Tag Archives: qunr

Qunar, Whose Owners Include Baidu, Reportedly Launching Airline

Online travel service Qunar Cayman Islands ( QUNR ), whose owners include Chinese Internet search leader Baidu ( BIDU ), has reportedly confirmed that its travel operation is preparing to launch an airline, in conjunction with two other China-based companies. The airline startup, to be operated by Qunar and a pair of Shenzhen-based firms, will mainly operate domestic and short-haul international flights to nearby countries, with Qunar leading online sales efforts, said reports by Marbridge Consulting and Travel Daily Media . Competition sparked the move, with nine airlines indicating that they would be temporarily suspending their cooperation with Qunar since the end of 2015 due to a dispute over passenger charges, according to reports by Marbridge and Reuters . “Airlines are also shifting their strategy toward selling tickets directly to consumers in an effort to reduce marketing costs,” said Marbridge. “For example, China Southern Airlines ( ZNH ) announced on Feb. 23 that it was cutting the price of domestic flights bought through its own website by 60%. These actions by Chinese airlines were a key catalyst in Qunar’s decision to set up its own airline, according to Chinese news media reports.” Qunar — nicknamed the “Kayak.com of China” — operates in a rapidly growing travel search market, but price wars and competition have dented its profits and profit margins. The number of Chinese leisure travelers going overseas topped 100 million in 2014, Reuters reported, saying foreign travel is expected to grow 10% this year despite China’s slowing economic growth. Qunar posted Q3 revenue of $208.5 million, up 164% from the year-earlier quarter, but its adjusted net loss more than doubled, to $98 million, as it invests in marketing, product sourcing and product development. But both the top and bottom lines beat the consensus view of analysts polled by Thomson Reuters by about 11%. Qunar reported a net loss of 87 cents per American Depositary Share. In October, Baidu-backed Qunar announced a share swap with Ctrip.com ( CTRP ), another leading Chinese online travel agency. Baidu, which had been Qunar’s majority owner, now owns 3% of Qunar, a Baidu spokesman told IBD. The spokesman said Baidu now owns 25% of Ctrip, which owns 45% of Qunar. Baidu stock was down 2% in afternoon trading in the stock market today , near 176, while Ctrip.com was down 3%, and Qunar was down a fraction.

Baidu Travel Service Qunar Reportedly Launching Airline

Chinese Internet search leader Baidu ‘s ( BIDU ) online travel service Qunar Cayman Islands ( QUNR ) has reportedly confirmed that its travel operation is preparing to launch an airline, in conjunction with two other China-based companies. The airline startup, to be operated by Qunar and a pair of Shenzhen-based firms, will mainly operate domestic and short-haul international flights to nearby countries, with Qunar leading online sales efforts, said reports by Marbridge Consulting and Travel Daily Media . Competition sparked the move, with nine airlines indicating that they would be temporarily suspending their cooperation with Qunar since the end of 2015 due to a dispute over passenger charges, according to reports by Marbridge and Reuters . “Airlines are also shifting their strategy toward selling tickets directly to consumers in an effort to reduce marketing costs,” said Marbridge. “For example, China Southern Airlines ( ZNH ) announced on Feb. 23 that it was cutting the price of domestic flights bought through its own website by 60%. These actions by Chinese airlines were a key catalyst in Qunar’s decision to set up its own airline, according to Chinese news media reports.” Qunar — nicknamed the “Kayak.com of China” — operates in a rapidly growing travel search market, but price wars and competition have dented its profits and profit margins. The number of Chinese leisure travelers going overseas topped 100 million in 2014, Reuters reported, saying foreign travel is expected to grow 10% this year despite China’s slowing economic growth. Qunar posted Q3 revenue of $208.5 million, up 164% from the year-earlier quarter, but its adjusted net loss more than doubled, to $98 million, as it invests in marketing, product sourcing and product development. But both the top and bottom lines beat the consensus view of analysts polled by Thomson Reuters by about 11%. Qunar reported a net loss of 87 cents per American Depositary Share. In October, Baidu-backed Qunar announced a share swap with Ctrip.com ( CTRP ), another leading Chinese online travel agency. Baidu stock was down 2% in afternoon trading in the stock market today , near 176, while Ctrip.com was down 3%, and Qunar was down a fraction.

