Scenes From a Chinese Airport

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If you thought priceline.com's (Nasdaq: PCLN) quarterly report was impressive on Monday, check out Chinese peer Ctrip.com (Nasdaq: CTRP).

China's leading travel search engine posted blowout financial results last night. Net revenues rose by 47% to $79.9 million, and net profits soared by 80% to $0.39 a share. Wall Street was -- literally and figuratively -- at the other end of the world. Analysts figured that Ctrip would deliver a profit of just $0.32 a share on $72.2 million in net revenue.

There was strength across the board at Ctrip. Hotel, airfare, and packaged tours posted revenue gains of 41%, 45%, and 93%, respectively. The travel-site operator is targeting top-line growth to decelerate to a mere 25% to 30% advance during the current quarter, but nobody seems to be complaining. The stock opened nicely higher this morning.

Ctrip is a thinking investor's play on China's booming economy. If discretionary income grows, so will the appetite for leisure travel, and the necessity for corporate travel. Ctrip is the top dog here. Smaller rival eLong (Nasdaq: LONG) has historically underperformed relative to Ctrip.

There are plenty of other publicly traded plays beyond the travel portals.

• Home Inns & Hotels (Nasdaq: HMIN) is a rapidly growing chain of value-priced lodgings.
• China Eastern (NYSE: CEA) and China Southern (NYSE: ZNH) are airlines.
• AirMedia Group (Nasdaq: AMCN) operates an advertising network in the major Chinese airports.

The problem with the stock plays beyond Ctrip is that China Eastern, China Southern, and AirMedia are all projected to post a loss this year. eLong is marginally profitable. Home Inns is squarely profitable, yet it joins Ctrip in the camp of Chinese stocks with healthy growth prospects but lofty earnings-based valuations.

What's an investor to do? Well, it's hard to ignore growth. It also bears pointing out that Ctrip has now trounced Wall Street profit expectations in each of the past four quarters. If analysts are lowballing future targets, too, Ctrip may be trading for a lower forward multiple than analysts think.

Yes, this is yet another reason to go with growth in China.