[Global Network Science and Technology reporter Wang Nan] Ctrip.com (Nasdaq: CTRP) (hereinafter referred to as “Ctripâ€) today announced its financial results for the first quarter ended March 31, 2017. Data show that Ctrip's net income in the first quarter of 2017 was 6.1 billion yuan (US$884 million), an increase of 46% year-on-year; net profit was 82 million yuan (US$12 million), compared with a net loss of 1.6 billion yuan in the same period last year . From the quarterly earnings data, there are several aspects that warrant attention: I. Total revenue exceeds expectations According to the data provided by MarketWatch, a US financial website, 12 analysts on average expected that, without calculating according to the US General Accounting Principles, Ctrip’s first-quarter earnings per share was US$0.13. The financial report shows that if the equity compensation fee is not included (not in accordance with U.S. General Accounting Standards), Ctrip's diluted earnings per deposit receipt in the first quarter of 2017 was RMB 1.09 (approximately $0.16), which exceeded analysts' expectations. The financial report shows that Ctrip's operating profit for the first quarter of 2017 was 936 million yuan, a year-on-year increase in operating profit of 8 million yuan in 2016. It is noteworthy that, under the U.S. GAAP, the net profit attributable to Ctrip shareholders during the quarter was RMB 82 million. It also continued to be the only profitable online travel company in the Chinese general stock market at the same time of year-on-year growth. Sun Jie, CEO of Ctrip, also concluded that the group has maintained healthy growth in revenue and continuous improvement in profitability. With the strong execution of the team and the support of strategic investment, we are rapidly infiltrating into the second, third and fourth tier cities and expanding to the international market. “The beginning of 2017 is good.†Sun Jie said, “The Group has maintained a healthy growth in revenue and a continuous increase in profitability. With the strong execution of the team and the support of strategic investment, we are rapidly infiltrating into low-tier cities and simultaneously Expand to the international market." Second, the international layout: traffic ticketing revenue doubled growth According to the financial report, traffic ticketing revenue for the first quarter of 2017 was 2.9 billion yuan (US$418 million), an increase of 48% year-on-year. The increase was mainly due to the increase in ticket bookings and the consolidation from December 31, 2016. Sky Patrol's financial performance. It is worth mentioning that in the first quarter of Ctrip's ground transportation ticketing, overall revenue increased by more than 100%, and overseas car rental business increased by nearly 300% year-on-year. According to Ctrip, traffic ticketing also continued to grow strongly, benefiting from the company’s solid operation of its ticketing business, the rapid growth of new businesses, and the merger of Tiantuo’s performance. “The substantial increase in operating profit is inextricably linked with the company’s inclusion of the Skyscanner.†Insiders from Ctrip told Global Technology News. At the end of November last year, Ctrip announced that it had reached an acquisition agreement with major shareholders of Skyscan Holdings Limited to acquire the world-renowned travel search platform based in the UK. The estimated value of the acquisition of Zhongtian Tour is approximately 1.4 billion pounds, which makes Ctrip's tentacles truly reach the hinterland of Europe. "This is the first quarter we have merged Tianzhi's performance," said Liang Jianzhang, executive chairman of Ctrip's board. "By investing in Tianteng and other overseas assets, we will bring more competitive international products and a better user experience to domestic and foreign travelers." In addition, as early as October 24, 2016, Ctrip has announced that it has reached a strategic investment and cooperation agreement with the three leading travel agency companies in the United States, Seagull, Vertical and Horizontal, and has fully deployed the North American tourism market. At present, there are 425 domestic and foreign airlines entering Ctrip's international air ticket platform. Ticket products cover more than 5,000 large and medium-sized cities on six continents. Third, hotels, vacations: thanks to the expansion of the second and third tier cities In addition to accelerating internationalization, accelerating penetration into the second and third tier markets and continuously expanding the scale of users have become Ctrip’s current important development strategy. Recently, from hotel to travel vacation, to the ticket business, frequent actions in the expansion of the ecosystem. In the first quarter 2017 earnings conference call, the Ctrip ecosystem will continue to expand in second and third-tier cities, again being highlighted by Liang Jianzhang. The financial report shows that accommodation and booking revenue for the first quarter of 2017 was 2.1 billion yuan (US$301 million), an increase of 28% year-on-year, mainly due to the increase in accommodation bookings. In the first quarter of 2017, revenue from the tourism and holiday business was 702 million yuan (US$102 million), an increase of 26% year-on-year, mainly due to the increase in team travel and free travel volume. An insider from Ctrip told the reporter that the growth of resort and hotel business mainly comes from the increase in the performance of