Ctrip.com International, Ltd. (ADR) (CTRP)

ok... I'm ranked in the top 12,000 or so... so my pitch likely carries no weight with anybody. I suppose it shouldn't. I barely listen to myself. That's cool. But since I did sell my real CTRP position today, I thought I'd commemorate it here. CTRP trades at 22X sales. EXPE trades at ~3X sales. Considering CTRP is growing 3X faster, let's go ahead and allow it a 3X larger P/S ratio. Even assuming 30% growth for the next 5 years (and similar growth well beyond that to justify the higher multiple), share price appreciation of only ~8% per year would get it back down towards the P/S of 9 we'd be looking for. Add to that that I don't buy the China "look how many people they have" hype, and I'm out. Yes they have a lot of people. The vast majority can't afford a mcdonalds hamburger, let alone an airline ticket or hotel. This is changing, but China doesn't have an affluent middle class like the US. They have some wealthy and a lot of very, very poor. GDP growth of 9% isn't going to get the dirt poor into the airports anytime soon.

The risk in Ctrip.com is that it is in China. In the 1980's, it was guessed that it would take 20 years to build the infra-structure of China. They started with their ports, have to get stuff in and out of the country. In the mid 1980's, a delegation from the company I worked for, did a tour of the Pacific Rim. The people had nothing. In an apartment building at night, you could see the blue color from a TV in every apartment. We can?t understand the numbers in this country. The government does study and decides to privatize some function. The removed 55 million people from government payrolls. That is 1/3 of the USA workforce! It is a ho-hum in China. As the middle class grows, it will travel. Boeing is going to love it unless they start building commercial aircraft! If this company can keep its competitive advantage and margins, we will all get rich on this company.

Again, lots of ignorance abound on the internet concerning this one. Most common posts: "Tibet!!!", "Olympic Boycott!!!" Guys, this company is a domestic travel service for Mainland China. It doesn't have partnerships overseas (yet). I've been to China and have used CTrip to book hotels, tickets and taxis. The service is incredibly efficient and professional. When the holidays come around in China, people overcrowd airports, rail and bus stations. CTrip brings some sense of order to the chaos. Even without the Olympics CTrip is guaranteed to keep growing, especially when its nearest competitor, majority Expedia-owned Elong, is a complete joke. If you don't believe me, just go check out Elong's website in comparison to Ctrip's. Ctrip has been seeking out foreign partners for the Olympics. I'm sure Western travel agencies will be more than happy to strike a deal with Ctrip. This would only solidify the incredible advantage that this company has in the Chinese travel industry.

Another Tom G. favorite. With my rating presently 3.23 as I write, and his about 30 times that, I figure I can't go too wrong on a stock that he called tonight "a 5-10 bagger over the next decade." Further words: "Just a very well run company with honest leaders and a major trend."

Serving China's expanding middle class with hotel, air, and travel package reservations has got to be a long-term growth industry. P/e of 38 is nasty, but yoy revenue growth of 47% eases the pain. With 3600 employees and an enterprise value around 1.5B it should be here for the long haul. No debt is a nice touch.

CTrip.com is a company recommended by Tom Gardner in the Hidden Gems service. I am very bullish about this company because of the growth prospects. I believe that Tom is right in saying that it will be a $10b+ company in 10 years, thus soundly beating the S&P 500 index. I have a small stake in this company and will buy more on weaknesss (which I believe is difficult to come by).

Can see this barreling along until the Beijing Olympics in 2008, then it will be time to reassess continued growth.

People have no idea what they are buying

Just sour grapes really. I didn't invest in Ctrip when Tom Gardner recommended it and I missed out on the big gains, but made a few small gains shorting it along the way. My main beef with Ctrip is that is has no sustainable competitive advantages. Any small slip up in the spectacular growth story and it will be consigned to the history books as a Chinese dot.bomb. Gross margins are declining and I don't trust management's reporting. Net margins of 40% are not sustainable for a travel agent and when the truth hits it will be a bolt from the blue. Enjoy the ride up, try to get off at the top!!

Ctrip.com provides travel related services in China, which mainly includes three, four and five star hotel reservations, air ticketing and packaged tours. The target audience who enjoy their services includes, frequent independent and business travelers. Ctrip has entered the Taiwanese market and intends to expand into Hong Kong and Macau through acquisitions.

Before Ctrip came along, traditional travel agencies dominated the Chinese travel market, as they catered mostly to group travelers and tourists. Ctrip.com has reaped the benefits of a rapidly changing Chinese travel landscape. Considering the strong development of Chinese economy, business travel has experienced strong growth.

Ctrip enjoys the advantage of an extensive nationwide network of hotel suppliers, over local agencies. To further strengthen its position in the hotel accommodation business, Ctrip has launched a new hotel reservation platform to include 25000 hotels. With this, Ctrip has established a substantial overseas hotel network spanning low, middle and high-end hotels. More customers are expected to search and reserve overseas hotel online as outbound travel demand in China increases.

The Chinese travel market is approximately $100 billion and online bookings account for almost 1% of it. This segment is bound to grow as it moves online, driven by broadband adoption and e-ticketing. China’s middle class people also spend more on travel, providing enormous growth opportunity for consolidator like Ctrip. Cherishing first- mover advantage, with strong client relationship and sound infrastructure, Ctrip is a good pick for long term investors in the rapidly growing Chinese online travel market.

Positioned perfectly to take advantage of the upcoming Beijing Olympics as well as the significant growth and modernization of China. Besides, "Hidden Gems" recommended it.

CTRP will continue to out pace the market. In particular, the run up to the olympics ( 1.5 Years from now) will bode well. Plus, with the after-olympic awarness of China you can expect to see a "second boom" for the travel industry. CTRP also owns interest in hotels. Not just a booking company.

Living in Shanghai, i see the kind of growth they're experiencing. Both in the english speaking market and local chinese-speaking market. They are setting a high bar for service in the travel industry.

I like the opportunity of a growing middle class in the most populous country in the world that will have more disposable income to spend on travel coupled with a leader in the internet travel business in that same country.

If you've lived and traveled in China as I have, you've seen young people handing out leaflets and info on C-trip at every airport - increased travel, increase computer usage, and ease of use will drive continued expansion of CTRP's business and stock price at rates unseen in this country

Still virgin market + Olympics in China. Need one say more?

CTrip is a great play on the large population in China and the increase in disposable income that is being used for travel purposes. With the Olympics comping to China in 2008, additional people will be traveling.

CTrip has signed up many airlines and hotels and have the experience and infrastructure to handle the growth. The management seems to be shareholder friendly and earning growth is good.

CTrip is a great long term hold.

I saw this on the Chinese Olympic website.

More than 300,000 people across the Chinese mainland will soon be apprised that they have managed to book tickets for the Beijing 2008 Olympic Games. According to Curt Logan, Gehua Ticketmaster Beijing Office General Manager, the Beijing Olympic ticketing center received 700,000 applications for tickets during Phase I of ticket sales, from April 15-June 30, 2007.

Thats just the beginning Phase 1, add in all the people traveling from other countries needing hotel and travel accomodations and CTRIP.COM is going to be VERY busy! 2008 should be a very profitable year for travel industry in China. Time to back the truck up and load up on ctrp shares !

Solid growth story through at least 2009. Absent political interference or unknown chicanery, fundamentals look powerful.