Good day, ladies and gentlemen and welcome to the Q4 and Full-Year 2011 Ctrip.com International Ltd. Earnings Conference Call. My name is Walter and I will be your operator for today. At this time, all participants are on a listen-only mode. Later we will conduct a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes. I would now like to hand the conference over to your host for today, Investor Relations Manager, Ms. Lin Zhang. Please proceed, Ma’am.

Thanks, Walter. Thank you for attending Ctrip’s fourth quarter and full year 2011 earnings conference call. Joining me on the call today, we have Mr. James Liang, Chairman of the Board; Mr. Min Fan, President and the Chief Executive Officer; Ms. Jane Sun, Chief Financial Officer and Ms. Jenny Woo, Deputy 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 on any obligation to update any forward-looking statements, except as required under applicable law. Min, James and Jane will provide a business update, industry outlook and the financial highlights for the fourth quarter and full year 2011, as well as the outlook for the first quarter of 2012. We will also have a Q&A session toward the end of this call. With that I will turn to Min for our business update.

Thanks Lin, and thank you to everyone for joining us on the call today. Despite our high 2010 comparison base, the Ctrip team delivered solid results in 2011. For the fourth quarter of 2011, our net revenues grew by 18% year-over-year and net income decreased by 16% year-over-year. For the full year of 2011, our net revenue grew by 21% year-over-year and net income grew by 3% year-over-year. We increased our sales marketing investment to further penetrate the leisure market during the fourth quarter, with a continuous focus on delivering the best product was the best service at the best price. We’ve diversified product offerings and elevated customer service to a higher level. The Ctrip team further expanded our hotel supply network to meet growing traveler demand, reaching approximately 25,000 hotels by the end of 2011 compared to 17,000 hotels at the same time in 2010. The number of our hotels with a guaranteed room allotment accounted for over 70% of the total hotel supply. In addition to ongoing efforts to expand our hotel network and enlarge our hotel, our product offerings, we launched our cash rebate e-coupon program for hotel reservations, to stimulate the market from the beginning of the quarter. With precise positioning, the program helped increase customer stickiness and drive incremental bookings by encouraging customers to book online and effectively increases online penetration. Ctrip has always been a pioneer in the travel market. We recently launched our new Smart Choice hotel channel. Ctrip’s customers, especially leisure customers will be able to enjoy great discounts and extraordinary savings without hurting hotels’ pricing system. This new innovation will offer customers a brand new booking experience. Ctrip strategically invested in (inaudible) a hostel booking and review website to explore more opportunities in the leisure travel market. With more hostels headed…

Thanks Min. Although the forecast of China’s economic growth for 2012 is lower than 2011, we have confidence in China’s leadership in economic growth in long run. The increasingly strong Chinese currency, consumers’ buying power and interest in travel is growing significantly. With more relaxed visa restrictions for Chinese travelers, the leisure travel market will see strong growth as we have seen in many countries like Europe, the US and Japan and other countries relaxing visa restrictions to accommodate the increasing number of Chinese travelers. These factors will boost the demand for outbound travel. Now let me turn to Jane for financial update.

Thanks, James. I’m pleased to report the solid results for the fourth quarter and for the full-year of 2011. For the fourth quarter of 2011, net revenues were RMB926 million or US$147 million, representing an 18% increase from the same period in 2010. Net revenues for the fourth quarter of 2011 decreased by 5% from the previous quarter primarily due to seasonality. For the full year ended December 31, 2011, net revenues were RMB3.5 billion or US$556 million representing a 21% increase from 2010. In 2011, Wing On Travel and ezTravel contributed 1% for the year-on-year growth for the net revenues. Hotel revenue amounted to RMB400 million for the fourth quarter of 2011, representing an 11% increase year-on-year primarily driven by an increase in hotel reservation volume year-on-year. Hotel reservation revenue decreased 3% quarter-on-quarter. For the full year ended December 31, 2011, hotel reservation revenues were RMB1.5 billion or US$236 million representing a 16% increase from 2010. The hotel reservation revenues accounted for 40% of the total revenues in 2011 compared to 42% in 2010. Air ticket booking revenues for the fourth quarter of 2011 were RMB378 million or US$60 million, representing an increase of 18% year-on-year primarily driven by an increase in air ticketing sales volume. Air ticket booking revenues decreased to 2% quarter-on-quarter. For the full year ended December 31, 2011, air ticket booking revenue were RMB1.4 billion or US$228 million, representing a 19% increase from 2010. The air ticket booking revenues accounted for 39% of the total revenues in 2011 and it remained consistent with that in 2010. Packaged tour revenue for the fourth quarter of 2011 were RMB130 million or US$21 million, representing a 29% increase year-on-year due to the increase of leisure travel volume. Package tour revenue decreased 24% quarter-on-quarter primarily due to the seasonality.…

