Even before last week's blowout quarterly report, the Ctrip
A booming economy creates a potent pair of forces in the hospitality industry. With more disposable income, citizens can now afford to see more of the country and stay at better hotels. Then you have the impact from the outside as businesses fly in to cultivate lucrative working relationships. Even your garden variety Mickey Mouse-hugging tourist can now embrace the region after last year's grand opening of Disney's
How good was Ctrip's June quarter? Pretty darn good. Net revenues climbed 47% higher to hit the U.S. equivalent of $24 million for the period. Margins buckled as a result of stronger growth in the airline ticketing business that works off lower commission percentages than lodging bookings. Still, earnings per share rose 30% higher, to $0.28 a share before stock-based compensation charges.
The company did not provide profit guidance for the current quarter, but did indicate that net revenues should climb roughly 40% higher. Priced at 47 times this year's profit projections, Ctrip isn't exactly cheap, but that kind of premium is often warranted for a fast grower.
Naturally this is just one of the many ways to play China's growth. Last week, I explored the potential of employment classifieds specialist 51job
Our stock newsletters have approached China from many different angles. Ctrip has been recommended in the Hidden Gems newsletter service. SINA
There are opportunities there as the country continues to come into its own. Want to check it out firsthand? Well, you better get to know Ctrip.com a little better then.
Disney is a Stock Advisor recommendation.
Longtime Fool contributor Rick Munarriz has been a fan of China's high-margin stocks for a long time. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. Rick does not own shares in any of the companies in this story. T he Fool has a disclosure policy.
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