Good day, ladies and gentlemen, and welcome to the Q4 2010 Ctrip.com International Ltd. Earnings Conference Call. My name is Cole and I’ll be your operator for today. At this time all participants are in a listen-only mode. Later we will conduct the question-and-answer session. (Operator Instructions). As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Ms. June Zhu, Senior IR Manager for Ctrip. Please proceed.

Hello everyone. Thank you for attending Ctrip’s fourth quarter and full-year 2010 earnings conference call. Joining me on the call today we have Mr. James Liang, Chairman of the Board; Mr. Min Fan, President and Chief Executive Officer; and Ms. Jane Sun, Chief Financial Officer. We may during this call discuss our future outlook and performance which are forward-looking statements made under the Safe Harbor Provisions of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our results may be materially different from the views expressed today. A number of potential risks and uncertainties are outlined in Ctrip’s public filings with the Securities and Exchange Commission. Ctrip does not undertake any obligation to update any forward-looking statement, except as required under applicable laws. Min, James and Jane will provide a business update, industry outlook, and the financial highlights for the fourth quarter and the full-year 2010, as well as the outlook for the first quarter 2011. We will also have a Q&A session towards the end of this call. With that, I will turn to Min for our business update, please.

Thanks June, and thank you to everyone for joining us today on the call. I’m glad to report that our team once again delivered strong results in the fourth quarter of 2010. Our net revenues grew 39% year-over-year and net income grew 59% year-over-year. For the full year of 2010, our net revenues grew 45% year-over-year and net income grew 69% year-over-year. During the fourth quarter, was the successful end of the Shanghai World Expo, the travel industry began returning to normal. The Ctrip team was able to outperform the competition and gain an even greater market share. Our hotel supply network achieved vast expansion to satisfy the growing needs of our customers with 17,000 hotels now compared to 9,800 hotels by the end of 2009. The number of hotels will guarantee a lot more rooms further increased and accounted for more than 75% of the total hotel supply. Our licensed system connections with more hotels further enhanced the customer experience and satisfaction. Our air ticketing volume maintained robust growth despite the high comparison base, which is a clear indication of our incomparable service capacity and quality, our key drivers of our significant market share gains. The Ctrip team will keep working hard to add more value to our airline customers and our customers, and help them to achieve their goals. Boasted by increased household income and a stronger consumer confidence, tour package revenues increased by more than 8% in the fourth quarter, despite a post-Expo slowdown. Our leisure travel products provide more variety and the coverage within China and around the world to satisfy fast growing demand. Wing On Travel once again was awarded the honor of Best Travel Agency in Hong Kong for 2010, the fifth consecutive year the company has earned this great honor, dating back to…

Thanks Min. The government has been gradually laying out the details of the 12th five-year plan of China, including a projected increase in tourism’s percentage contribution to GDP. Such an increase will assure golden age for the travel industry and maintain growth momentum across the travel service sector. The 12th five-year plan also includes many favorable policies for infrastructure development. China possesses a great amount of natural, travel and leisure services that are currently not very accessible due to underdeveloped infrastructures, especially in Western China. Once the situation has improved, it will benefit travelers and travel service providers alike. Ctrip succeeds because of its dedicated and experienced team of travel industry veterans and its focused business development plan. We are confident that we will be able to capitalize on even more opportunities moving forward and generates even better returns on your investments. Now, I will turn to Jane for financial updates.

