Ctrip.Com International Ltd (NASDAQ:CTRP) Q1 2019 Earnings Conference Call - Final Transcript

May 22, 2019 • 08:00 pm ET

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Ctrip.Com International Ltd (NASDAQ:CTRP) Q1 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, welcome to the First Quarter 2019 Ctrip.com International Limited Earnings Conference Call. My name is Aaron, I will be the moderator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. As a reminder, this conference is being recorded for replay purposes.

Now, I will hand the call to Senior IR Director, Michelle Qi. Please begin.

Executive
Michelle Qi

Thank you, Aaron. Good morning, everyone, and welcome to Ctrip's first quarter of 2019 earnings conference call. Joining me today on the call are Mr. James Liang, Executive Chairman of the Board; Ms. Jane Sun, Chief Executive Officer; and Ms. Cindy Wang, Chief Financial Officer.

During this call, we will discuss our future outlook and performance, which are forward-looking statements made under the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our results may be materially different from the views expressed today. A number of potential risks and uncertainties are outlined in Ctrip's public filings with the Securities and Exchange Commission. Ctrip does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

James, Jane and Cindy will share our strategy and business updates, operating highlights and financial performance for the first quarter of 2019, as well as the outlook for the second quarter of 2019. After the prepared remarks, we will have a Q&A session.

With that, I will turn the call over to James. James, please.

Executive
James Liang

Thank you, Michelle. Thank you, everyone, for joining us on the call today. We are happy to report that our first quarter results reflect our continued confidence in China's travel industry, as well as in our own ability to execute and embrace any changes. We delivered a solid year-over-year result, revenue growth of 21%, reaching RMB8.2 billion. Our operating profit grew 50% year-over-year.

In April, we announced the share exchange transaction with Naspers for MakeMyTrip. Today, I would like to share with everyone the strategies that we will use to drive our business expansion, as well as to reiterate our view, our MakeMyTrip investment. First, our major growth drivers looking forward, we will continue to create long-term value for our shareholders, primarily through organic expansion with focuses on expanding our customer base and deepening user engagement. First, we still have a long way ahead to unlock the full potential of our China customer base. Overall travel demand remains strong, especially from lower-tier cities. So far we have only reached just 25% to 30% of the population in the first-tier cities and much less than 10% in lower-tier cities. Second, we will work hard to enhance engagement with our existing customers. Our five-year cohort data shows average spending per user on our platform continues to increase with around 10% CAGR regardless of which tier city our customers perform. Thirdly, we're well prepared to offer high-quality services to customers outside of China. Trip.com is one of our rising stars.