Ctrip’s Lowered Pace of Revenue Growth Reflects a New Normal

Ctrip, China's largest online travel agency, faces multiple factors pressuring its pace of revenue growth and profit. In the three months to June 30, revenue rose 13 percent year-on-year to $1.1 billion, or 7.3 billion renminbi. That growth rate was roughly a third of the 45 percent growth rate the company reported a year earlier. The group's net income from operations in the second quarter was 9 percent of net revenue, down slightly from 10 percent in the year-earlier period. But the company is almost unprofitable after stock-based compensation is taken into account. The company prefers to exclude share-based compensation charges and uses its own method of measuring operating margin, which it said was 18 percent in the second quarter of 2017— up significantly from 4 percent for the same quarter in 2016. The company said that its measure showed improvements in operating efficiency and synergies across the company's business units. Dampers on Growth Two factors hurting Ctri