Thanks James. I’m very pleased to report solid results for the fourth quarter and for the full year of 2010. For the fourth quarter of 2010, net revenues were RMB787 million or USD119 million, representing a 49% increase from the same period in 2009. Net revenues for the fourth quarter of 2010 decreased by 3% from the previous quarter due to seasonality. In the fourth quarter, Wing On Travel and ezTravel contributed 8% for the year-on-year growth for net revenues. For the full-year ended December 31st, 2010 net revenues were RMB2.9 billion or USD437 million, representing a 45% increase from 2009. In 2010, Wing On Travel and ezTravel contributed 7% for the year-on-year growth for net revenues. Hotel reservation revenues amounted to RMB360 million or USD55 million for the fourth quarter of 2010, representing a 31% increase year-on-year, primarily driven by an increase of 27% in hotel reservation volume, and an increase of 4% commission per room night year-on-year. Hotel reservation revenues increased 3% quarter-on-quarter. For the full-year ended December 31st, 2010 hotel reservation revenues were RMB1.3 billion or USD194 million, representing a 36% increase from 2009. The hotel reservation revenues accounted for 42% of total revenue in 2010, compared to 44% in 2009. Air ticketing booking revenues for the fourth quarter of 2010 were RMB320 million USD48 million, representing a 35% increase year-on-year, primarily driven by a 29% increase in air ticketing sales volume, and a 5% increase in commission per ticket year-on-year. Air ticketing booking revenues increased 1% quarter-on-quarter. For the full-year ended December 31st, 2010 air ticketing booking revenues were RMB1.2 billion or USD183 million, representing a 39% increase from 2009. The air ticketing booking revenues accounted for 39% of the total revenues in 2010, compared to 41% in 2009. Packaged-tour revenues for the fourth quarter of…

(Operator Instructions). Our first question comes from the line of Richard Ji with Morgan Stanley. Please proceed. Richard Ji – Morgan Stanley: Hi, Min, James, Jane and June, and Happy Chinese New Year to you and also congratulations on a very strong quarter.

Thank you.

Thank you. Richard Ji – Morgan Stanley: Sure. I have two questions. And, first – let me start with the first one. And, obviously, we are seeing an uptrend for your air tickets as well as the hotel booking commissions. Can you help us with the outlook for the commission trend going forward? In particular, have you – or what is the latest feedback from your airline partner regarding the commission arrangements?

Sure. Regarding the commission arrangements with the airline partners, we have been seeing that the air condition rates has been stabilizing. Richard Ji – Morgan Stanley: And, going forward, I mean what is your thought for the commission rates going forward?

Sure. Going forward into Q1 2011, commission rates should remain very consistent from Q4 2010. Richard Ji – Morgan Stanley: Okay, thank you. And then, secondly, regarding your 1Q 2011 outlook, obviously you have delivered a very robust quarterly performance in 4Q 2010 and yet for next quarter you are conservatively guiding for only 20% year-on-year growth. Can you help us understand that a little better, whether that is due to the base effect last year, or are we still seeing some lingering impact from the World Expo?

Sure. Richard, I think you are right. The base for Q1 2010 was pretty high, that’s why the guidance is clearly conservative. And, also, the visibility for Q1 2010 is still limited. That’s another reason why we want to be prudent when we provide our guidance. Additionally, there are several unexpected uncontrollable events that’s going on. Such as, what’s going on in Egypt, in Australia, and also in Thailand and in Cambodia, in Korea. All these things, individually might not be material to our business. But if you aggregate them together it might impact consumers sentiment, therefore we want to be prudent when we give our guidance for the Q1 of 2011. Richard Ji – Morgan Stanley: Okay, understood. Thank you.

Sure, thank you.

Our next question comes from the line of Mike Olson with Piper Jaffray. Please proceed. Mike Olson – Piper Jaffray: All right, thanks, good morning.

Good morning.

Good morning.

I just had a couple of quick questions. So just digging in a little more on Q1, what are the guidance assumptions for air and hotel volume and pricing that are built into the guidance?

Sure. I think if we take the volume and also commission rate versus pricing, our assumption is, on a per ticket and a per room basis, commissions remain very consistent on a year-over-year basis. So the guiding force for our revenue growth is mainly coming from the volume growth. So included in our 20% year-over-year growth, we assume hotel reservation is similar around 10%, air ticketing 15%, packaged tour around 17%, and corporate travel 15%. So if you add them all together – averaging its revenue growth is about 20% on a year-over-year basis. Mike Olson – Piper Jaffray: Okay, got you. And then over time, I guess, just given the changing or maybe uncertainty around air commission rates, and I know you said they have stabilized but they are probably less certain than some of the other areas of your business. And then also the improvements in rail travel, do you anticipate that you'll have to de-emphasize the amount of revenue that's coming from air over time? In other words will you focus on growing hotel and packages more than air over the next several years?

I think our revenue is very diversified. Right now, we have four major lines of business, hotel, air, packaged tour, and corporate travel. All of them are growing at a healthy pace. And, as always, our team puts lots of efforts in developing new products. So, hopefully, we will have more diversified revenue which will support our ongoing business. Mike Olson – Piper Jaffray: All right, thanks very much.