Baidu Advised To Pull A Google And Split Core, Noncore Businesses

Baidu ( BIDU ) stock jumped Friday and the China search leader got at least one upgrade after the company said its mobile business was gaining traction, in posting Q4 earnings that beat views. The company’s revenue guidance for the current quarter, however, fell short, and the slowing China economy has taken a toll on most of China’s Internet stocks. Baidu stock, though, was up more than 9% in midday trading in the stock market today , near 173, its highest price since early January. Baidu stock has risen 73% since late August but has declined 16% in the past 12 months. Other China stocks also rose on Friday. Alibaba Group ( BABA ) and JD.com ( JD ) were up nearly 1% and 1.5% in midday trading, while Vipshop Holdings ( VIPS ) and NetEase ( NTES ) were up a fraction. Summit Research analyst Henry Guo upgraded Baidu stock to buy from hold on Friday and raised his price target to 195 from 169. “We are not so enthusiastic about Baidu’s December-quarter revenue results and March-quarter revenue guidance; however, we are deeply impressed by the strong margin expansion the company achieved in the December quarter,” wrote Guo in an industry note. “Strong momentum” in mobile defined the quarter, he said. Mobile contributed 56% of total revenue in Q4, up from 50% in Q3. Mobile search users rose 21%, he said, while the Baidu Wallet mobile payment service saw activated accounts soar 183% to 53 million. Baidu Wallet competes with Alibaba’s Alipay. Negatives included a 10.9% decline in advertising customers from Q3, Guo said, fallout from Baidu’s deconsolidation with major Chinese online travel agency Qunar ( QUNR ). To continue its growth, Baidu should follow in the footsteps of Alphabet ( GOOGL )-owned Google “and split its non-core businesses from its core search and ads business. If they do this, Baidu stock would likely receive a big boost leaving them with the cash to make a foray into the U.S. market,” Taiwan-based Sephi Shapira, CEO of mobile advertising platform MassiveImpact, told IBD via email. Baidu Investing In Self-Driving Cars, More Like Alphabet, Baidu is investing to develop self-driving cars and other technology not related to its core search operations. In November, Baidu announced it had submitted an application for a direct-banking license in partnership with China’s Citic Bank and for an online insurance license in partnership with Allianz and Hillhouse Capital. This month, Baidu announced that the company has received a nonbinding proposal from two Baidu executives to acquire the company’s fast-growing Qiyi video wing for $2.8 billion. The nonbinding proposal came from Baidu CEO Robin Yanhong Li and Qiyi CEO Yu Gong, Baidu said. The pair have proposed acquiring all of the outstanding shares of Qiyi owned by Baidu, based on an enterprise valuation of $2.8 billion. Should the deal be approved by a special committee formed by Baidu to review the offer, Qiyi will remain a strategic partner but will be independent. Baidu owns 80.5% of Qiyi’s total outstanding shares. As the company offered discounts to win more online-to-offline (O2O) customers, Baidu’s spending also rose. Selling, general and administrative expenses rose 28% year over year to RMB 4.528 billion ($699 million), mainly due to an increase in promotional spending for its transaction services. Last June, Baidu announced it would invest $3.2 billion during the next three years to bolster its lineup of O2O by fortifying group-buying website Nuomi, which Baidu acquired for $160 million in 2014. Baidu has emphasized that big upfront spending to establish its O20 business will pay off because its vast abilities in search will eventually translate to revenue from business commissions. The O2O business model aims to attract customers online and then direct them offline to make purchases at physical stores and to services including health care and food delivery. In October, Baidu-backed Qunar announced a share swap with Ctrip.com ( CTRP ), another leading Chinese online travel agency, in October. Ctrip and Qunar together have a majority of the China hotel and air ticket market. In Q4, Baidu revenue rose 33% year over year in local currency to $2.88 billion, or RMB 18.69 billion. Analysts polled by Thomson Reuters had expected  RMB 18.54 billion. For Q1, Baidu guided to revenue of RMB 15.41 billion ($2.37 billion) to RMB 15.97 billion ($2.46 billion)., up 21% to 25.5% in RMB.