Please ensure Javascript is enabled for purposes of website accessibility

China's Many Routes to Riches

By Rick Munarriz – Updated Apr 6, 2017 at 1:13PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Eastern giant's travel industry continues to soar.

Travel portal eLong (Nasdaq: LONG) -- a Beijing-based subsidiary of Expedia (Nasdaq: EXPE) -- posted healthy quarterly results yesterday. Revenue rose 30% to $15.7 million. Net income nearly tripled to $0.04 per ADS.

The growth isn't all organic, since eLong has been actively snapping up smaller Chinese travel sites lately. The growth spurt also pales in comparison to market leader Ctrip.com's (Nasdaq: CTRP) 46% top-line improvement during the same quarter. However, growth is starting to accelerate at eLong, which is certainly encouraging.

The market may have soured lately on many Chinese equities, but the travel sector continues to hold promise.

Home Inns & Hotels (Nasdaq: HMIN) posted a quarterly profit of $0.15 a share earlier this month, more than double what Mr. Market expected. It also managed to boost its RevPAR (revenue per available room -- a popular metric in gauging hoteliers), thanks to higher occupancy levels and higher overnight rates.

Rival budget lodging chain 7 Days Group Holdings (NYSE: SVN) also came through with a niche-affirming report this week, wringing out a small profit on a robust 26% revenue gain.

Even the otherwise sleepy IPO market delivered a hot Chinese travel play when China Lodging Group (Nasdaq: HTHT) went public two months ago at $12.25. Shares closed at $14.40 yesterday, 18% higher in a time when the market in general has been a bit dicey.

Risk-averse investors that normally don't tread into Chinese small caps may want to consider eLong's balance sheet. The portal is carrying $139.5 million -- or nearly $5.50 per ADS -- in cash and cash equivalents.

You'll find growth and value in many Chinese travel plays that trade on stateside exchanges. You simply need a healthy sense of exploration to find them. Isn't that what travel is all about?

Have you ever traveled to China? Share your experiences in the comment box below.

Ctrip.com International is a Motley Fool Hidden Gems selection. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy   

Longtime Fool contributor Rick Munarriz has been booking travel online since the 1990s but he does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Expedia, Inc. Stock Quote
Expedia, Inc.
EXPE
$91.26 (-0.80%) $0.74
Trip.com Group Limited Stock Quote
Trip.com Group Limited
TCOM
$25.99 (1.52%) $0.39

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
339%
 
S&P 500 Returns
109%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.