Ctrip.com International Ltd.
were soaring through the roof last year, gaining 104%,
according to data from
S&P Capital IQ
. The Chinese online travel agent rode a strong growth trend
and delivered its own earnings beats to more than double over
The travel booking service first popped on March 20, gaining
25% as the company blew past revenue estimates and wowed on
first-quarter guidance. Revenue increased 30% in the fourth
quarter, but the company projected sales increases of 40%-50%
in the coming period. Ctrip posted a loss in the quarter, but
it was narrower than expected.
Ctrip gained again after its first-quarter earnings report,
and then surged after buying a portion of
$671 million stake in
. By taking a stake in the rival travel service in what's
considered the world's fastest-growing economy, Ctrip
consolidated its own power over the market.
Just a few days later, the company got more good news as
the global leader in online travel, announced it would increase
its stake in Ctrip by $250 million. The move acts a vote of
confidence from Priceline and a sign of the potential market
growth in China. Ctrip shares stumbled in early June after its
attempt to buy rival Qunar was rebuffed. Terms of the proposal
were not disclosed. The stock swooned over June and July as it
sold $1.1 billion in debt, but bounced back on its
second-quarter earnings report.
The stock jumped 10% in one day as it beat earnings, raised
guidance, and said it had received an offer for its eLong
Ctrip shares popped more than 20% in one October session
when it announced a share swap worth $3.4 billion with rival
Qunar Cayman Islands Ltd.
, taking 45% in the overseas travel specialist in China.
Finally, shares soared on its third-quarter earnings report
in a quarter that included 49% revenue growth.
Ctrip seems to be following a familiar consolidation strategy
out of the playbooks of Priceline.com and Expedia. The strategy
has worked for those two companies, and investors clearly seem
to think it will deliver in China as well. To start 2016, Ctrip
made a similar investment in
, indicating it plans to continue the strategy. Profits are
starting to mount, and strong revenue growth is expected to
continue. The Chinese travel market should continue to pay
rewards for Ctrip.
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Why Shares of Ctrip.com International Ltd.
Exploded in 2015
originally appeared on Fool.com.
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recommends Ctrip.com International. Try any of our Foolish
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