Today, the South China Morning Post reported that the US and China have agreed to a tentative truce to the trade war and are working on statements in this regard. The truce would delay tariffs on an additional $300 billion worth of Chinese goods entering the US.
Although the S&P 500 and other American indexes fell sizably yesterday on Powell’s less-dovish tone, China’s key indexes remained sideways today after opening lower and gaining in early trade. The Shanghai Composite Index dropped 0.2%, while the Shenzhen Component ended flat. The CSI300 Index lost 0.18%.
The six-day winning streak of the benchmark Shanghai Composite Index was broken today as the index fell 0.87% to close at 2,982.07. This was the longest winning streak in over a year for the index, which has gained 19.6% so far in 2019.
While Asian markets were mixed, China’s Shanghai Composite Index gained 0.21% to end on a positive note for five days in a row. However, the tech-heavy Shenzhen Component ended in the red today.
China’s benchmark Shanghai Composite Index is having a good week. The index rose 2.4% on June 20 to an eight-week high. The index rose in the first half of the day and reached the day’s high.
This week started with Trump threatening China with 25% tariffs on the remaining $300 billion in Chinese exports to the US. He said that the tariffs will come into effect if the deal is not reached by the G20 Summit in Japan at the end of this month.
After Ctrip.com (CTRP) released its 3Q16 results on November 23, 2016, Wall Street analysts estimated that its 4Q16 sales could grow 73% to ~$804 million.
Unlike other online travel industry majors like Priceline (PCLN), Expedia (EXPE), and Ctrip (CTRP), Qunar Cayman Islands (QUNR) earns the highest revenue from flight reservations.
In January 2016, nine Chinese airlines suspended their products on Qunar (QUNR). These included major airlines such as China Eastern Airlines (CEA), Air China, and Hainan Airlines.
The tremendous growth in China’s online travel industry has meant intense price wars. Declining margins have resulted from everyone trying to grab a share of the pie.
For 4Q15, Qunar’s (QUNR) revenues grew to $200 million, a 149% YoY growth compared to 4Q14 revenues of $174 million. Quarter-over-quarter, revenues were almost flat.
Currently, Ctrip.com (CTRP) is trading at a forward PE (price-to-earnings) multiple of 85.5x. This is higher than its average valuation of 37x since April 2004.
Qunar is currently net debt negative. This means that Qunar’s balance sheet has sufficient cash to pay off its debt. Cash on the balance sheet at the end of 3Q15 was $638 million.
Qunar Cayman Islands (QUNR) earns the highest revenue from flight reservations compared to other online travel industry majors such as Priceline (PCLN), Expedia (EXPE), and Ctrip.com (CTRP).
Qunar Cayman Islands (QUNR) is expected to report its fiscal 4Q15 earnings on March 21, 2016. Of the 12 analysts tracking Qunar, six analysts have a “buy” recommendation on the stock.
Ctrip is currently trading at a forward price-to-earnings multiple of 57.4x. Its valuation is higher than its average valuation of 34x as of January 2008.
Of the 28 analysts tracking Ctrip.com, 23 have “buy” recommendations on the stock, four have “hold” recommendations, and one has a “sell” recommendation.
As we discussed in previous parts of this series, growth in the Chinese economy has slowed. But despite this trend, tourism has shown no signs of declining.
Ctrip (CTRP) has seen significant growth in both its top line and bottom line over the past few years. This is due to various strategic management decisions to keep the company ahead of its competitors.
Ctrip.com International is a leading online travel service provider in the Chinese mainland. Since its inception in 1999, the company has grown to become one of the best-known travel brands.
As of November 20, 2015, Ctrip’s (CTRP) forward PE ratio valuation stood at 87.53x. Rivals TripAdvisor (TRIP), Priceline (PCLN), and Expedia (EXPE) are valued at 38.64x, 19.49x, and 23.46x, respectively.
Ctrip.com International (CTRP), China’s leading online travel service provider, reported its 3Q15 earnings on November 19, 2015. It reported better-than-expected results and gave a rosy guidance for 4Q15.
August 24, 2015, known as “Black Monday” due to a huge drop in shares across the globe, is in the rear view mirror for some investors. The September 17 Fed rate hike decision may reignite some of the flames that have fizzled.
Tracking error measures how strongly a portfolio follows the index to which it is benchmarked. The Guggenheim China Technology ETF (CQQQ) shows a high tracking error of 7.26% and follows the AlphaShares China Technology Index.
JAT Capital Management invests primarily in technology, media and telecom, travel, leisure, and gaming companies. In this series, we’ll take a detailed look at the fund’s top holdings in 1Q15.
As per aggregate 13F data, Tudor had allocated at least $81 million of its holdings to companies domiciled outside the US via American Depository Receipts (or ADRs).