Sure, thanks.

(Operator Instructions). Our next question comes from then line of Chenyi Lu with Cowen and Company. Please proceed. Chenyi Lu – Cowen and Company: Great, thank you. I have two questions. The first question I have regarding your gross margin trend. This quarter again the gross margin is really strong, and can you give us – if you can give us a breakdown by the segment for each of your product segment gross margin?

Sure. Gross margin for Q4 was very strong. And, for each product line, it’s remained fairly consistent. For hotel, they’re ranging somewhere around 85% to 90%. For air ticket, it’s a little lower, 65% to 70%. And, for packaged tour, it’s in between, because it’s a combination of hotel plus air, so it’s about 70% to 80%. And, corporate travel, is similar to air ticketing’s gross margin. Chenyi Lu – Cowen and Company: Okay, great. And then, so given that this year the gross margin has been trending up, from the first quarter 2010 to the December quarter, can you give us a view of your gross margin going to 2011? Thank you.

For 2011, conservatively gross margin can be stabilized, somewhere between 75% – 76%, and operating margin can be stabilized to somewhere around 40%. Chenyi Lu – Cowen and Company: Okay, great, thank you. That's all my questions.

Thanks.

Our next question comes from the line of Aaron Kessler with ThinkEquity. Please proceed. Aaron Kessler – ThinkEquity: Yes, hi, good morning, a couple of questions. First, can you give us a sense for the linearity throughout Q4? I mean it sounds like November was fairly weak, December came back, and just maybe a sense for what you've seen so far in January? Also, any update on the online mix of business as well as mobile? I believe you started mobile in the last quarter or two. Thank you.

November was very slow just because World Expo. And in October, and people went back to work and kids went back to school. In November, it came back a little bit. And, in January, this year, the Chinese New Year was a little bit earlier than last year. So from a year-over-year comparison perspective the comparability is not very consistent. That is why we also want to be very prudent while we keep our efforts in monitoring the development for the quarter. Aaron Kessler – ThinkEquity: Great, and also the – in terms of the online mix and mobile?

Sure. Online, overall 40% plus of the transaction are being conducted on the online format. And mobile is developed – is being developed very quickly. Our three major platforms are getting platform momentum, however it’s very small. Percentage wise it’s very minor to our business right now. Aaron Kessler – ThinkEquity: Great. And just any insights into the tax rate for 2011 and other income line was much higher than expected. And I know there was tax rebates in Q4, if you can just give us a little color there. Thank you.

For 2011, in the past – in the past three years, we have been granted high technology status. 2011, the tax authority will renew our – review our application for the renewal of the high technology status. And the final decision will not be made until the later part of the year. So for Q1 for your modeling purposes, we believe consistent tax rate of 19% to 21% is a reasonable estimate based on our best visibility right now. Aaron Kessler – ThinkEquity: Okay, understand. Any insights into that other income line item?

For Q1, we do not expect any – Aaron Kessler – ThinkEquity: Correct.

Yes. For Q1 – we do not expect any subsidiaries for Q1. Going forward, when we’re moving to Q2, we will provide a more precise guidance. Aaron Kessler – ThinkEquity: Great, thank you.

Thanks.

Our next question comes from the line of Alex Yao with Deutsche Bank. Please proceed. Alex Yao – Deutsche Bank: Hi, good morning, everyone, and congratulations on a very strong quarter. My first question is regarding the investment in Dining Secretary. Can you help us to understand a bit more on the rationale behind investment and also where do you see the synergy comes from and how would you integrate this business into the existing one? Thank you.

Yes. Dining Secretary is the largest restaurant reservation business in Shanghai and also in China. And Ctrip values Dining Secretary’s brand name and expertise in this segment. As you know, Ctrip has a nationwide of fast-growing loyal customer base. And through this alliance, Ctrip and Dining Secretary can leverage the strengths of each other to expand geographically and to provide more comprehensive service to our customers. So I think, for the invest for Dining Secretary this will enrich our service providing and also to enhance our customer loyalty. Alex Yao – Deutsche Bank: Okay, got it. What would be the accounting treatment for this deal? Is it going to be treated as aggregate investment?

