Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Equity Bottom-Up

After a review of Q1 results, we retain our negative view of Ctrip's medium-term fundamentals.Ctrip's IR team did not respond to multiple requests for more information on +318 mn rmb in 'other income' (non-operating) on Q1's income statement, nor did management address the item in their conference call Wednesday evening. None of the banks' analysts who had a chance to ask questions during the call brought the item up, either. And as far as we can tell, management did not previously flag an item…

After a review of Q1 results, we retain our negative view of Ctrip's medium-term fundamentals.Ctrip's IR team did not respond to multiple requests for more information on +318 mn rmb in 'other income' (non-operating) on Q1's income statement, nor did management address the item in their conference call Wednesday evening. None of the banks' analysts who had a chance to ask questions during the call brought the item up, either. And as far as we can tell, management did not previously flag an item…

More Thoughts on Ctrip.com Q1; Remain Short

Ctrip's Q1 results are the first to fully consolidate results from Qunar (QUNR), which also reported today after the close in New York. Ctrip's Q1 Net Revenues appear in-line with expectations, and after adjusting for non-cash items, it still appears Income from Operations was essentially zero (but in-line with lowered expectations).The Net result (loss of 3.49 rmb per ADS) was slightly better than consensus (-3.62 rmb per ADS) but includes 318 mn rmb in 'other', non-operating income; without…

Ctrip's Q1 results are the first to fully consolidate results from Qunar (QUNR), which also reported today after the close in New York. Ctrip's Q1 Net Revenues appear in-line with expectations, and after adjusting for non-cash items, it still appears Income from Operations was essentially zero (but in-line with lowered expectations).The Net result (loss of 3.49 rmb per ADS) was slightly better than consensus (-3.62 rmb per ADS) but includes 318 mn rmb in 'other', non-operating income; without…

Founder, Riedel Research

David Riedel

Founder

Independent equity research on GEM Markets

Riedel Research

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Thematic (Sector/Industry)

Following a ‘risk-on’ rally early in the early part of last week global stocks dropped going into Friday on concerns that a series of key events later this month may stress the global economy and financial markets.At the center of these concerns is the uncertainty surrounding the potential for the UK to exit the European Union (Brexit). On June 23rd voters will decide whether Britain will leave or remain in the European Union. Concerns over a possible Brexit surged on Friday following the release of a poll from the Independent showing increasing support for a Brexit, with 55% vote to ‘leave’ against a 45% vote to ‘remain’.Further fueling uncertainty is the US Feds upcoming FOMC meeting set to take place on June 15th. While the Fed is not expected to hike rates in June (the implied probability of a June rate hike is currently just 2%) , investors are very concerned that a surprise hike could trigger volatility across global financial markets.Our proprietary indicators continue to indicate the global economy is strong enough to withstand a potential shock stemming from a surprise rate hike in the US or a Brexit.

Following a ‘risk-on’ rally early in the early part of last week global stocks dropped going into Friday on concerns that a series of key events later this month may stress the global economy and financial markets.At the center of these concerns is the uncertainty surrounding the potential for the UK to exit the European Union (Brexit). On June 23rd voters will decide whether Britain will leave or remain in the European Union. Concerns over a possible Brexit surged on Friday following the release of a poll from the Independent showing increasing support for a Brexit, with 55% vote to ‘leave’ against a 45% vote to ‘remain’.Further fueling uncertainty is the US Feds upcoming FOMC meeting set to take place on June 15th. While the Fed is not expected to hike rates in June (the implied probability of a June rate hike is currently just 2%) , investors are very concerned that a surprise hike could trigger volatility across global financial markets.Our proprietary indicators continue to indicate the global economy is strong enough to withstand a potential shock stemming from a surprise rate hike in the US or a Brexit.

