Chinese Internet hotel, airline, and packaged tour travel service provider Ctrip.com (CTRP) reported its unaudited financial results for the quarter ended September 30, 2008.

For the third quarter of 2008, Ctrip reported total revenues of CNY397 million, representing a 15% increase from the same period in 2007 and a 1% decrease from the previous quarter. But the company's net income for the third quarter of 2008 was CNY104 million, representing a 5% decrease from the same period in 2007, and a 12% decrease from the previous quarter.

Trying to put a rosy glow on the company's results, Min Fan, CEO of Ctrip, stated: "Although the travel industry had a tough time during the third quarter of 2008 in China, Ctrip continued to outperform our peers with a healthy growth in revenue year-on-year. While Ctrip is not immune from the current volatile economic environment, our team is focusing on gaining more market share and strengthening our leadership in the challenging market."

Hotel reservation revenues amounted to CNY186 million for the third quarter of 2008, representing a 6% increase from the same period in 2007 primarily due to increased hotel booking volume and a 5% decrease from the previous quarter primarily due to decreased hotel booking volume. Air ticketing revenues for the third quarter of 2008 were CNY166 million, representing a 21% increase from the same period in 2007 primarily due to a 37% increase in air ticketing sales volume, which was offset by a 12% decrease in commission per ticket primarily due to a decrease in ticket prices. Air ticketing revenues remained relatively consistent with the previous quarter.

Packaged-tour revenues for the third quarter of 2008 were CNY28 million, up 37% from the same period in 2007 and up 19% from the previous quarter, primarily due to the increased leisure travel volume. For the third quarter of 2008, net revenues were CNY370 million, a 15% increase from the same period in 2007. Net revenues remained relatively consistent with the previous quarter. Gross margin was 77% in the third quarter of 2008, compared to 80% in the same period in 2007 and 79% in the previous quarter.

The effective tax rate for the third quarter of 2008 was 17%, increased from 15% in the same period of 2007 primarily due to the application of a statutory tax rate of 25% under the new Enterprise Income Tax Law, which became effective on January 1, 2008, to Chinese enterprises that are not entitled to enjoy the grandfathering provision of transitional preferential tax rate. The effective tax rate for the third quarter of 2008 decreased from 26% in the previous quarter primarily due to the transitional preferential tax rate of 18% applied to one of the Chinese enterprises established in Pudong area of Shanghai.

As of September 30, 2008, the balance of cash and short-term investment for Ctrip was CNY1.4 billion.

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