"After careful consideration of such offer, we declined to pursue it in a letter response dated June 1, 2015," Qunar said in its first quarter earnings report. "However, consistent with our policy to consider all potential strategic opportunities that may benefit our company and our shareholders, we remain open to engaging in further discussions with Ctrip as well as with other strategic players in our sector."
Analyst firm Stifel Nicolaus downgraded Ctrip to "hold" from "buy" following Qunar's rejection.
Analyst George Askew expects Ctrip to increase its investment spending in the second half of 2015. "Assuming that Ctrip increases its sales and marketing budget by about $65 million in each of 3Q15 and 4Q15, the additional $130 million in spending (on a revenue base we estimate at $940 million) would wipe out non-GAAP operating income for the full year 2015," Askew wrote.
TheStreet Ratings team rates CTRIP.COM INTL LTD as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate CTRIP.COM INTL LTD (CTRP) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and generally higher debt management risk."