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Taxes Increase For Ctrip’s Chinese Online Travel Services

Internet travel services company Ctrip.com International Ltd. announced its unaudited financial results for the quarter ended March 31, 2011, and stated that revenues rose.

For the first quarter of 2011, Ctrip reported total revenues of CNY814 million, representing a 30% increase from the same period in 2010. Total revenues for the first quarter of 2011 decreased by 3% from the previous quarter.

However, while the company’s net revenues were CNY765 million for the first quarter of 2011, up 30% year-on-year, for the second quarter of 2011, the company forecasts net revenue growth year-on-year to only be 15%-20%.

Also, Ctrip reported that the effective tax rate for the first quarter of 2011 was 21%, increasing from 12% in the same periods of 2010, primarily due to certain tax benefits granted by the local tax bureau in the first quarter of 2010. The effective tax rate for the first quarter of 2011 increased from 19% in the previous quarter, primarily due to the increase in the amount of non tax-deductible share-based compensation as a percentage to our income as a whole.

Gross margin was 78% for the first quarter of 2011, remained consistent with that in the same period in 2010. Net income attributable to Ctrip’s shareholders was CNY235 million in the first quarter of 2011, up 23% year-on-year.

Hotel reservation revenues amounted to CNY310 million for the first quarter of 2011, representing a 23% increase year-on-year, primarily driven by an increase of 20% in hotel reservation volume and an increase of 3% commission per room night year-on-year. Hotel reservation revenues decreased by 14% quarter-on-quarter due to seasonality.

Air ticket booking revenues for the first quarter of 2011 were CNY326 million, representing a 23% increase year-on-year, primarily driven by a 20% increase in air ticketing sales volume and a 3% increase in commission per ticket year-on-year. Packaged-tour revenues for the first quarter of 2011 were CNY125 million, representing a 74% increase year-on-year due to the increase of leisure travel volume.

Corporate travel revenues for the first quarter of 2011 were CNY31 million, representing a 20% increase year-on-year, primarily driven by the increased corporate travel demand from business activities. Corporate travel revenues decreased 12% quarter-on-quarter due to the decreased business activities during Chinese New Year.

As of March 31, 2011, the company’s balance of cash, restricted cash and short-term investment was CNY3.6 billion.

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