Ctrip.com International (CTRP) Up on Acquisition Rumors
Shares of Shanghai, China, based Ctrip.com International LTD (CTRP) were up on Tuesday, rising $5.23 per share, or 10.41%, to close at $55.48 on volume of 6,590,410 shares. The company has been the subject of takeover rumors, by Qunar Cayman Islands (QUNR), which is a division of Baidu (BIDU), China's largest internet search firm.
Ctrip.com is a travel service provider for hotel accommodations, airline tickets and package tours in China. It is the largest travel service provider in China based on bookings, and is sometimes referred to as the "Priceline of China". It focuses primarily on non-group business and leisure travelers. In 2013, the company produced a net income of $162.56 million, on total revenue of $877.12 million. Ctrip.com's sales were up 32.9% for the year. The company's stock trades on the NASDAQ through American Depositary Shares (ADS
). Bloomberg news reported on Tuesday that Ctrip.com and web travel firm Qunar Cayman Islands have been in discussions that may include a possible merger between the two companies. The discussions are only in the preliminary stages, and include a variety of scenarios including partnership arrangements that will not involve a true merger. Ctrip.com and Qunar have a history of cooperation over the past several years, despite being competitors. It has been reported in the Chinese press that Qunar has been promoting tour packages offered by Ctrip.com, and that the two are interested in expanding that type of cooperation. The potential of a merger between the two travel giants has enormous potential. China's travel industry is expected to grow to $75 billion over the next three years, originating mostly from the country's more than 600 million internet users. Baidu, Qunar's parent, is the largest search engine in China, and stands to benefit from a merger between Ctrip.com and Qunar. A merger may also be in response to the arrival of Priceline in the Chinese travel market. Though based in North America, Priceline earns 85% of its revenue from overseas sources. It sees China as its biggest future market. A merger with Qunar would have Ctrip.com well positioned to deal with the competition Priceline will offer. TheStreet Quant Ratings has recently rated Ctrip.com as a buy,
citing robust revenue growth, solid stock performance, expanding profit margins, a solid financial position, reasonable debt levels, growth in earnings per share and a lack of significant weaknesses. Last week, Ctrip.com's board approved a new share repurchase program in which the company may purchase it's own American Depositary Shares of up to $600 million. The cash for the buyback will come from operations and from convertible bonds issued in 2012 and 2013. Other News About Ctrip.com International Travel Names That Could Take Flight
Ctrip.com is one on a very short list of travel companies. Ctrip confirms credit-card security flaw
A potential security flaw within Ctrip.com's storage of customer credit-card data. Other Stocks in the News Cramer: Alcoa has reinvented itself
Jim Cramer is convinced that Alcoa has reinvented itself. Is McDonald's Well Positioned for the Future?
Is MCD an OUTPERFORM, WAIT AND SEE, or STAY AWAY?
Published on Apr 9, 2014
By Kevin Mercadante