Yes, it’s – investment is capitalized on our balance sheet. Any gain or losses based on the evaluation will be recorded in the other comprehensive income, so only balance sheet items is going to be impacted. Alex Yao – Deutsche Bank: Got it. My second question is regarding the Lvping.com. Can you talk about what's the rationale for spin-off this website and what would be the monetization plan of this one? Thank you.

Yes. For Lvping.com, generally speaking, it’s similar to TripAdvisor, which is a website that’s created to help travelers to find valuable information about hotel, destination and attractive deal in those, so that it will be more credible, can be the most credible trip advisor for our customers. And Lvping.com is a part of Ctrip’s strategic plan for next several years. We will continue to increase our future offerings to help users to get travel information more quickly and accurately and to become the most reliable platform for experience sharing and travel information search. And Lvping.com will also run independently, and not only cooperate with Ctrip, but also work together with other OTAs and other travel industry players. Alex Yao – Deutsche Bank: Okay, got it. Thank you very much.

Thank you.

Thank you.

Our next question comes from the line of Alicia Yap with Citigroup. Please proceed. Alicia Yap – Citigroup: Hi, good morning, thanks for taking my questions. My first question is regarding the 2011 outlook. I know it's a little bit early, but just can you share with us the growth expectations for the hotel, air ticketing and also the packaged tour?

Sure. I think based on our guidance, simply, we expect for Q1, the revenue will grow about 20%, and we want to maintain a very conservative attitude when we provide our guidance, just because we are moving to the new year and the visibility is very limited. So as we discussed, included in the 20% guidance, hotel is about 10% growth, and air ticketing 15%, packaged tour 17%, and corporate travel 16%. Alicia Yap – Citigroup: Just to follow up on the pricing, does that mean that the hotel and the ticket pricing will be flat year-over-year?

Yes. In our assumption, we assume our each room and our each ticket, commission per room and commission per ticket remains fairly consistent. So the main driving force will be volume increase. Alicia Yap – Citigroup: Understood. And just quickly, the second question is, we understand that NetEase recently launched a travel channel. How do you see that and any potential threat from the competitive front? Thank you.

Yes. I think for this travel community channel, we [inaudible] separate and independent website. And for other big travel – big portals, and when they provide a service, especially provide a travel industry services and it’s more like a supermarket, whereas Ctrip is as professional travel provider. So I think the business model is quite different. So for customers who will be more interest in the service quality and for one-stop solution they still will build Ctrip as the best travel website for their demand. Alicia Yap – Citigroup: I see, I understand. And can I just quickly ask about the latest Chinese New Year traveling trend? Compared to last year, for example, for Wing On and all your packaged tour, have you seen the volume increase in line with your expectations?

Yes, Alicia it’s very difficult to compare on the calendar year, just because this year, the Chinese New Year is a little bit earlier, 10 days earlier than last year. So we had to wait for another month or two in order to get to a comprehensive number to give you a need for guidance, because if you simply pull out certain days, it’s not really comparing apples-to-apples. Alicia Yap – Citigroup: Okay, understood. Thank you so much.

Thanks Alicia.

Thanks.

Our next question comes from the line of Yu Jin with CICC. Please proceed. Yu Jin – CICC : Hi, good morning, and thank you for taking my questions. So I remember doing a media interview and you said Ctrip will become a more service oriented company in the future from current agency model. So my question is can the management elaborate the – what kind of strategic approach they will take to achieve that objective to become a more service oriented company and what kind of financial impact from that strategy? Does that mean we can expect more stronger growth from packaged tours and corporate management than those pure booking business? Yes, that’s from my side. Thank you.

Jin, I think your question was cut-off during the call a little bit, but if we understand you correctly, you would like to know if Ctrip is going to provide the more service provider. Yu Jin – CICC: Yes.

Yes. I think – Yu Jin – CICC: I read on news [inaudible] Ctrip will become a more service oriented company. So my question is what kind of strategic approach we can expect that the company will take to achieve that objective? It seems that a kind of model transition or model expansion to more service areas.

Giving more service oriented? Yu Jin – CICC: Yes. Actually I'm not sure. Yes, I didn't get exactly from the newspaper, but I got the title that means that our company will become a more service oriented company. So I want to – whether the management can elaborate on that strategy and what kind of strategic approach we will take to achieve that strategy.

