The price war causes the market expense to increase Ctrip three quarter net profit to fall 40%

"Financial Network (blog, micro-bo)" Freshfields Reporter

November 6, Ctrip (NASDAQ:CTRP) released today's 2012 Q3 earnings report, according to the results of the July price war, led to Ctrip three quarter http://www.aliyun.com/zixun/aggregation/8323. HTML "> Sales and market costs increased by 74%, although Ctrip 2012 third quarter operating income of 87 million U.S. dollars, an increase of 20%, but three quarter net profit of 31 million U.S. dollars, down 40%." Three-quarter Ctrip gross profit margin and the same period last year roughly flat, to 76%.

Earnings data show that price war led to a substantial increase in the cost of Ctrip, from the second quarter of 2011 to date, the year-on-year growth rate of Ctrip is 33%, 39%, 45%, 47%, 54%, 74%, gradually rising, significantly higher than net revenue growth.

There has been a big increase in operating costs, with sales and marketing costs rising 74% to 48 million dollars year-on-year, mainly because of increased marketing activity. In addition, the third quarter of 2012 product development costs of 39 million U.S. dollars, an increase of 51%, the chain growth of 17%. The main reason for growth is the increase in the cost of product developers.

July 2012, Ctrip announced a high-profile 500 million dollar promotional budget authorization, online tourism industry price war opened. Ctrip has launched a hotel, air tickets and holiday products discount or return, and shout out "monthly crazy reduction, every day low price" slogan, this is the first 12 years of Ctrip to carry out large-scale promotional.

The cost of the rise led to a contraction in profits, in the third quarter of 2012, the ownership of the net profit of Ctrip shareholders was 31 million U.S. dollars, down 40% year-on-year.

After the release of the post trading, the closing Ctrip Rose 7.73%, reported at 21.60 U.S. dollars. In the past 52 weeks, Ctrip's highest stock price was $36.06, with a minimum price of $12.36. Ctrip expects the fourth quarter of 2012 net operating income annual growth rate of about 15–20%.

(Stock market Weekly feeds)