Ctrip.com, the Shanghai based travel company, saw its profits rise 48% in the second quarter and it's on the lookout for additional acquisitions.
The company, which in the last year acquired ezTravel in Taiwan and Wing On Travel of Hong Kong, says it would be open to more acquisitons.
"We are always open to any good opportunities in terms of the acquisition and mergers," Ctrip President and CEO Min Fan said during a conference call with financial analysts about second quarter results. "But we take very prudent steps to evaluate them. Regarding M&A opportunities we always focus on whether the target company is a travel related business. Whether the company can bring Ctrip a new business line or penetrate into a new geographical area. Whether the company has the right valuation and also whether the target company is a major player in the segment."
"Most important," Fan added, "we also will see if the target company can share the same philosophy in management service and the culture with Ctrip. So we will keep an eye out on the future opportunities but also we will be very prudent."
Ctrip claims to be the largest online player in China, with some 35% of its bookings taking place online.
Asked about international expansion, CFO Jane Sun said: "Our first priority is domestic China because this is the fastest growing area in the whole world and we are very strong in domestic China, so that’s our first priority. The second step is the Greater China area because the people in the Greater China area share the same language, same culture, so we already strategically made the investment in Wing On and ezTravel. In the next few years, five years, also, if our demand to Asia becomes so strong, then we probably can look at the Greater Asia area."
Sun predicted Ctrip would look to global acquisitions over the long term.
"But from a very long-term perspective in the next 10 or 20 years, I think if our travelers are going abroad then I think our team will also be exploring opportunities globally," Sun said. "But every step we make we have to make it very prudently."
For the second quarter, Ctrip's net income rose 48% to $35 million, on revenue of $103 million, a 46% jump compared with the year earlier period.
Wing On, which was acquired in late May, contributed about 5% to the revenue number during the quarter, Sun said.
During the quarter, Ctrip's hotel revenue increased 42% to $47 million, air revenue rose 42% to $45 million and packaged tour revenue climbed 88% to $10 million.
CEO Fan expects increasing volume from the company's mobile efforts, having launched a mobile site in the first quarter.
Fan explained Ctrip has divergent web and iPhone platform for different smartphones manufacturers.
"The website can automatically jump to the corresponding page according to different models when users to log on Ctrip via their mobile phone," Fan said. "And also our mobile phone website has already started cooperation with our major mobile phone manufacturers and larger mobile portals to give our current site application for download and since the launch of our m.ctrip.com the booking volume is growing significantly."
Ctrip forecasts that its net revenue will rise 35%-40% in the third quarter.