Okay.

We internally launched a perfecting service campaign to find service providing for customers and this perfecting service campaign mainly will be achieved by our – as you probably are aware, Six Sigma method, project management, and through more defined streamline and also what will cause more streamlined, more packaged customer service providing. So we hope to those methods we can provide best service for customers and also we can differentiate feature from other travel service providers. So I guess this probably you can see from the – you can read from the public newspapers. Yu Jin – CICC: Sorry, I think I didn't get my, how do you say, my question clearly. Can I ask the question in Chinese?

Sure.

[Chinese Language]

Okay. In fact, we are – what we are – think about is to we need to provide more comprehensive service to our customers and also we need to provide more one-stop solution service to our customers. But more comprehensive service means that, for example, we are not only hotel booking or air ticketing company, we will provide a leisure – more leisure products which is more defined, developed and also sometimes we will make more personalized for our customers to enlarge our service providing. And also in the meantime, we will provide related travel services including and we just talked about Lvping.com, we will enrich our information providing, and also like we just talked about the Dining Secretary while our customers when they travel around, probably they will need more, they will have the needs to book restaurants are either business purpose or their leisure purpose. Through Ctrip website, they can also take these one-stop solution or one-stop services. So what we think about is we will provide more comprehensive service and one-stop service for our targeted customers. Yu Jin – CICC: Okay, helpful. Understood. Thank you.

Thank you.

Actually, I’m thinking about the second part of your question. Do you mind repeating it? Yu Jin – CICC: Actually it's another question that I want to make sure that 20% year-on-year growth for the first quarter, does that include a contribution from Wing On or not? I remember that Wing On is not consolidated in the last year in the fourth quarter.

Yes. All the guidance we have given is on a consolidated level. So all the numbers includes Wing On. Yu Jin – CICC: The consolidated basis it's not idle driver basis?

Correct, correct. Yu Jin – CICC: Okay.

We now probably well represent somewhere around 5% of our total revenue. Yu Jin – CICC: Okay, I understand. Thank you.

Thanks.

Thank you.

Eddie Leung – Bank of America Merrill Lynch: Hi, good morning, guys. I have two questions. The first one is on the industry ASP of tickets and room nights in the fourth quarter. I'm wondering Jane if you can give us the ASP trends in the fourth quarter on a year-over-year basis?

Sure. I think in our guidance based on our best visibility, we assumed that for each ticket and for each room, it’s remaining fairly consistent. So ASP is very consistent on the year-over-year basis. Eddie Leung – Bank of America Merrill Lynch: Got that. And then the second question is on the number of staff. Could you give us the total staff number in the fourth quarter? And especially importantly for 2011, what's your plan on the staff force as well as on salary, given the inflationary pressure in China? Thanks.

Sure. I think, as of year-end, we have approximately 12,000 employees in our total employee pool. And as many of you have probably have heard the news, the labor pressure is impacting all the business, and Ctrip is included as well. However, we will work very hard to do a couple of things. First of all, we will make sure we continuously to improve our efficiency. And secondly, we also want to make sure we give very good career path to our employees, so they can grow with our company. But, nevertheless, I think every company is monitoring the labor pressure and salary pressure of our company. So there is pressure, but we will do our best to manage it. Eddie Leung – Bank of America Merrill Lynch: Jane, just one follow up – should we expect the staff force to increase in a normal rate? Basically there has not been any freeze of headcount at the moment, right?

Yes. Normally when we plan our business, we are very careful and prudent. We make sure that our cost is in line with our top line growth. So, yes, it’s a planned, but no freeze. Eddie Leung – Bank of America Merrill Lynch: Got that. Thank you.

Thanks.

Eric Wen – Mirae Assets : Hi, good morning. Thanks for taking my questions. Jane, I just want to get a sense of – also on the guidance. On the first quarter, I understand a few of the competitors have launched group travel deals. Do you see that it has impact on your first quarter outlook? And secondly, the first quarter, do you think it reflects mostly the industry trend on volume or rather competitive pressure on the volume? Could you comment on that? Thanks very much.

