Support Skift’s Independent JournalismMake a Contribution Now
Ctrip.com International Ltd. rallied the most in two years after the Chinese travel-booking website forecast an increase in first-quarter sales that exceeded analysts’ estimates.
The American depositary receipts surged 23 percent to $56.72 as of 12:28 p.m. in New York. A close at that level would be the biggest one-day advance since May 2013. Trading volume of 14.1 million shares was almost 7 times the full-day average of the past three months. Qunar Cayman Islands Ltd., an online travel search company, headed for a one-year high. The Bloomberg China-US Equity Index rose 1.8 percent.
Ctrip, China’s largest online travel provider, said first- quarter sales will grow as much as 50 percent to about $390 million, exceeding all eight analysts’ estimates compiled by Bloomberg. The company said it’s expanding its international travel business as more Chinese can afford overseas trips. The revenue forecast shows that the industry is continuing to grow at a robust pace even as the economy slows, according to Cheng Cheng at Pacific Crest Securities LLC.
“Analysts didn’t expect such strong guidance from Ctrip, which gave record sales growth guidance not only for the first, but also the second quarter, showing management’s confidence about the outlook,” Juan Lin, an analyst at 86Research Ltd. said by phone from Shanghai. “China’s travel sector has always been in a fast-growth mode, and the pace accelerated last year.”
Tourism revenue in 2014 grew 15 percent to $551 billion, Xinhua News Agency reported in February, citing Du Jiang, deputy director of the National Tourism Administration.
Ctrip’s smaller peer Qunar said earlier this month sales may grow as much as 90 percent in the first three months this year, after more than doubling in the prior quarter.
Qunar rose 4.7 percent to $35.37.
The Bloomberg gauge of the most-traded Chinese stocks in the U.S. has advanced for five consecutive days, rallying 5.4 percent in the period. The Shanghai Composite Index surged to the highest since May 2008 in an eight-day rally.
China’s securities regulator, in a statement on its microblog Friday, urged investors to consider risks in investing in the shares traded in the country’s mainland. Margin trading surged to record highs and new account openings rebounded to the highest level since December.
“We shouldn’t be thinking if we don’t buy now, we will miss it,” an unidentified spokesman for the China Securities Regulatory Commission said in the statement.
To contact the reporters on this story: Belinda Cao in New York at firstname.lastname@example.org; Stephen Stapczynski in New York at email@example.com To contact the editors responsible for this story: Nikolaj Gammeltoft at firstname.lastname@example.org Richard Richtmyer
This article was written by Belinda Cao and Stephen Stapczynski from Bloomberg and was legally licensed through the NewsCred publisher network.