How Can Ctrip’s Expansion In Geographies Like The U.S. Impact Its Share Price?

CTRP: Ctrip logo
CTRP
Ctrip

Chinese OTA giant, Ctrip’s CEO, James Liang, might be hinting at a possible entry into the U.S. in the future. Speaking of the U.S. Liang mentioned that the U.S. economy is the “most dynamic” and it will be an “interesting” option for a company like Ctrip.

Ctrip is currently the second largest OTA in the world in terms of market capitalization. Last year, Ctrip had taken a few important steps to consolidate its market share in China, such as buying a 40% stake in its erstwhile competitor eLong, and buying a 45% stake in another big rival, Qunar. As a result, Ctrip’s market capitalization now stands at $21 billion compared to Priceline’s ~$70 billion and Expedia’s $17 billion. Currently Ctrip’s hotel revenue is growing at a CAGR of 56% over the two-year period ending 2016, while its overall revenue is growing at a CAGR of 46%.

Though Ctrip has partnerships with the global OTA leaders, Priceline and Expedia, the Chinese OTA itself focused on the domestic market for so long. Liang’s statement might suggest that Ctrip wants to start expanding its business focus soon and the U.S. might be one of the most plausible markets for it to do so.

We currently expect Ctrip’s global market share in hotel bookings to reach from around 4% in 2016, to around 8% by the end of our review period.

ctrip international hotel

However, if Ctrip’s market share crosses 10% by the end of our review period as a result of Ctrip’s aggressive growth in international markets such as the U.S., then there can be over 20% upside to our price estimate for Ctrip.

Have more questions about Ctrip? See the links below.

Relevant Articles
  1. Will Johnson & Johnson Stock Rebound To Its Pre-Inflation Shock Highs of $185?
  2. Should You Pick Eli Lilly Stock After A 4x Rise In Three Years?
  3. Down 9% This Year, What’s Next For Lululemon’s Stock Past Q4 Results?
  4. Down 14% In The Last Trading Session, Where Is Adobe Stock Headed?
  5. Will Higher Federal Government Spending, Gen AI Drive Digital Security Stocks Like CrowdStrike Higher?
  6. Up 30% In A Year Is FedEx Stock A Better Pick Over UPS?

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Ctrip

See More at Trefis | View Interactive Institutional Research (Powered by Trefis)

Get Trefis Technology