Ladies and gentlemen, (Operator Instructions) Your first question comes from the line of Richard Ji with Morgan Stanley. Please proceed. Richard Ji – Morgan Stanley: Thank you. Min, James, Jane, and Jenny good morning. Thank you for taking my call.

Good morning.

Sure. Richard Ji – Morgan Stanley: Let me start with a first question regarding your coupon program. And so far can you comment on the feedback from your customers regarding your coupon program and also have you seen your company gaining traction at the expense of your competitor and should we expect hotel revenue to reaccelerate and going forward?

For our coupon program, I think we launched the last quarter and as you know Ctrip is the largest OTA in China. We are entitled the best price policy. If someone starts any additional marketing which diverts the market to compete on prices, we have to match the offerings and (inaudible) of products necessarily. I think since the launch of the coupon program last quarter, we do see the positive feedback from market and I think Ctrip’s coupon program works our expectations so far. It was one of our strategies to penetrate the long-term market and also as you know we encourage our clients to redeem their coupons online, so it will also encourage customers to book online. We expect the coupon program takes 2 to 3 quarters to show the effect on volume. Of course, we will monitor and evaluate the market carefully and we will see the future response. Richard Ji – Morgan Stanley: Thank you. Hello? The follow up question is regarding your margin trend and obviously and due to the rising labor cost and also this marketing initiative and we are seeing some margin pressure near term, when should we expect this margin to normalize? And can you also comment on your internal cost-saving measures and particularly and given that you are expanding aggressively online and can you also shed some color on the margin profile and for online transactions given it tends to be more scalable longer term? Thank you.

Sure, we believe 2012 is the year for Ctrip to make certain investment. For every dollar we spend into the marketing, into the product development, we carefully measured the investment to return. However in order to compete effectively with all the other players, we have to make further investment in sales and marketing as well as the product development areas. So for 2012, we expect our operating margin before stock compensation is about 30% for the full year. For Q1 because, it’s the slower season than the other quarters, the operating margin before stock compensation is about 27% to 28%. The decrease in the margin is mainly due to two areas. The first one is about 5% is due to the people related cost across the line. The second one is the sales and marketing, specifically very much driven by the coupon program and to add to Fan’s comments earlier, we do see some pickup on the volume in hotel revenue. And in the future quarters, we intend to keep up with the efforts we have made on our coupon program to make sure we further gain market share in the competitive landscape. So that’s the margin. In terms of the cost saving, again I think Ctrip internally is a very disciplined company. We use all kinds of measurement to control our cost and measure our efficiency. We use Six Sigma to measure every almost key business processes. So we will keep up with the efficiency we can control internally and save these money to further invest in our marketing efforts. Richard Ji – Morgan Stanley: Okay, thank you.

Thanks.

Your next question comes from the line of Alex Yao with Deutsche Bank. Please proceed. Alex Yao – Deutsche Bank: Hi, good morning everyone and thank you very much for taking my question.

Good morning. Alex Yao – Deutsche Bank: My first question is how do you evaluate the competitive landscape in the leisure travel market, specifically in the mid to low end leisure travel market. And also what will Ctrip do to drive the growth in this area? Thank you.

