SECOND-QUARTER earnings jumped 44 percent for China's dominant online travel agency Ctrip.com, boosted by strong sales growth as the Website diversified services and extended geographical coverage, the Shanghai-based company reported yesterday.
Net income for the quarter totaled 88 million yuan (US$12 million), with diluted earnings per share of 17 US cents. Sales grew 52 percent year on year to 288 million yuan.
The company's profit was 19 percent above a Morgan Stanley projection, while sales exceeded the forecast by 10 percent.
"We continued to enrich our service offerings, expand our coverage geographically and focus on delivering superior customer experience," said Fan Min, chief executive officer of Ctrip.com International Ltd.
Among the new products were lengthy overseas trips for Beijing customers. The company also set up branches in 10 cities during the quarter to get closer to customers.
Ctrip's gross margin fell to 80 percent from 81 percent in the second quarter last year due to higher service costs, a result of increases in air ticketing and package tours.
The company sold 2.55 million air tickets in the quarter, which brought in 117 million yuan in booking revenue - a 67 percent increase year on year. Sales of package tours grew nearly 50 percent to 13 million yuan.
Also yesterday, Tokyo-based Rakuten Inc, Ctrip's biggest single shareholder, said it plans to sell all of its 13.29 million Ctrip American Depositary Receipts, or a 20.3 percent stake, and use the proceeds for investment, day-to-day business operations and loan repayments. Pricing for the sale will be decided on Friday.
Rakuten, Japan's largest online retailer, now works with its Shanghai-based partner on a Chinese language travel Website that focuses on Japan-China tours.
The Japanese company bought Ctrip shares in mid-2004 and has enjoyed a fourfold to fivefold return on investment, according to Morgan Stanley estimates.