Press Room
Trading Update
Strong Growth Achieved in 2007
Et-china.com International Holdings Limited, the leading travel services group in the fast growing region of South China, announces its trading update for 2007 which underlines its progress.
The Group delivered a strong trading performance for the whole of 2007, benefiting from the buoyant Chinese travel market with a particularly good performance from its GZL tour operating business.
Overall Group gross revenue for 2007 amounted to RMB 2,577 million (£177 million *), net revenue was RMB1,710 million (£117 million) and gross profit was RMB 163 million (£11 million). While no direct comparable numbers are available for the Group, the two main operating subsidiaries are significantly ahead of their 2006 results as independent businesses.
GZL, which is one of the largest travel package holiday providers in South China providing tour packages through 160 high street stores and a 24x7 call center, served approximately 1 million package tour travelers generating net revenue of RMB 1,643 million (£113 million), an increase of 37.64% over the corresponding period last year. Gross profit was RMB 148 million (£10 million), a 32.94% increase over last year. Whilst the percentage split of travel destinations remained broadly similar to the prior year; being 51% outbound, 41% domestic and 5% inbound, the absolute number of inbound travelers has increased, reflecting the Group's continued effort to attract additional visitors, particularly from Japan and Korea.
In 2007, the Et-china Limited subsidiary ("Et-china"), which is primarily focused on the frequent independent traveler and corporate account markets, also achieved strong growth. Gross revenue increased to RMB 445.51 million (£30.55 million), net revenue was up 120% to RMB 67 million (£5 million) and gross profit grew to RMB 14 million (£1 million) in 2007.
The e-ticketing business, a joint venture with China's largest airlines, China Southern Airlines, achieved an 85% increase in total transaction value and 53% increase in net revenue over the whole year compared with 2006. Total transaction value was RMB7,808 million (£536 million) and net revenue RMB28 million (£2 million).
In addition to the strong performance of the package tour operations, GZL has seen a substantial strengthening of its balance sheet due to the developments at one of its long-term investments, the equity investment in the GrandBuy Department Store in Guangzhou. It was a small investment made many years ago before Et-china.com International acquired the controlling stake in GZL. GrandBuy went public in November 2007 on the Shenzhen Stock Exchange located in South China. Based on the closing price of GrandBuy of RMB42.99 per share as at 31 December 2007, the market value of GZL's investment would be RMB103.2 million. The difference between the fair value and the original cost of RMB3.6 million is RMB99.6 million (£6.8 million).
Matthew Ng, President and Chief Executive Officer, commented: "I am delighted with the Group's performance. We have seized the opportunities in a fast growing market and achieved strong growth across all our divisions with GZL, our tour operating business providing an outstanding performance. The travel market in China continues to provide tremendous opportunities and, coupled with the growth expected in the Chinese economy, we are looking forward to a strong year of tourism growth in 2008 and beyond."
Contact details for enquiries:
| Et-china.com International Holdings Limited | +44 (0)207 067 0700 |
| Matthew Ng | |
| Seymour Pierce, Nominated Adviser and Broker | 0207 107 8000 |
| Mark Percy | |
| Weber Shandwick Financial | 0207 067 0700 |
| Terry Garrett Stephanie Badjonat John Moriarty |