I think right now in China the online leisure market is quite fragmented and Ctrip is definitely the leading company on this field and as you know we are the biggest single venue for supply for both hotel reservations.

Is that the end of this?

Pardon? Yes, and we are in the best position to provide leisure products online for our targeted customers. And I think right now for the competition landscape, although there are some small player in the field, Ctrip is definite nationwide one-stop solution platform and we do see from last year to now, our leisure business is growing healthily and with this momentum, I think we still keep the leading position in the market. Alex Yao – Deutsche Bank: Thank you. Secondly can you help us understand the margin deterioration in fourth quarter? So operating margin went down by 4 percentage points and gross margins is down 1%, product development 2%, sales 2%, and to what extent is the margin decline due to the coupon program and to what if then is due to actual investment and also the labor cost increase? Thank you.

Sure. If we compare Q3 versus Q4, margin decreased from Q3’s 41% to 35%, which is about 6% decrease. Included in the 6%, I think 2% is related to sales and marketing, 1.5% of this 2% is the coupon program. And the rest is mainly for the head count related costs across the line. Alex Yao – Deutsche Bank: Got it. Thank you.

Sure, thank you.

Your next question comes from the line of Chen-Yi Lu with Cowen & Company. Please proceed. Chen-Yi Lu – Cowen & Company: Thank you. I have two quick questions. First question, can you give me the breakdown, the gross margin breakdown by each product segment? And then my second question, when I (inaudible) come out with the second question.

Okay. The gross margin is still within the range. For hotel business, it’s about 85% to 90%. For air tickets, it’s 65% to 70% and leisure travel package is in between, so 70% to 80%. And may I ask you to repeat the second question again? Chen-Yi Lu – Cowen & Company: Not yet. So again the question is, for this cash coupon, right, does that hit the cost of goods, or I think it hits the net revenue, right. So that impacts the gross margin, right?

Sure. If the coupon is cash rebate or if it is to redeem our existing products, then it’s account to revenue, net against the net revenue. But if it is a small gift for example, lamp or a small item, a luggage, then it’s classified as sales and marketing cost. So it’s in both lines. The ratio is about 2:1, 2 is in the cost, 1 is in the sales and the marketing. Chen-Yi Lu – Cowen & Company: Okay, great. My next question regarding the hotel revenue. This year, this quarter, the hotel revenue grow about 11% year-over-year in renminbi term, this is low. So can you give us a view in terms of hotel reservation business in 2012? That would be great. Thank you.

Sure. Let me start with Q1 first for each line of business. For the full year, we probably have to wait a little bit longer. When we have better visibility, we’ll give a full year top line break for you. For Q1, hotel revenue has three elements. For volume growth, it’s going to be 25% to 30% which accelerates from the previous year partially due to the program. Price is flat and commission rate is about 5% down. Again, it’s because of the counter revenue derived by the coupon program. So the total net revenue for hotel is going to be 20% to 25% up on the year-over-year basis. For air ticket, volume growth is expected to be 15% to 20%. Price is expected to be down 10% and the commission rate is flat. So that gives us a revenue increase of 5% to 10% increase year-over-year. And package tour is 25% to 35%, corporate travel, 5% to 10%, which if you aggregate everything, that gives us about 15% to 20% year-over-year growth Q1 revenue. Chen-Yi Lu – Cowen & Company: Great. Thank you.

Sure. Thanks

Your next question comes from the line of Catherine Leung with Goldman Sachs. Please proceed. Catherine Leung – Goldman Sachs: Hi, good morning. I was wondering if you can help us understand how you determine the reasonable returns for your customer acquisition costs, in particular for the hotel coupons, I think you increased the level of rebates in December from October. Have you seen a proportional acceleration in your hotel revenue growth since? And the follow up is if you can disclose how much of your sales and marketing cost growth was from advertising costs versus head count? Thank you.

