CHINA COMPANY

Chinese travel service Qunar says it expects revenue to double this quarter

Nasdaq-listed Qunar said it expects revenue will more than double in the current quarter from a year earlier

PUBLISHED : Wednesday, 25 November, 2015, 4:27pm
UPDATED : Thursday, 26 November, 2015, 2:34pm

Chinese online travel services provider Qunar expects to cap this year by posting its seventh consecutive quarter of more than 100 per cent revenue growth, following its blockbuster merger with Ctrip.com International.

Beijing-based Qunar forecast revenue in the three months to December will increase between 105 to 125 per cent year on year, the company announced on Tuesday after the close of trading on Nasdaq.

“With Ctrip becoming our largest shareholder, the two teams are currently exploring ways through which we can effectively cooperate to further strengthen our fundamental capabilities and create greater value for travellers, suppliers and shareholders,” Qunar co-founder and chief executive Zhuang Chenchao said.

Online search giant Baidu last month completed the exchange of its equity stake in Qunar for 11.49 million newly issued shares of Ctrip.

That deal made Baidu the largest shareholder in Ctrip, with a 25 per cent interest. Ctrip now owns a 45 per cent stake in Qunar.

In a report, HSBC analysts Tsang Chi and Alice Cai said that the merger would allow Qunar “to enjoy higher synergies and operational improvement” in the US$500 billion China travel market.

Qunar saw revenue in the third quarter rise 164 per cent to 1.32 billion yuan, up from 501.13 million yuan in the same period last year, as mobile transactions and hotel reservation sales soared 381 per cent and 393 per cent, respectively.

Its net loss, however, widened to 734.82 million yuan last quarter from 566.24 million yuan a year ago.

That was attributed to higher operating expenses, led by a 188.6 per cent year-on-year jump in sales and marketing costs to 768 million yuan.

HSBC analysts predicted Qunar has room to cut its operating expenses after the merger with Ctrip.

Qunar’s staff headcount next year is likely to remain flat, compared to its previous plan of adding 1,000 new employees, HSBC said.

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