Sure. First of all on the group buy, we are monitoring the developments very carefully. However, Ctrip’s model in a way is a group buy already. For travel packages, I think it’s already – we group all the customers from different destination. That’s how we form different tour groups for the business. And our – the other business, it’s very a time sensitive, so in terms of coordinating, timing, it takes lots of effort. But, yes, we – our business model in a way already a group buy already. Secondly, I think in the other countries what we are seeing is, group buy worked very well in the areas that is not time sensitive. So commodity products, it’s easy to do a group buy. But for traveling, sometimes it’s difficult to do that. So, yes, our guidance takes into consideration of all the new business development in the industry. So that reflects everything. Secondly, in terms of competitive landscape, we monitor all the new players. So far the – we haven’t seen major impact on our business. The guidance reflects our visibility for the industry and also reflects our prudence in providing the guidance. Eric Wen – Mirae Assets: Thank you very much.

Sure, thank you.

Our next question comes from the line of James Mitchell with Goldman Sachs. Please proceed. James Mitchell – Goldman Sachs : Great, thank you for taking my questions. Two quick questions. First one – sorry to harp on it, but could you talk a little bit more about your guidance 10% room night growth in Q1? It seems like a very slow rate. I think that you grew 10% even in the global financial crisis in the second half of 2008. Is there a reason why you wouldn't grow materially faster now? And then the second question is, when you consolidate the hotel reviews in the new Lvping website, is there a danger that website replaces the core Ctrip engine in the Baidu natural search results and that the core Ctrip engine then drops down those results?

Sure. I probably would answer your first question and Fan will answer your second question. In terms of the guidance, 20% is a prudent guidance, and very conservative as well. The hotel business is guided at about 20%, just for a couple of three things. First of all, I think we are still very early in the quarter, so the visibility for the quarter is limited. And normally before the Chinese New Year, hotel business is very slow, because people – business people travel less before Chinese New Year and during Chinese New Year. Everything we have right now, I think it’s prudent to guide – to provide our guidance at a very conservative level. James Mitchell – Goldman Sachs: Jane, are you seeing people traveling even less than usual before the lunar New Year holiday because of lower economic environment or some of the external issues you mentioned?

This year compared to last year, January versus last January, it’s – the comparability is not there, because the Chinese New Year this year is 10 days before last year. So it’s hard to say is it because of the calendar it shifted, or it’s because of the industry. So that why we have to wait for another month and advocate three months together, then we’ll have a meaningful comparison. James Mitchell – Goldman Sachs: Okay.

Regarding, Lvping.com, Lvping.com will be operationally independent from Ctrip and it will be open to all of the video users, and it will work hard to leverage all its hotel reviews and travel blogs and destination guides. Also it will open to all online partners, including OTAs, hotels, airlines, et cetera. So Lvping.com will position as a best travel information and community website in China, which will be a good alliance for Ctrip, and also to – for both Ctrip and Lvping.com to work together in the leisure markets in China. James Mitchell – Goldman Sachs: Okay, I guess my concern is that the hotel reviews on Ctrip are a great way of making sure that the Ctrip website scores highly in search results. So if the hotel reviews are now shifted to another website that's an advertising rather than a transactional website, does that mean that your core transactional business won't get as much visibility in Baidu or Google?

Ctrip’s hotel reviews – the Ctrip website will be put by those people who stayed in the hotels, and those hotel reviews will also reflect in Lvping.com’s website. And in the meantime, in Lvping.com, people can also comment on various hotels in Lvping.com maybe they are not stay in the hotels, this will be a little bit different from Ctrip’s websites hotel reviews. And for the volume size, those surfers one day when they reach our Ctrip’s community site they would be – lead to Lvping.com. So for both, Ctrip and Lvping.com, they will enjoy more reviews, I’m sure.

So James, I think to address your question, for the hotels our customer have stayed, both websites are synchronized. So if a customer has made a comment on Ctrip’s website, Lvping.com will automatically be updated as well. In addition, on Lvping.com, the platform also is opened to the other comments. However, we will rank them separately. For example, we will star the people who have stayed with Ctrip. So when readers read these comments, they will know which are the ones from the customers who stayed with these hotels, which are the comments with no experience stay in these hotels, so customers can have a fair judgment as to how objective these comments are. James Mitchell – Goldman Sachs: Okay. So Ctrip itself will have the reviews that are written by people you know for certain have booked at the hotels and stayed at the hotels and then Lvping will have more reviews. I guess my question is whether, since Lvping has more reviews, it will tend to score higher in the search results, and by definition if Lvping scores higher then Ctrip scores lower and then there's less search traffic to Ctrip as a result.

