It's OK to call out Ctrip.com (Nasdaq: CTRP). Nothing's going to shake it from its low-balling ways.
China's leading travel portal is once again chasing a blowout quarter with uninspiring guidance.
Revenue in its latest quarter soared 30% to $116.8 million. The acquisitions of Wing on Travel and ezTravel helped juice up its packaged-tour sales, but even Ctrip's flagship hotel booking and air ticketing businesses came through with organic 23% spurts apiece. Net income climbed 23% to $0.24 a share. Wall Street was banking on a profit of $0.22 a share on $111.5 million in revenue.
Don't blame analysts. Ctrip likes to keep the pros pessimistic and dumb.
Three months ago, Ctrip was targeting "approximately 20%" growth in revenue for the first quarter. We now know that the portal came through with a 30% top-line surge.
Hop into a time-traveling DeLorean and you'll see the same game play out every three months.
Six months ago, Ctrip's eventual 39% year-over-year pop in revenue was guided toward a more modest 30% to 35% pop. The quarter before that found Ctrip pegging its third-quarter revenue to grow between 35% and 40%. Reality delivered a 49% burst.
Growth is decelerating at Ctrip, and that much is obvious. However, any investor with a sense of history isn't going to take the company at its word. Unfortunately, there aren't too many historians in the market these days.
Last night's outlook for the current quarter calls for revenue to grow by 15% to 20%. Don't believe it. Ctrip's immortal until proven honest.
These aren't the best of times for China's travel industry.
Chinese hoteliers Home Inns (Nasdaq: HMIN), China Lodging (Nasdaq: HTHT), and 7 Days (NYSE: SVN) all posted lower than expected earnings last week. That's what slackers do.
Ctrip is no slacker. It just redraws itself that way every three months.
Ctrip remains the best way to play China's travel industry. A popular Internet portal will sport ridiculous margins that hospitality providers will never be able to match.
Investors can aim lower by going for smaller travel portal eLong (Nasdaq: LONG), but it's not necessarily a relative speedster. eLong also posted quarterly results last night, mustering a mere 23% top-line advance.
Country hoppers can always warm up to India's MakeMyTrip (Nasdaq: MMYT). The largest portal in the world's second most populous nation posted healthier growth than Ctrip last week, but if you think Ctrip's expensive you'll gag at MakeMyTrip's lofty valuation.
Stick with Ctrip. Profit from the dot-com darling when it plays possum every three months, and save the DeLorean for the real joy rides through time.
Do you own any Chinese travel-related stocks? Share your thoughts in the comment box below.
