Remember travel agents? Though they still exist in certain pockets of society, they've largely gone the way of the dodo bird. In their place have come cheaper, more convenient, and empowering choices like (NASDAQ:BKNG) and Expedia (NASDAQ:EXPE).

But in the vast Middle Kingdom of China, everyday citizens are just starting to wake up to the possibilities of e-platforms for travel. That's why, back in 2005, our Hidden Gems advisers recommended buying shares of (NASDAQ:TCOM)-- China's leading online travel portal.

The Great Wall is a popular travel destination for Chinese residents, too. 

With earnings set to come out after the market closes on Tuesday, here are three things that shareholders should keep their eyes on.

First, the basics
We aren't huge fans of obsessing over any three-month time frame in a company's history. We're long-term investors, after all, and that means buying shares with a minimum three-year time horizon.

That being said, it's always good to keep tabs on how a company is performing, and to be aware of what Wall Street is expecting. At the very least, it helps us to understand why shares of our favorite companies might make huge moves after releasing results.

For the upcoming quarter, here's what Mr. Market expects to see.

Expected EPS

Expected Rev.

Expected Q4 EPS Guidance


$336 Million

$315 Million

Source: E*Trade

If the company can meet the targets for this quarter, it would represent a 33% rise in revenue, but a 50% drop in profitability. That hasn't concerned investors too much, as the company is aggressively building out its infrastructure to include a mobile app that can be a one-stop shop for all things travel in China.

And while specific revenue numbers for the fourth quarter won't be included in the outlook, a range of percentage increase will be. For Ctrip to match the Q4 expectations, it would need 32% growth in revenue.

The big contributors, and the small, but important, start-ups
When it comes to individual segments of Ctrip's business, there are three larger, and two smaller players to keep an eye on.


That's meant that while the volume of bookings for airfare and hotels has increased at a clip well over 40%, revenues haven't kept pace. While that's not fun for us investors to see, the increase in volume is indicative of larger market share, which is the only way to really win this game in the long run.

Over the past year, hotel and travel accommodations have accounted for just over 40% of revenue each, while packaged tours have accounted for 16%. For a quick refresher, here's what recent trends have looked like.

Bookings Volume Growth by Quarter | Create Infographics

While hotel bookings are understandably slowing down a bit, travel bookings have absolutely taken off in the last two quarters. Much of this has to do with the two aforementioned smaller players: bus and train travel. These represent huge markets with much lower margins that Ctrip is going after.

Not only can they bring in incremental revenue bumps, but further solidify Ctrip in a Chinese citizens mind space when it comes to online travel.

Investors should hope for, at the very least, a 50% bump in accommodation volume and a 75% bump in travel.

The game-changing app
It may seem odd to think of an app as a game-changer, but it is the crucial linchpin in helping turn Ctrip into the one-stop travel shop it hopes to be for Chinese consumers. Unlike many American and European computer users, Chinese citizens have entered the Internet through mobile devices -- meaning that apps have even more utility there than they have here.

If you can quickly, easily, and cheaply book your train, bus, plane, and hotel reservations via an app, that's arguably pretty convenient. As of last quarter, 200 million users had downloaded the Ctrip app, a 60% increase from the same time last year. If the company truly is gaining market share via the app, look for this number to show another healthy increase of over 50% from the same quarter last year.