Sure. Customer acquisition costs, regular customer acquisition costs remain very consistent. Couponing is on top of it. The growth rate, although we just started in Q4, we already seeing the pickup in low end hotels. That is why in Q1, the volume growth reaccelerated to about 20% to 25%. So we intend to keep up with the coupon program to match any pet campaign in the market to make sure that the pricing everyone is the same. So everyone will come back to compete on product and service. So that’s our game plan. Catherine, did you have the second question? Catherine Leung – Goldman Sachs: Yes, yes, the second question is if you can disclose how much of your sales and marketing costs was related to advertising versus head count cost increase?

Oh, sure. The head count increase for this quarter in terms of a percentage is about 0.5%. The rest is all coupon related or channel, sales and marketing channel increase. Catherine Leung – Goldman Sachs: Okay, great. Thank you.

Sure.

Your next question comes from the line of Eddie Leung with Merrill Lynch. Please proceed. Eddie Leung – Merrill Lynch: Good morning guys, thank you for taking my questions. The first question is related to your fourth quarter pricing trend. Just to follow up on your guidance in the first quarter, could you also share with us the pricing trend of your hotel and ticketing business in the fourth quarter as well as the commission rates. And then secondly, we have seen quite an increase in advances from customers in the fourth quarter sequentially. So could you also comment on that one as well? Thank you.

Sure, for the fourth quarter all the revenues are mainly driven by the volume. We see price and commission remains very consistent from previous quarter and previous year. For custom acquisition, yes I think we increased our sales and marketing efforts. The customer acquisition is increasing very significantly and we intend to keep up with our efforts. Eddie Leung – Merrill Lynch: Thank you.

Thanks.

Your next question comes from the line of Mike Olson with Piper Jaffray. Please proceed. Mike Olson – Piper Jaffray: Hey good morning. I just had one quick question. You talked about difficult comparisons that you experienced in 2011, but your guidance for Q1 revenue growth of 15% to 20% doesn’t necessarily suggest that we’ll see an acceleration versus the growth rates that we were seeing in 2011. Do you expect growth? I understand you’re going to be spending more and the margins are going to be impacted but just on the revenue growth side, do you expect revenue growth later in 2012 will be higher than what your outlook for Q1 suggests?

Obviously, I think with all the marketing efforts we have put in, we will go very aggressive on the top line. However, in the first quarter of last year, I believe we still grow at a very high rate, more than 30% year-over-year. So the base for Q1 was still very high and normally for Q1 travel season is relatively lower. So hopefully with all the marketing efforts we have put in, we will give 100% efforts to generate as good a number as we can going forward. Mike Olson – Piper Jaffray: Okay. Thanks very much.

Thanks.

Your next question comes from the line of Alicia Yap with Barclays Capital. Please proceed. Alicia Yap – Barclays Capital: Hi, good morning, thanks for taking my questions. My question is related to, can you actually help us to have a little bit more color that when should we start to see the benefit of your step up investment in the R&D and sales and marketing to start contribute to the top line growth? In other words, when can we expect the top line growth to grow faster than the operating expenses?

Yes, this year I think we increased our investment in both sales and marketing and product development. So for the new product that we believe which has a potential to explode in the future, this year we increased our investment. Normally it takes one to two years for business lines to become short and generate fruit for us. So hopefully, after one year or two, we should see this product becomes more mature and generating more revenue. Alicia Yap – Barclays Capital: I see, and my follow-up question is regarding your new office in Chengdu. Can you explain a little bit more, is that for the call center or it’s just for the regional sales? And your total head count that you plan to increase by year-end 2012. Thanks.

I think that the new office building in Chengdu will be used as the regional office for southern and western China. As you know in China right now, the economic growth and also the market is very strong in that part of China and this new office building will be served as the operations center in western China. I think Ctrip will further penetrate market over there and fully utilize these variable resource by setting up a regional operations center in Chengdu and I think in the near future we will see we will get more and more market share. And also that part of China is growing very fast and also with a very large population, and also quite some top travel resources among that region. So we definitely also we will see that part of the new office setup will also enhance our leisure product development in that region. Alicia Yap – Barclays Capital: Can I actually follow up? So when is the office expected to be completed and your head count for your year-end 2012?

