) to play a role in condemning. Ctrip management team shares far below 10%, they are not owners but agents, shareholders of their authorization is too large?

If the main business of burning money, operating from surplus to loss is a natural disaster, is the result of fierce competition. If a few years later, Ctrip those who praise the series of mergers and acquisitions did not get the desired effect, it is man-made disasters, is subjective, reckless investment. Historically, companies that have expanded and died are much more dead than contracted.

Su Ning how deficient also surname Zhang, Ctrip already not surnamed Liang (Liang Jianzhang, Sun, fan together only hold 6.7% equity), once investors lose confidence in the team, the consequences can be imagined.