eLong, Inc. (ADR) (NASDAQ:LONG)
The Company is an online travel service provider in China. It utilizes a centralized modern call center and web-based distribution technologies to provide our services.
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We have a myriad of choices in the US for online travel booking and the same is true in China. CTRP is the cash cow that everyone is currently touting but that doesn't mean #2 LONG should be forgotten.
I prefer to buy low and sell high and I think LONG is a company that's capable of meeting my expectations. However, I'm a bit short on the timeframe that I originally listed. I plan on selling LONG one to two months before the '08 Olympics.
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LONG: EV/revenue = 2.2
CTRP: EV/revenue = 16.
LONG is very cheap for a business that is growing 20% top line in a vast grows potential in China. China's travel market is large enough for more than one players. LONG will do well long term.
I will buy long thousand times over!!! I will bet $10000 that LONG (stock) will outperform CTRP in next five years.
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With a market size so huge, China's growing middle class will definitely want to splurge on luxury goods like travelling.
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Benefit from the olympics game.
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eLong is an online travel service provider in China, offering hotel bookings, air tickets, car rentals, vacation packages and corporate travel services to frequent independent travelers, engaged in business and leisure travel. Apart from commission earned on travel related services, online advertising also contributes to its revenues.
As a part of the e-ticketing transition, China Air Transport Association and the International Air Transport Association (IATA) have stopped selling paper tickets in China from October 2006. This is encouraging for the industry, since it provides a cost benefits to travelers as well as overall travel industry in terms of less manpower used, paper cost and commissions. Thus, customers are going to switch from traditional travel agencies to online bookings, which translate into a huge opportunity for companies like eLong, which issues e-tickets.
The hotel booking business continues to show strength with 38% revenue growth for third quarter of 2006, which was led by higher bookings in room nights. eLong, partnering with Expedia, which owns 52% in eLong, has launched a hotel virtual tour in May 2006, to expand its Chinese and International hotel offering. This platform will enable its customers to have a better view of the hotels on website and provide them with extra facilities. This sourcing partnership allows eLong to harness Expedia’s scale and global market presence to Chinese consumers at competitive rates.
Outbound tourism is the fastest growing market in the China’s $ 100 billion travel market. This segment is bound to grow as it moves online, driven by broadband adoption and e-ticketing. With a strong backing of Expedia, long-term investors should free to have exposure to this stock.
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Travel companies in China cannot help from benefit from the upcoming Olympics. They are growing revenues rapidly with key partnerships and a network of over 3000 hotels. Add to that the fact that they have 1/3 of their market cap in cash with minimal debt, and I see great potential in the coming years for this company to really be a cash cow.
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5-star $373 million market cap on 11/11/06
Chinese online travel agency.
5STARsmallCAPS picks five star stocks with the smallest market caps.
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Pure play travel in China, all those people just itching to travel and see the world, globalization will only increase discretionary spending in China, and Travel is in the top 5 things that folks will want to do when they have spare cash
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These guys are the google of China. You said it yourself
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While everyone looks at Ctrip as the big dog in the travel market in China, I believe that the market is going to be big enough for a couple major players and therefore think eLong will be a very handsome growth stock.
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