The Ctrip.com International Ltd. has continued to lead the travel service industry in China with its special combination of traditional and online methods. Strong revenue and net income growth was generated through effective cost control and excellent management. Strong economy and further improvement of the internet service in China has created strong demand for Ctrip's service thus bringing a promising outlook for both the industry and the company. Total revenue for Ctrip increased 53.7% in 2007 on a year-to-year basis and gross margin was as high as 77.3%. While net income increased 65.4% with a net profit margin of 33.2%. On the other hand, costs were effectively controlled to support its significant growth. Operating expenses were kept nearly consistent at 66% of total revenue during the period from 2003 to 2007.

The travel industry in China has experienced tremendous change during the recent years with traditional travel companies fading, losing appeals and market shares. Profits decreased sharply as competition became fierce so that companies had to cut their price dramatically to attract customers. On the contrary, new companies like Ctrip.com, eLong and Mangocity have drawn customers’ attention and thrived, representing a relative new industry was born. These companies brought internet and other high technology to their traditional call centers, integrated airline ticketing, hotel reservation and packaged tour together to attract a significant number of “middle class” and young people who do not want to join traditional tourist group but want to customize their tour and still benefit from the low costs. With the number of internet users and “white collar” workers increasing exponentially in China recent years, the potential of such travelling business is becoming remarkable. Despite China shows signs of slowing down, its economy is expected to increase at a considerable rate for the foreseeable future. The demand of such service is going to increase as people’s imposable income keeps rolling over and paid-holiday system keeps improving.

CTRP delivered a well-above-expectation performance in Q4 2007. Its sales revenue was RMB383 million (USD53 million) in Q4 2007, increasing 59% from Q4 2006 and 11% from Q3 2007. Of the revenues in Q4 2007, hotel reservations generated RMB196 million (USD27 million), rising 42% from Q4 2006 and 12% from Q3 2007 and air ticketing generated RMB154 million (USD21 million), increasing 78% from Q4 2006 and 12% from Q3 2007. Packaged tour contributed RMB 22 million (USD3 million), growing 100% from Q4 2006 and 6% from Q3 2007. The annual revenue in 2007 reached RMB1.2 billion (USD164 million), increasing 54% from year 2006. In comparison, its competitor elong, which reported a loss of RMB 14 million, reduces RMB 2.4 million.

For the week, Chinese stocks sufered heavy losses. The "BEST" five stocks for the week were: LONG, TSL, UTSI, SNP and HTX. ELong Inc. said it will announce fourth quarter financial results on February 26, 2008. There is a strong chance that the company will beat analysts expectations, estimates that the company will return to the black. Elong has long been conceived as underdog when it came to industry rival Ctrip.com (CTRP). Ctrip.com has been delivering strong earnings with impressive earnings growth and came under fire lately after heavy snowstorms created havoc right before the Chinese New Year. Bad weather halted trains, mass transportation all over China, denting into CTRP's profit.

With no action in China in due to the Chinese New Year kicking in, U.S. listed Chinese stocks or adrs tracked U.S. market sentiment very closely. Regarding the home market, Wall Street finished a dismal week with a mixed performance Friday as investors grappled with fears about insurers of distressed mortgage-backed bonds and anxiety about the broader economy. The DJIA dropped over 60 points while the NASDAQ composite gained.

China stocks post biggest weekly loss in a decade: China's main stock index closed Friday with a weekly loss of 8 percent, its biggest weekly drop since May 1997. Chinese ADR portfolio was just as bad with no clear indication where the bottom is. Look up from the table below how your Chinese stocks did.

I have been following Chinese ADRs (U.S. listed Chinese companies) for a long time to realize a change in the dynamics of new IPOs. Investors have to be very selective when it comes to Chines IPOs, especially that high quality Chinese companies seems to choose Hong Kong and Shanghai lately.

Mr. Alan Greenspan is still a heavyweight. Some secondary remarks from the former FED Chairman, e.g. the U.S. is showing signs of recession, shook global equity markets overnight.

Earnings announcements are one of the most important moments for public companies. This is a bonanza for fundamental analysts who can x-ray the companies by examining these financial statements.

