I’ve heard about CTRP in a few places now. One is here, another here, and a third one here.
Let’s see what all the fuss is about:
- Yearly EPS growth rate has been pretty impressive, except for 2006 which boasts a measly 4.06% (investools). It has over 700% average for the last five years. This is mainly thanks to 2004, in which it had an impressive 3400% growth. 2007 is right on the way back up, with an estimated 6 percent for 2007. It did not beat previous years earnings from 2006 in the third quarter of 2007 (1.92 vs. 1.60).
- “Ctrip now effectively enjoys a near-monopoly in the Chinese online travel market due to its superior management execution” (seeking alpha). It appears to be the travel agency in China.
- They reiterate that CTRP is the “perfect long term play on the emerging Chinese middle-class and their rising purchasing power.”
- Online travel is expected to grow at a 37% rate through 2010.
- It’s believed, from historical evidence, that company directors are being pretty (overly) conservative in their outlooks.
- With the Olympics coming up, there will be a large amount of travel into (and then out of) China.
- A good way to get into Airlines, but without the risk of fuel.
- It has a solid, consistent price pattern (stair-stepping) and is currently looking like it will make a move.
These all sound pretty good. It hasn’t got a perfect earnings record (see RIG), but it’s not bad, either. China is just another one of those places you know is growing fast, and yet I don’t want to be investing in an overpriced, bubble-driven stock. This company has a good spreadsheet, pretty good technicals, and passes the common-sense test. I’m going to put this one on my watch list.