second- and third-tier cities. On the one hand, Ctrip invested a few hundred million yuan in the second- and third-tier cities in the potential market, and used tens of thousands of hotel resources in hundreds of cities to launch the largest hotel promotions in history. On the other hand, after the integration of Travel Best Practices, Ctrip achieved more than 5,500 store locations in 22 provinces and cities, filling the gap in offline service in 234 cities. In addition, the ticket business continued to fall in second and fourth-tier cities, which is also worthy of attention. Since January of this year, Ctrip has intensified strategic cooperation with Wanda Theme Entertainment Company, Qingcheng Mountain-Dujiangyan Tourist Area, Qianshan Tourism Group and many other scenic spot management companies, and has further extended its reach to second- and third-tier cities. “We are also expanding our user base by enriching product categories and implementing targeted marketing campaigns to further penetrate into low-tier cities,†Liang Jianzhang once said. Up to now, the number of registered members of Ctrip has exceeded 250 million to break through 300 million. Among these, new users mainly come from second- and third-tier cities. IV. Internal operating efficiency creates high gross margin According to the financial report, Ctrip's operating profit margin in the first quarter of 2017 was 7%, a year-on-year, year-on-year increase. At the same time, Ctrip's gross profit margin in the first quarter was 80%, compared to 73% in the same period of 2016, compared to 78% in the previous quarter. This is far more than Wall Street's expectations. Ctrip told Global Technology News that this is inextricably linked to Ctrip’s strategic layout of the ecosystem, service awareness and internal operational efficiency. Recently, Ctrip has launched the first "one-stop" linkage service in the market - the "Full X Plan", that is, if it is unable to travel due to flight changes, consumers only need to call airline customer service and Ctrip will help them cancel the hotel free of charge. Waiting for orders eliminates the trouble of repeated communication. "This new customer service model of online customer service not only improves service efficiency, but also brings convenience to users." Sun Jie introduced the financial conference after the release of the conference call. In addition, Sun Jie also disclosed that Ctrip will continue to introduce multi-transport and interline products, allowing users to connect more cities at a lower cost and make travel more convenient. This year, Ctrip launched a train-to-train transport link, targeting low-line towns that are difficult to reach directly by train. As of the end of 2016, Ctrip's "air ticket + train" booking combination can connect China's 225 airports and 93 cities without airports. These service measures, together with the establishment of Ctrip's ecosystem in hotels and resorts, and Ctrip's own "innovation factor," have all contributed to the continued strength of the business. The financial report shows that in the first quarter of 2017, accommodation and booking revenues were 2.1 billion yuan, tourism and holiday business revenue was 702 million yuan, and business and tourism management business revenue was 144 million yuan. These three businesses performed amazingly year-on-year and month-on-month, and continued to lead their respective market segments. Outlook: Compared to the same period of last year, Ctrip's net income for the first quarter of 2017 was 6.1 billion yuan (US$884 million), and net profit was 82 million yuan (US$12 million), compared to a net loss of 1.6 billion yuan in the same period last year. Liang Jianzhang has repeatedly stressed that "Ctrip's blood is a profitable gene." After the consolidated financial statements on December 31, 2015, due to where to go for 2016, Q1 accrued more than one billion equity incentive costs, and in the first two quarters of 2016, it was still completing the original business of eLong and eLong. In the integration, Ctrip had a loss in the first two quarters of 2016. In the third quarter of 2016, Ctrip entered a profit track with a return to profitability. In the quarter, it achieved a net profit of 24 million yuan. In the fourth quarter, Ctrip continued its profitability, due to net investment income from equity swaps and investment equity, net The profit has increased substantially to 645 million yuan. Ctrip expects the annual growth rate of net operating income in the second quarter of 2017 to be approximately 40-45%. This forecast reflects Ctrip's preliminary judgment based on the current situation and may be adjusted. In Wednesday's regular trading on the Nasdaq stock market, Ctrip.com shares rose 0.80 US dollars to close at 56.13 US dollars, an increase of 1.45%; in the day after-hours trading (as of today), Ctrip.com stock price stopped falling 2.33 US dollars. , to 53.80 US dollars, a decrease of 4.15%. In the past 52 weeks, Ctrip.com’s lowest share price was US$37.36 and its highest share price was US$56.75. The investment consulting company, UOB Huaxian, previously believed that Ctrip is expected to capture the strong growth of online travel by further infiltrating lower-level hotels and various travel products, and the annual growth rate in 2017 will reach 39%. Tianyi Capital said that in view of Ctrip’s dominant position in China’s online travel market and the great prospects of China’s tourism industry, Ctrip’s “buy†rating on the stock is continuing.