According to Sina Technology News on the morning of November 14, Beijing time,Ctrip(Nasdaq: TCOM) today released its unaudited financial results for the third quarter ended September 30, 2019. According to financial reports, Ctrip's net revenue for the third quarter was RMB 10.5 billion (US$1.5 billion), up 12% year on year, up 21% month on month; net profit attributable to the company's shareholders was RMB 793 million (approximately US$112 million). Compared with the net loss attributable to the company's shareholders in the same period last year was RMB 1.1 billion, and the net loss attributable to the company's shareholders in the previous quarter was RMB 403 million. (Tang style)
Summary of results for the third quarter of 2019:
Ctrip Group officially changed the English name of the group to “Trip.com Group Limited” on October 25, 2019, China time, and changed the stock code to “TCOM” on November 5, 2019. As a multi-brand matrix group, Ctrip Group operates major brands such as Trip.com, Ctrip, Sky Tour, and Where to Go.
Ctrip Group's financial results for the third quarter of 2019:
Operating profit for the third quarter of 2019 was RMB 2.2 billion (US$314 million), up 52% year over year. Excluding equity compensation expenses, operating profit for the third quarter of 2019 was 2.6 billion yuan (369 million US dollars), an increase of 40% over the previous year.
The operating margin for the third quarter of 2019 was 21%, compared to 16% in the same period in 2018 and 15% compared to the previous quarter. Excluding equity compensation expenses, the operating profit margin for the third quarter of 2019 was 25%, the highest value in the past 6 years.
Ctrip Group's international business (with the exception of destinations in Greater China) continues to grow strongly.
In the third quarter of 2019, the international hotel business (excluding destinations in Greater China) increased 50% year over year.
The international ticket business of the Trip.com brand has achieved three-digit ticket volume growth for 12 consecutive quarters.
Financial results and business development for the third quarter of 2019
In the third quarter of 2019, Ctrip Group's net revenue was RMB 10.5 billion (US$1.5 billion), an increase of 12% over the previous year. Net operating income increased 21% month-on-month in the third quarter of 2019.
Accommodation reservation revenue for the third quarter of 2019 was RMB 4.1 billion (US$576 million), up 14% year over year, mainly benefiting from the global expansion of its brand, global expansion of product coverage, and diversified accommodation options for potential customers. In the third quarter of 2019, accommodation reservation revenue increased 21% month-on-month, mainly due to seasonal factors.
Transportation ticketing revenue for the third quarter of 2019 was 3.7 billion yuan (US$521 million), an increase of 3% over the previous year, mainly due to increased demand in the international air ticket business and ground transportation business. Transportation ticketing revenue increased 9% month-on-month in the third quarter of 2019, mainly due to seasonal factors.
The revenue of the travel and vacation business in the third quarter of 2019 was 1.6 billion yuan (US$229 million), up 19% year over year, mainly due to strong growth in offline store traffic and further penetration in low-tier cities in China. In the third quarter of 2019, the revenue of the travel and vacation business increased 56% month-on-month, mainly due to seasonal factors.
The revenue of the business travel management business in the third quarter of 2019 was 335 million yuan (47 million US dollars), an increase of 26% over the previous year. The increase mainly benefited from the increase in business travel customers and the optimization of the product structure. In the third quarter of 2019, the business revenue of the business travel management business increased 9% month-on-month, mainly due to seasonal factors.
The gross margin for the third quarter of 2019 was 79%, the same as the same period in 2018 and the previous quarter.
Product development expenses for the third quarter of 2019 were RMB 2.8 billion (US$390 million), up 12% year over year. Product development expenses increased 6% month-on-month in the third quarter of 2019, mainly due to an increase in expenses related to product developers. Product development expenses accounted for 27% of net revenue in the third quarter of 2019. Excluding equity compensation expenses, product development expenses in the third quarter of 2019 accounted for 25% of net operating income, up from 24% in the same period in 2018, and down from 28% in the previous quarter.
Sales and marketing expenses for the third quarter of 2019 were 2.5 billion yuan (US$347 million), a year-on-year decrease of 8%, mainly due to a reduction in related sales and marketing activity expenses. Sales and marketing expenses increased 18% month-on-month in the third quarter of 2019, mainly due to an increase in related sales and marketing activity expenses. Sales and marketing expenses in the third quarter of 2019 accounted for 24% of net revenue. Excluding equity compensation expenses, sales and marketing expenses accounted for 23% of net revenue in the third quarter of 2019, down from 29% in the same period in 2018 and 24% in the previous quarter.
Management expenses for the third quarter of 2019 were 809 million yuan (US$113 million), an increase of 18% over the previous year, mainly due to increased manager-related expenses. Management expenses for the third quarter of 2019 were the same as in the previous quarter. Management expenses for the third quarter of 2019 represented 8% of net operating income. Excluding equity compensation expenses, management expenses for the third quarter of 2019 accounted for 6% of net operating income, the same as the same period in 2018, and a decrease compared to 8% in the previous quarter.
Operating profit for the third quarter of 2019 was RMB 2.2 billion (US$314 million). Compared with operating profit of RMB 1.5 billion for the same period in 2018, compared with operating profit of RMB 1.3 billion for the previous quarter. Operating profit increased 52% year over year in the third quarter of 2019. Excluding equity compensation expenses, operating profit for the third quarter of 2019 was 2.6 billion yuan (369 million US dollars). Compared with operating profit of 1.9 billion yuan for the same period in 2018, compared with operating profit of 1.9 billion yuan, compared with operating profit of 1.7 billion yuan in the previous quarter. Excluding equity compensation expenses, operating profit for the third quarter of 2019 increased 40% year over year.
The operating margin for the third quarter of 2019 was 21%, compared to 16% in the same period in 2018 and 15% compared to the previous quarter. Excluding equity compensation expenses, the operating margin for the third quarter of 2019 was 25%, compared to 20% for the same period in 2018 and the previous quarter.
Income tax expenses for the third quarter of 2019 were 365 million yuan (51 million US dollars). Compared with income tax expenses of 257 million yuan for the same period in 2018, compared with income tax expenses of 336 million yuan for the previous quarter. Changes in the Group's effective income tax rate are mainly due to changes in the contribution ratio of branches applying preferential tax rates, including losses due to changes in the fair value of sellable financial assets of some types of equity that cannot be deducted before tax.
Net profit attributable to Ctrip Group shareholders in the third quarter of 2019 was 793 million yuan (112 million US dollars), compared with a net loss of 1.1 billion yuan for the same period in 2018, compared with a net loss of 403 million yuan in the previous quarter. Excluding equity compensation expenses and fair value changes in equity financial assets, net profit attributable to Ctrip Group shareholders in the third quarter of 2019 was 2.3 billion yuan (US$317 million), compared to 1.7 billion yuan in the same period in 2018, and 1.3 billion yuan compared to the previous quarter.
The profit per diluted depositary certificate for the third quarter of 2019 was RMB 1.35 ($0.19). Excluding equity compensation expenses and profit and loss from changes in fair value of equity financial assets that can be sold, the profit per diluted depositary certificate for the third quarter of 2019 was 3.7 yuan (0.52 US dollars).
As of September 30, 2019, the balance of cash, short-term investments, and time deposits and wealth management products held until maturity was RMB 61 billion (US$8.5 billion).
Performance outlook
Ctrip Group expects net revenue to grow at a year-on-year rate of about 8%-13% in the fourth quarter of 2019. The forecast reflects Ctrip's initial judgment based on the current situation and is subject to adjustments.