I think both website can cross-reference each other. James Mitchell – Goldman Sachs: Yes, okay. Thank you.

Thank you.

Okay, thanks.

Our next question comes from the line of Ming Zhao with SIG. Please proceed. Ming Zhao – SIG: Hi, thank you. Jane, I still have the question on the Q1 guidance. I understand there's a lower visibility due to the early timing of the Chinese New Year, but I think in the past – in maybe '08 or '07, there was an early Chinese New Year too. So if you compare this year versus those years, your visibility, is that same or is that lower that prevents you or that leads you to guide conservatively on the Q1?

As we discussed Ming, I think there are a couple of reasons why we guided very conservatively. First of all, is the visibility is limited. Secondly, I think there are quite a few uncontrollable events that’s going on. And these items is not totally in our control, that is why we want to be prudent. And thirdly, also, I think Q1 last year had a very high base. So all these factors combined together we wanted to make sure when we give a guidance we are very prudent. Ming Zhao – SIG: Okay. So my second question is on the general, the macro economy in China. So everyone knows that the inflation is very high in China, but it seems that you are not seeing the ASP growing higher. So I wondered why is that. And second – and coupled with that, you say the labor cost is going higher, but you want to manage that. Is that managed through more online transactions or through let's say you remove the – you cut the staffing in your Shanghai call centre, hire more in the Nantong call centre? I just want to hear your strategy there.

First of all, our ASP, I’m sure lots of products and services are improving their prices. But for our business specifically last year, there was a World Expo, so the price was very high. That is why we conservatively forecasted the ASP will be very consistent. Secondly, in terms of the offsetting the impact of the labor cost, I think we will put constant effort to methodically move the transaction online as we always have been doing. Secondly, also, we will improve our efficiency by reengineering some of the business processes as we always do. But online and efficiency are the two focuses that we are doing. And also, I think the offsetting factor can partially offset the impact on the labor cost. We will also absorb some impact for the labor cost in our P&L as well. In fact, we will do our best to keep our business very efficiently. Ming Zhao – SIG: Right, thank you.

Sure, thank you.

Our next question comes from the line of Steve Rubis with Stifel Nicolaus. Please proceed. Steve Rubis – Stifel Nicolaus: Steve Rubis here on behalf of George Askew. Thank you for taking my question. Your 29% air ticket volume growth was almost three times the pace of industry air passenger [inaudible] growth in the quarter. Clearly, you're gaining market share, but are there other factors at work that drove this strong performance, such as a new marketing campaign or something else?

We will provide more service to our customers. We will try to win larger market share via more service providing. And also I think in the years to come, we also will have – we’ll try to provide more efficient promotions on our website and also we will provide more different products to different category of our customers. So in that way, I think we will try to double or even triple the major growth of the industry. Steve Rubis – Stifel Nicolaus: Thank you. I have no further questions.

Thank you.

Thank you.

Our next question comes from the line of Elinor Leung with CLSA. Please proceed. Elinor Leung – CLSA: Hi, thank you for taking my question. My first question is regarding the pricing. It seems that the pricing is pretty resilient in 4Q, but you are guiding that the commission rate per room or per air ticket is going to be the same as first Q 2010, which means that there will be a big drop on a QonQ basis. So does it mean that your rates did decline in the air ticket prices or hotel room prices or in the normalization? My second question is regarding the Chinese New Year. Given a majority 75% of your business do come from business travel, early Chinese New Year should be positive to your business. So have you counted that into your guidance? Thanks.

Sure. Thanks for your question. Just for – in terms of the commission, I think we have seen the commission rates have been stabilizing on a quarter-over-quarter basis. Commission rate is very consistent. If you do it on a year-over-year basis, on a curve, if you take the commission rate and also taking to the price impact, it’s almost on a per room and per tickets basis we’re making almost consistent dollar amount. That is why we guide our revenue mainly based on the volume growth. So that’s the first thing. Secondly, the calendar of the Chinese New Year, whether it’s good for business or bad for business, I think if we add at the end two nights together or three nights together it’s more meaningful. The impact on business should be very consistent from year-over-year. But right now, I think it’s still too early during the quarter for us to see the whole impact of the quarter. Elinor Leung – CLSA: Okay. Thanks.

