Executive Summary

• Ctrip, China’s leading online travel agent, reported in-line 2Q16 revenues of ¥4.41 billion, up 75% year over year. Non-GAAP net profit of ¥0.06 billion beat the consensus estimate of a loss of ¥0.04 billion, but was down 81% year over year due to the consolidation of Qunar.
• Management guided for net revenue growth of approximately 70–75% year over year for the third quarter of 2016.
• Chinese outbound travel to Europe weakened due to the events in Istanbul and Nice, but this was partially offset by strong demand for outbound travel to North America.
• China’s online travel industry is increasingly concentrated and has been shifting to mobile. More than 70% of Ctrip’s orders are generated from the mobile platform.