Anxiety Over Brexit Surges While Key Economic Data Continue to Improve

CSI Deteriorates in May On Policy Uncertainty <ul>
<li>In May the MNI China Consumer Sentiment Indicator (CSI) dropped to a level of 114.2, below the key threshold of 116 separating rationally pessimistic consumers from panicking consumers. </li>
<li>
Deterioration in the CSI during May stems from growing uncertainty over the future path of China’s monetary policy. As the urgent need for deleveraging has become apparent a mysterious article published by an anonymous 'authoritative figure' in the People's Daily…</li>
</ul>

CSI Deteriorates in May On Policy Uncertainty 
In May the MNI China Consumer Sentiment Indicator (CSI) dropped to a level of 114.2, below the key threshold of 116 separating rationally pessimistic consumers from panicking consumers. 

Deterioration in the CSI during May stems from growing uncertainty over the future path of China’s monetary policy. As the urgent need for deleveraging has become apparent a mysterious article published by an anonymous 'authoritative figure' in the People's Daily…


China Consumer Sentiment Snapshot - Urgent Need for Deleveraging Becomes Apparent

Over the last several years, strong travel demand from China’s urban middle class and the rapid adoption of mobile broadband have led to impressive revenue growth for China’s online travel agencies (OTAs) and other Internet-based travel intermediaries.This growth has in turn attracted a disproportionate share of the capital flowing into China’s travel and tourism segment, and the listed OTAs have handily outperformed actual providers of travel services, such as airlines and hotels.However, the growth of OTAs in China is set to slow due to intensifying competition and rising marketing costs.With jet fuel costs moderating, and aggressive efforts underway to squeeze travel intermediaries, Chinese airlines are now better proxies for Chinese travel demand. BUY <a href="https://www.smartkarma.com/entities/8239" target="_blank" data-smartkarma-citation="entities:8239">Air China Ltd H</a> , SHORT <a href="https://www.smartkarma.com/entities/180" target="_blank" data-smartkarma-citation="entities:180">Ctrip.Com International Adr</a> .

Over the last several years, strong travel demand from China’s urban middle class and the rapid adoption of mobile broadband have led to impressive revenue growth for China’s online travel agencies (OTAs) and other Internet-based travel intermediaries.This growth has in turn attracted a disproportionate share of the capital flowing into China’s travel and tourism segment, and the listed OTAs have handily outperformed actual providers of travel services, such as airlines and hotels.However, the growth of OTAs in China is set to slow due to intensifying competition and rising marketing costs.With jet fuel costs moderating, and aggressive efforts underway to squeeze travel intermediaries, Chinese airlines are now better proxies for Chinese travel demand. BUY Air China Ltd H , SHORT Ctrip.Com International Adr .

Ctrip.com Vulnerable as Travel Service Providers Increasingly Go Direct

China

Qunar Cayman Islands Limited operates a search-based commerce platform. The Company provides travel product information from thousands of travel services providers in one location. Qunar Cayman Islands offers its services in China.

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Qunar Cayman Islands (QUNR US)

More Thoughts on Ctrip.com Q1; Remain Short

After a review of Q1 results, we retain our negative view of Ctrip's medium-term fundamentals.Ctrip's IR team did not respond to multiple requests...

Daniel Hellberg

Update on Ctrip.com Post Q1 Results

Ctrip's Q1 results are the first to fully consolidate results from Qunar (QUNR), which also reported today after the close in New York. Ctrip's Q1...

Daniel Hellberg

Anxiety Over Brexit Surges While Key Economic Data Continue to Improve

Following a ‘risk-on’ rally early in the early part of last week global stocks dropped going into Friday on concerns that a series of key events...

David Riedel

China Consumer Sentiment Snapshot - Urgent Need for Deleveraging Becomes Apparent

CSI Deteriorates in May On Policy Uncertainty In May the MNI China Consumer Sentiment Indicator (CSI) dropped to a level of 114.2, below the key...

David Riedel

Ctrip.com Vulnerable as Travel Service Providers Increasingly Go Direct

Over the last several years, strong travel demand from China’s urban middle class and the rapid adoption of mobile broadband have led to impressive...

Daniel Hellberg

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