Thanks.

Our next question comes from the line of Wendy Huang with Royal Bank of Scotland. Please proceed.

Hi, good morning, thanks for taking my question I'm asking on behalf of Wendy Huang. I noticed that for your operating margin guidance you guided down from 45% in the past few quarters to 40%. Could you talk more about what is going into this guidance? Thank you.

Sure, sure. If you look at our operating margin in 2009, it was about 40% to 41%, which was clearly normalized. In 2010, the margin was higher just because the government has put in lot of efforts to promote the World Expo. And we fully leverage all these campaigns, and so we saved some money from these sales and marketing campaigns to achieve a relatively higher margin. So conservatively in 2011, we forecasted that our operating margin to be around 40%, which is very consistent with the normalized years.

Okay so it is – I was just – am I right to assume that it will be sales and marketing which would be the increase, the bulk of the increase?

Yes, sales and marketing – and also we need to put effort in investing future products. So product development also is very important for our business.

Okay. Thank you.

Thanks.

Our next question comes from the line of Fawne Jiang with Brean Murray. Please proceed. Fawne Jiang – Brean Murray : Good morning. My first question is actually regarding your first Q outlook. Jane, you mentioned, what's the Wing On growth assumption for first Q?

We have probably contributing to 5% of our business, because Q1, Q2 is their slowest two quarters for their business. Fawne Jiang – Brean Murray: Yes, got you. So like for first Q your organic growth of outlook is 15% plus 5% from Wing On, right?

Correct. Fawne Jiang – Brean Murray: Okay. What is your outlook for 2011 in general, in terms of organic as well as acquisition?

For 2011, we still have to monitor developments in the markets very carefully. Right now, we are only one month into the year, so we haven't had very good visibility. That is why I think we have to wait a little bit longer to give you official guidance for Q2 and on guidance. Fawne Jiang – Brean Murray: Okay. And my second question is actually regarding your Lvping.com. I just wonder what specific strategies Ctrip will adopt to differentiate from say daodao.com, the subsidiary of TripAdvisor in China?

I think Lvping.com will be competent. In fact, an advantage of other players, we have largest loyal travel user basis, and also Lvping.com has the most hotel reviews and most comprehensive travel rights [inaudible] in China. As you know, before becoming – Ctrip.com becoming independent, those service has been part of Ctrip.com since the day Ctrip was launched. So Lvping.com, will enrich for these features in the future and those features I assume are quite unique which other players are still in their early stage to contract those features. But I think for Lvping.com, it is a part of Ctrip’s strategic plan for next few years, and we will be best positioned in China leisure travel market, and we will try to make it as the most reliable platform for experienced sharing with travel information service. Fawne Jiang – Brean Murray: Yes, thanks Min, that's very helpful. Just a follow-up question on that Lvping.com; what's the revenue opportunity you see in short term and in long term for Ctrip?

I think for short term it’s immaterial. Obviously, when we set it up as a separate we have high expectations for it. But in the near future, I think it’s important for us to establish a viable and a strong website which will become something that what travellers need when they travel with Ctrip. So that’s our for short-term goal. But for long term I think we do have high expectations for this website.

Yes, got you. Last question; actually I have quick housekeeping items. Number one is what's the percentage of your credit card transactions, approximately?

Yes, about 60%, 70%. Fawne Jiang – Brean Murray: Okay. And last question is regarding your other income in fourth quarter. Just wonder what it primarily was, if government subsidies or is there any other items that contribute?

Sure. It’s primarily government and subsidy. Fawne Jiang – Brean Murray: Okay. Yes, that's all my questions. Thanks very much.

Thank you very, Fawne.

I would now like to turn the conference over to Ms. June Zhu for closing remarks.

Thank you everyone for joining us on the call today. A replay of this will be available as usual on IR website shortly after the call is completed. We appreciate your interest in Ctrip and look forward to convening with you again next quarter. Thank you very much.

Thank you.

Bye-bye.

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes your presentation and you may now disconnect. Have a great day.