Ctrip plunges with Qunar amid price war concern: China overnight
By Ye Xie January 09, 2014 From Bloomberg Business Week
Ctrip.com International Ltd. (CTRP:US) and Qunar Cayman Islands Ltd. tumbled, pacing losses in Chinese stocks traded in New York, amid concern an increase in online travel discounts will erode profits.
The Bloomberg China-US Equity Index of the most-traded Chinese stocks in New York slid 2.1 percent to 101.80 at 1:01 p.m., the lowest level in two months. Ctrip, China’s biggest online travel agency, and Qunar, a travel-booking website controlled by Baidu Inc., sank at least 12 percent. Qihoo 360 Technology Co. (QIHU:US) fell the most since Nov. 25 after denying that Alibaba Group Holding Ltd. will invest in the company.
Qunar, which has doubled since its initial public offering in November, is joining Tencent Holdings Ltd.’s Weixin mobile payment service to offer air tickets with coupon credits, Beijing-based 86Research Ltd. wrote in a note yesterday. Ctrip, which said two months ago that ticketing services was the biggest contributor to third-quarter revenue, has plunged 33 percent since Nov. 5 after its sales forecast trailed estimates.
“This is a very dynamic competition environment,” Tian X. Hou, the founder of T.H. Capital LLC, said by phone from New York yesterday. “Ctrip is very aggressive investing in new businesses to grab more market share, which will have a negative impact on profit margins. There’s a lot pressure for Qunar to keep up with the competition.”
The iShares China Large-Cap ETF (FXI:US), the largest Chinese exchange-traded fund in the U.S., fell 2 percent to $35.74 in New York, the lowest since Aug. 30. The Standard & Poor’s 500 Index was little changed as investors awaited tomorrow’s jobs report and the start of corporate earnings season.
The Shanghai Composite Index fell 0.8 percent to a five-month low of 2,027.62 as traders speculated the resumption of new share sales will divert funds from existing equities. The Hang Seng China Enterprises Index in Hong Kong fell 1.7 percent to 10,152.82, the lowest since Sept. 2.
To contact the reporter on this story: Ye Xie in New York at [email protected]
For more on this story go to:
1 COMMENTS