One and half year, expecting one and a half year to be completed. Alicia Yap – Barclays Capital: Okay. Thank you.

Thank you.

Your next question comes from the line of Wendy Huang with RBS. Please proceed. Wendy Huang – RBS: Thanks. My first question is I want to get more clarification on the Q1 guidance. You mentioned that the hotel commission rate will be down 5% due to the coupon program, but my understanding is that most of the coupon costs will go to the cost of sales and also the research marketing costs. Why it is still affecting the commission rate? And also you said the corporate travel will only grow 5% to 10% year-over-year. Given that there is still great potential for the corporate travel business in China, why your growths were slowed down so dramatically?

Sure. The first question is the coupon. Coupon is recorded as counter revenue instead of cost of goods sold. So it’s in the counter revenue which also impacts the gross margin and when you try to break it out, it’s not volume related or price related. So it is mainly treated as a commission related item. That’s why commission rate will show about 5% decrease. On corporate travel, corporate travel clients normally give us air ticketing business. So when we look at our forecast, whatever air ticketing business can grow is mainly going to be similar growth trend for corporate travel. Volume growth has still outpaced the market quite a lot. The market is only about 5%, below 10% but the volume growth is for Ctrip is about 15% to 20% growth. However, we saw in the first quarter due to the slower season, price is down about 10%. That’s why if you add these two factors together, we see about 5% to 10% increase in overall revenue for air ticket and also corporate travel. Wendy Huang – RBS: Thank you. My second question is regarding your strategic investments in the hostel booking and review website. I checked that website, it seems that that website is still under construction. So why are you investing in a new website? Why don’t you just establish a new website yourself?

You mean the (inaudible) website? Wendy Huang – RBS: Yes.

This website I think is just a launch and right now the, cover quite some areas and also this website will mainly provide those, like those (inaudible) similar like the hostels, high hotel accommodations. And I think the team of (inaudible), they are still working with the different partners and try to provide more and more products offerings in their website. And also I think in for the whole markets still need a little bit time to, even you can say this to educate the market to let more to welcome more and more property partners and also can more exposure among the target customers. Wendy Huang – RBS: Do you mind share the amount of investments in this website?

The total investment so far is not significant. We intend to increase – there are lots of new investments we’re making for this year. So the total for this specific project though is not material. Wendy Huang – RBS: And also I noticed that Ctrip made an investment or strategic alliance with hotel, sorry with the holiday housing leasing website (inaudible) as well. So can you help me to understand your future investment priorities and why are you spending money here and there to invest in some newly established business instead of using your internal resources to start these websites or business?

I think as you know, Ctrip is a one-stop booking platform in China and probably three or five years ago most our people would have used Ctrip mainly as the business travelers website, but as you know we are working very hard. During these years, we tried to provide more and more leisure products and to acquire more leisure market share. And also we should say, all these business travelers, they are leisure product users as well. So we want to provide more product coverage, not only for those businesses hotel styles products, but also the more leisure oriented products coverage. So start from last year we will invest to like the (inaudible) model and (inaudible) model. They are also quite similar to that hotel model abroad and also the if you view (inaudible) which is a kind of mixture, home away and B&B. So I think those products, they have very good potential in the near future. So as we can see those investments, they are very well connected with our core business and also those investments will definitely will enrich our product providing and also to increase the, enhance the stickiness of our customer. So I think although right now those investments are not so significant and also right now those financial, the trends so far is not so significant, but in the near future we do see that there is a very good potential to be very good complementary combined product providing in our revenue model. Wendy Huang – RBS: Thank you.

Thank you.

Thanks.

Your next question comes from the line of Andy Yeung. Please proceed.

Hi, good morning. Thank you for taking my questions. In terms of your customer channel, can you give us some breakdown for your customer completing the transaction through your website today, and also through your call centers and your mobile apps.

Sure. The website is exceeding 45%, including mobile. At the mobile, it’s still very small and about 55% on average is conducted online.

