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Ctrip.com International Ltd., China’s biggest travel-booking website, fell to a three-month low in New York as Alibaba Group Holding Ltd.’s investment in a hotel data company fueled concern competition will intensify.
Ctrip’s American depositary receipts sank 3.5 percent to $57.19 in New York as analysts at Deutsche Bank AG lowered their price estimate to $77 from $80 yesterday. Online travel search provider Qunar Cayman Islands Ltd. dropped for a third day while smaller rival Elong Inc. extended its quarterly decline to 14 percent. The Bloomberg China-US Equity Index slid 2.3 percent to a two-month low.
Alibaba’s unit Taobao (China) Software Ltd. paid 2.81 billion yuan ($460 million) for a 15 percent stake in Beijing Shiji Information Technology Co., a hotel management system provider. The deal is the first investment by China’s largest e- commerce company since it raised $25 billion this month in the world’s biggest initial public offering. China’s travel operators are striving to benefit from rising incomes and a growing middle class which boost demand for packaged tours.
“Alibaba’s investment will intensify competition in the online travel sector,” Henry Guo, a San Francisco-based senior analyst at JG Capital, said by phone. “We wouldn’t be surprised if Alibaba makes further inroads into the online travel space, considering the significant growth potential there.”
The three-day slump in Shanghai-based Ctrip extended its September decline to 11 percent and put it on track for the biggest monthly drop since January. ADRs of Beijing-based Qunar fell 3.3 percent to $27.58, the lowest close in two months. Elong slipped 1.1 percent to $18.82.
Alibaba’s shares dropped 1.9 percent to $88.75, after posting a 3.7 percent slump last week. The decline trimmed the stock’s gain from its $68 IPO price to 31 percent.
Cheetah Mobile Inc., a Chinese security-software developer, tumbled 6.4 percent in New York to $18.74, the lowest price since June 5. Shares being shorted by investors to profit from a drop surged to 44 percent of the listed American depositary receipts as of Sept. 26, from as low as 2 percent three months earlier, according to data compiled by Markit.
NQ Mobile Inc., a Beijing-based mobile-security service provider, jumped 11 percent to an eight-week high of $7. Frederick Ziegel, an analyst at Topeka Capital Markets Inc., reiterated a buy rating on NQ stock with a price target of $33 in a note dated Sept. 26.
The iShares China Large-Cap ETF, the largest Chinese exchange-traded fund in the U.S., slumped 2.3 percent to $38.27. The Hang Seng China Enterprises Index slid 1.4 percent to a two- month low of 10,439.03 as the city’s currency weakened and equity-market volatility surged amid the biggest police crackdown on protesters since the city returned to Chinese rule.
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