On the evening of July 20, Ctrip Group announced that Baidu's chairman and CEO Robin Li had resigned as a director of the company, effective immediately.。Following Robin Li's resignation, the board of directors of Ctrip Group consists of eight directors, including four independent directors.。

    

Ctrip and Baidu: From "Love and Kill" to "Turn Enemy into Friend"

    

Ctrip is the world's leading one-stop travel platform, the end of 2003 the company went public on NASDAQ in the United States, and then in 2021 in Hong Kong, China secondary listing.。

Where to go to get Baidu 3 in 2011.With a strategic investment of $06 billion, Baidu has become the largest institutional shareholder of Qunar.。In 2013, where to go listed on NASDAQ in the United States。

Ctrip was established early, can be regarded as China's online travel platform "predecessors," and where to back to Baidu "full of confidence," the two companies before no less "love each other"。In 2015, Ctrip invested nearly $400 million to buy Elong 37.6% stake, became the majority shareholder of Elong。Then where to go to the Ministry of Commerce Anti-monopoly Bureau to report Ctrip's acquisition of Elong suspected illegal, and said the transaction touched the relevant national regulations in the declaration threshold, but did not declare to the Ministry of Commerce in accordance with the regulations。At the same time, Ctrip also reported to the relevant departments where there are a number of mergers and acquisitions suspected of not reporting。Ctrip also expressed dissatisfaction with Baidu's preference for where to go in search traffic.。

A few months after the "mutual anger," the two companies suddenly announced that they were "holding hands."。In October 2015, Ctrip announced an equity swap deal with Baidu。According to the transaction, Baidu put the 1.7.8 billion shares of Class A common stock and 11.45 million shares of Class B common stock, replaced by 11.48 million shares of Ctrip's additional common stock。The share swap ratio for this transaction is: where each ADS is converted to 0.725 Ctrip American Depositary Receipts。

With this deal, the two companies officially "turn enemies into friends."。Upon completion of the transaction, Baidu will have Ctrip's common stock representing approximately 25% of Ctrip's total voting rights, and Ctrip will have approximately 45% of its total voting rights.。In other words, Baidu has become the largest shareholder of Ctrip。Although after the reduction, but Baidu is still the largest shareholder of Ctrip, the shareholding ratio reached 10.7%。

As part of the deal, the two companies also sent directors to each other.。Four Ctrip executives including Ctrip Chairman and CEO Liang Jianzhang and Chief Operating Officer Sun Jie were appointed to the board of directors of Qunar。Li Yanhong became a director of Ctrip's board of directors with Ye Zhuodong, vice president of Baidu and head of investment and merger department.。Since 2015, Robin Li has been a director of Ctrip for 8 years.。

      

a win-win deal

     

No matter for which side, Ctrip and where the merger is a good deal。

The first is Baidu, through which the company completed its overall online and offline integration (O2O) layout.。Baidu's Baidu search engine, Baidu Maps, Baidu Takeaway, etc. can all cooperate more deeply with online travel-related products and services.。At the same time, Baidu has also expanded its strategic position in China's domestic tourism O2O market.。After the disclosure of the deal, Jane Yi, a partner at Windsor Capital, has commented that it was an extremely clever capital operation at the capital level.。Through this deal, Baidu guarantees its absolute say in the online travel community of interests, which is made up of three companies.。From the perspective of business prospects, the development prospects and rapid development of the tourism industry will even exceed the real estate industry, Baidu's layout in the tourism sector, the landing of its entire O2O strategy, are significant benefits.。

For Ctrip, the deal allows it to sit on the "leading throne" of the domestic online travel service platform.。Relevant data show that Ctrip's market share in 2021 will reach 36.3%, if you add where to go, the market share is as high as about 50%。

In the domestic market when the "overlord" at the same time, Ctrip is also speeding up its globalization process。In 2016, Ctrip bought Skyscanner, one of the world's largest travel search platforms, for £1.4 billion in cash.。In 2017, Ctrip acquired the American social travel website Trip.Com。In 2019, Ctrip and media company Naspas reached an agreement to exchange shares of Make My Trip, India's largest online travel company, held by Naspas through the issuance of new shares..6% stake, Ctrip's stake in MakeMyTrip accounted for 49 of the total voting rights of Make My Trip..0%。According to the CNNIC report, in 2022 Ctrip's Trip.com ranks among the top 10 online travel apps in terms of downloads for the first time in the world, and in addition, the company's revenue in the European and U.S. markets is gradually recovering, exceeding the level of the same period in 2019。

  

Tourism strong recovery, Ctrip favored by big banks

  

Ctrip's revenue is also a well-deserved "giant" in its industry.。In the first quarter of 2023, Ctrip's net operating income reached 91 in the context of China's domestic tourism recovery..9.8 billion yuan (RMB, the same below), up 124% year-on-year, net profit of 3.4 billion yuan, compared with a net loss of 1 billion yuan in the same period last year and 2.1 billion yuan in the previous quarter.。Adjusted EBITDA of $2.8 billion and adjusted EBITDA margin of 31%。Performance exceeds market expectations。

According to the Ministry of Commerce's big data, in the first half of 2023, China's online travel products and attractions ticket sales increased by 272 year-on-year..4%。In the context of a strong recovery in the general environment, as the industry leader, the second quarter data is expected to continue to usher in growth。Therefore, although Ctrip's second-quarter results have not yet been released, but there are already big banks that are optimistic about Ctrip。

Recently, Bank of America Securities released a research report saying that after communicating with the management of Ctrip Group, it is understood that the strong upward trend in domestic tourism demand will continue into the second quarter, and the company expects local travel bookings to be higher than the 2019 level, while foreign travel will recover about 60%, higher than the industry's expected 40%.。The company believes that the solid upward trend may continue into the third quarter, mainly driven by summer vacation and family travel vacation demand.。

The bank also noted that management expects non-GAAP operating margin to remain 25 percent or more, while revenue may maintain double-digit year-over-year growth in fiscal 2024.。In the long term, management believes that international operations will be the main driver of continued growth.。

The bank adjusted the company's revenue forecasts for 2023-2025 to 115%, 10% and 10% inflation increases, respectively, compared to a non-GAAP operating margin forecast of 27.5%, 27.7% and 28.1%。The bank raised its target price from HK $361 to HK $385, maintaining a "buy" rating.。