Great, just one follow-up on that, you have spent on your ramp up your investments in R&D for 2011’s and the trend seems to be continuing in 2012. Can you give us some insight into your priority for 2012, in particular in which areas you are focused, is that mobile, train, or the new (inaudible) offering?

Sure, you are right, I think the investment in new business development is still kept on which is going to be fruitful for us in the next two years. The main area are the areas which we have already seen the potential in the market. Obviously 3G is a very important area and anything that is complementary to our core business is very important. The ones our CEO just talked about, (inaudible) is very important. Anything related to our hotel, air ticketing, that’s very important. Also anything that increase our product offering such as our train product is important to us as well. And also the travel writing, the travel journal, lvping.com is also another site. So the whole focus for our new business development is travel related sites that make our product stronger, make our offering more comprehensive. So that’s the focus for our investment.

Great. Thank you.

Sure. Thanks.

Your next question comes from the line of Elinor Leung with CLSA. Please proceed. Elinor Leung – CLSA: Hi. Thanks for the call and I have a follow up question. I want to know, what is the percentage of hotel that you’re offering right now entitled to discount under the coupon promotion and what percentage of your user are using those this discount at the moment? And what do you think the long term, the trends with this year, what percentage these numbers can reach by the end of the year?

Sure. I think for the coupon program, all the customers that are Ctrip customers are entitled to use the coupon. However, if there are five star hotel users, normally the conversion rate is lower. If say most of the customers are staying at economic hotels, then the conversion rate is higher. So yes, coupon so far looks like tailored more for price sensitive customers. Elinor Leung – CLSA: Sorry, do we have a conversion rate percentage?

Different rate is – different customers is different. Elinor Leung – CLSA: Okay. And that percentage of your hotels are entitled to these discounts?

I think the hotel, we probably don’t calculate it by percentage. It’s very market driven. So whatever in the market as our players have coupon program will match instantly. Elinor Leung – CLSA: Okay. Thank you.

Sure. Thanks.

Your next question comes from the line of Ming Zhao with SIG. Please proceed. Chun Zhao – SIG: Thank you. Good morning.

Good morning. Chun Zhao – SIG: So two questions here. So first, actually congratulations to Jenny on getting on board. My first question is on the management. So given all the competitions out there, is there any change to the management role? Jane, are you more focusing on the operations? We also hear that James has finished something on the academic side. Is James more, going to be more active in strategy in operations of the company? My second question is a housekeeping question. So we look at the advance from customers had a big jump at the end of the quarter. What’s the reason behind that? Thank you.

Sure. I think our company focus has always been run a very efficient operation. The travel business is growing very fast. So whether we, James spend more time in operation or we recruit Jenny to strengthen our company. That’s a reflection of how our team are very much focused in recruiting good candidates to strengthen our team and also bring all the talent to the management team. So yes, I think all four of us will spend a lot of time on both operations as well as keep up with good communication with investment community. So we’re very determined to do that. Second question, Ming, do you mind to repeating it? Chun Zhao – SIG: Yes, if we look at the balance sheet, the advance from customers had a big jump at the end of the quarter. I guess that’s related to the package tour business,

Correct. Chun Zhao – SIG: But just want to hear from you anything behind that.

Sure. The advance from customers is mainly related to the Chinese New Year. So it has a major increase in the year and it also has something to do with the timing, depending on when we receive the cash and when we pay the customer take the tour, so that’s the reason for the increase. Chun Zhao – SIG: So just a clarification on that. The coupon program really does not hurt the package tour business right, it’s only for the hotel business.

Correct, correct. I think coupon program is very much a response to the market condition, so the hotel is the only area coupon is applicable. Chun Zhao – SIG: Okay, thank you.

Sure, thanks.

Your next question comes from the line of Ida Yu with CICC. Please proceed. Ida Yu – CICC: Hi good morning, thank you for taking my questions. Just a quick question about the product development and the S&MS, sales and marketing expenses. So in Q4, we see a growth of these two items in a year-over-year growth and also as a percentage of the total revenue. So can you give us a guidance about say how those two items are going forward in coming quarters? Thanks.

