First Free Story (1 of 3)Join Skift Pro
China’s online travel agencies rallied in New York as a surge in passengers for the nation’s biggest airlines boosted the outlook for profit.
Ctrip.com International Ltd., China’s biggest trip-booking website, climbed 1.4 percent to $72.91 at 3:04 p.m. Elong Inc., whose biggest shareholder is Ctrip, gained for the first time in seven days. Tuniu Corp., which focuses on packaged-tour services, climbed 2 percent. A Bloomberg gauge of the most-traded Chinese companies in the U.S. fell 0.6 percent.
The number of passengers on China’s three biggest airlines jumped the most in two years in the past three months, led by international routes, signaling a boost to the travel agencies’ second-quarter earnings, Shanghai-based 86Research Ltd. said in a note Monday. For Ctrip, airline tickets accounted for 38 percent of revenue in 2014 and 39 percent for the first three months of this year.
“The airlines’ traffic data looked very strong in the second quarter, especially on the international travel side,” Juan Lin, an analyst at 86Research, said in an interview. “While domestic growth would benefit all online travel websites, Tuniu and Ctrip will benefit more than peers from the fast rising overseas trips” because they have a stronger foothold in that market, he said.
Traffic at Air China Ltd., China Southern Airlines Co. and China Eastern Airlines Corp. jumped 12 percent in the second quarter, with a 32 percent increase in international passenger volume, according to 86Research.
Elong, which is 38 percent owned by Ctrip, rallied 3.9 percent to $14.03, the biggest gain since July 9. Tuniu’s American depositary receipts climbed to $16.06. Qunar Cayman Islands Ltd., a Beijing-based online travel search company, added 2 percent to $41.62 in a third day of gains.
ADRs of China Southern, the country’s largest carrier, were little changed. China Eastern advanced 0.5 percent to $44.29. A close at that level would be the highest since June 25.
The Bloomberg China-U.S. Index slid to 125, after climbing 2.5 percent last week, the first gain in a month. The Deutsche X-trackers A-Shares ETF dropped 1.9 percent to $42.64, while the iShares China Large-Cap ETF tracking Hong Kong shares fell 0.5 percent to $42.63, the first decline in three days.
This article was written by Belinda Cao from Bloomberg and was legally licensed through the NewsCred publisher network.