2006 was “The Year” for Chinese stocks. A seemingly unquenchable investor thirst for all things Chinese helped propel the Shanghai Composite Index to a 130% gain for the year, followed closely by the Hang Seng China Enterprise Index.

Investing in Chinese equities is a risky business. But one can ask: how risky? Is there a reliable risk measure geared specifically to investors who navigate in the Chinese stock universe? Our current Newsletter addresses this very important question and will shed light on stocks that are relatively safe and stocks that you should avoid.

Liquidity, or the ability to buy and sell large blocks without effecting the share price, is perhaps the most important factor for institutional investors in choosing where to execute their trades. Looking at the Chinese stock universe from an American investor’s point of view, there are three markets that investors would consider: the NYSE, the NASDAQ and the Hong Kong Stock Exchange. Investing in Shanghai and Shenzen is still limited for foreigners and is further complicated by corporate accounting differences and information asymmetry.

Based on the enthusiastic feedback we received from several of our clients, we attempt to use the same methodology to give a unique analysis of the NASDAQ listed Chinese stock universe. What makes our analysis very relevant is that seventeen liquid Chinese NASDAQ names reported quarterly earnings in the month of May, 2006.

I can’t help but quote from our February Newsletter, page 4 last paragraph. “Based on our latest field trip to China, Chinavestor.com expects The9 Ltd. (NCTY) to report a nice surprise. On the other hand, we did not see much activity of Shanda’s line of products and expect the battled game and home entertainment developer to slip.” End of quote. So when Shanda released earnings after the close on February 27th, disappointing news did not surprise us. China’s top online game operator said it swung to a quarterly loss and missed Wall Street revenue targets as online game sales weakened, sending its shares down 19 percent after hours.

I can’t help but quote from our February Newsletter, page 4 last paragraph. “Based on our latest field trip to China, Chinavestor.com expects The9 Ltd. (NCTY) to report a nice surprise. On the other hand, we did not see much activity of Shanda’s line of products and expect the battled game and home entertainment developer to slip.” End of quote.

Chinavestor noticed when China Mobile (Hong Kong) Ltd. (CHL), the world’s biggest wireless carrier, announced on Dec 13, 2005 that it is seeking to sell shares domestically to complement Hong Kong and New York listings. And again when Aluminum Corp. of China (ACH), the world’s second largest alumina producer, announced plans to take its A-share companies private, paving a way for its own listing in mainland China. The Company will need a total of more than 5.6 billion yuan ($694 million) to buy the shares it does not own in it’s A-share units.

Chinavestor “Stock of the month” ends up 5.2% in 2005 and is up 55.6% since inception, despite the fact that China’s booming economy failed to translate into stock-market gains. Defying rises in oil prices and interest rates, Asia stocks rose as domestic economies picked up and foreign funds sought cheap valuations. But the country level performances were far from uniform with indices in the greater China region at the bottom of the list.

Chinese Companies have come a long way compared to even a year ago. It used to be hard to find relevant information about financials, quarterly reports submitted to the Exchanges on time were the exceptions.

Even though China’s economy continues to boom, to transform that into the green in our own pocket, is a different story. Investors have to remember that not economic growth but corporate earnings are driving stock prices. For the most part, of course. In addition to current earnings, seasoned analysts have to be able to differentiate between high– and low-quality earnings.

On a quiet Wednesday, August 31st, China Telecom (CHA) Corp. Ltd., China’s last major NYSE listed player reported earnings. The market hardly noticed as investors worried about high oil prices and news of a hefty share sale by PetroChina (PTR). For us, however, this quiet day was much more. We can now kick back and get a sense of what is going on in China, in micro level. Because we all know that economic growth doesn’t necessarily translate into steady stock-market gains, and the Chinese market faces numerous challenges, ranging from company scandals and limited corporate disclosure to efforts by the government to sell its large stake in Chinese companies without hurting the share prices.

On a quiet Thursday, July 21st, China scrapped the Yuan's decade-old peg to the U.S. dollar and shifted to an undisclosed basket of currencies to manage the currency. As part of the move, the central bank revalued the Yuan to 8.11 to the dollar, effectively a 2.1% in crease in the Yuan's value.