Sure. In the coming quarter, we expect the people related costs, mainly in product development to increase about 4% and then the other is sales and marketing related cost. So, margin guidance in Q1 dropped from 35% to about 28% which is 7% drop, mainly due to 4% in product development and the rest in sales and marketing related activities. Ida Yu – CICC: Okay. Thank you.

Sure thanks.

Your next question comes from the line of Aaron Kessler with Raymond James. Please proceed. Aaron Kessler – Raymond James: Good morning. First on the hotel performance for Q4, I believe you reported about 11%. I think guidance was 15% to 20%. So just if you can clarify maybe what the impact of the coupon was, because I think you’d originally said it’s was COGS I guess, but now it’s contra revenues. So just maybe the impact of coupons on the Q4. And then also, how do hotels feel about the couponing program because you might be actually be pricing below the hotel rate and the US has gone more to pricing parity. So just curious what the hotel reaction has been to the coupon program as well, thank you.

Sure. First of all, I think for the hotel side they are not impacted at all. The price is still the same. What we do is for every bookings the customer make, they will be entitled for coupon which they can apply for the next stay and to deduct their payment. So hotel is not impacted. It’s just between Ctrip and the consumers. The second one is the, for Q4 hotel revenue grow more than 10%. For Q1 guidance, we guide hotel volume to accelerate to be 25% to 30% which will be offset partially by commission rate of 5%. If you add these two elements together, then the hotel revenue growth will be around 20% to 25% for Q1. Aaron Kessler – Raymond James: Can you just clarify for Q4, I guess for Q4 what the impact of the coupons was on Q4 revenues growth?

Very minor, because we started the coupon program during the latter part of the quarter. So very minor. Aaron Kessler – Raymond James: Great, and do you say 2012 operating margin is at about 30%, was that just to clarify?

30% before stock compensation. You’re correct. Aaron Kessler – Raymond James: Okay, great. Thank you.

Thanks.

Your next question comes from the line of Long Lin with Brean Murray. Please proceed. Long Lin – Brean Murray: Hi, good morning. Thank you for taking my question. I have a follow up on the coupon program. So what kind of duration are you looking at now for the coupon program? Also like you mentioned that the coupon program has increased your online penetration. What is your online penetration as of 4Q? Thank you.

Yes, the coupon program again is very much in line with the other coupons by the other players. So whatever we see in the market, we’ll match to it. Online yes, because coupon is only applicable for online bookings, so yes, it increased the coupon online percentage. Long Lin – Brean Murray: So what is your online penetration as of 4Q?

Average right now is 45%. Hotel is a little bit higher. Long Lin – Brean Murray: Okay, thank you. My second question is regarding group buying program. Like how many hotels right now participate in your growth buying program for the fourth quarter? And can you provide some useful metrics on the group buying such as average ADR or commission rate? Thank you.

Yes, we have around hundreds and 1,000, around 1,000 hotels. So where is the group buying model website and we do see this group buy model, group buying model is quite welcome among those low-end customers as well as the very price-sensitive customers. But so for the total production is still very small compared with our total hotel production in terms of load night. But we think it’s a value add channel for Ctrip to offer this product to help our customer to find more suitable products and as well as to help our hotel partners to get incremental margins. I think this is a supplemental product to address the needs in the market. But as we can see, group buying module is still not a mainstream product in the hotel business. We view this as a supplemental channel to take for our customer needs. Long Lin – Brean Murray: Okay thank you.

Thank you. Long Lin – Brean Murray: So what kind of growth do you see on the group buying from last quarter?

This is really material, I think in line with our growth. Long Lin – Brean Murray: Thank you very much.

Okay, thanks.

There are no further questions at this time. I would like to turn the conference back over to Ms. Lin Zhang for closing remarks. Please proceed.

Thank you everyone for joining us on the call today. A replay of the call will be available as usual on the IR website shortly 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.

Ladies and gentlemen, that concludes today’s conference. Thank you for your participation. You may now disconnect and have a great day.