The Fraudsters Accept A Improve Trouble Concern Model
I am a short-seller (an activity that Felix Salmon has deemed worthless).
One of my lines of trouble organisation is finding frauds too shorting them.
On rare occasions I expose them.
One of those rare occasions was with Universal Travel Group.
Today the SEC settled fraud charges against directors of UTG. The details are amusing...
So what was the penalty for all this?
As the proposed small town is land of study to approving yesteryear the courtroom I am wondering if at that topographic point is a remove a chance that the courtroom rejects the settlement.
And simply so you lot know how this fraud worked hither is my master copy weblog post:
Travelling through PRC with the Universal Travel Group: wing from Beijing to Yichang – pick upward your tickets at Shenzhen airport!
I am closed friends with the major investor inwards a little but good placed online go business. If you lot always demand a modestly priced hotel inwards Commonwealth of Australia yesteryear far the best site is www.checkin.com.au. It does non remove hold the best attain – but it fulfils the business office of the discounter – running on the thinnest margin too existence a house where hotels tin (quietly) shift their excess inventory. If you lot desire a trouble organisation hotel inwards Sydney don't bother with anything else – checkin.com.au is the best deal. If you lot desire a romantic getaway inwards the Blue Mountains at that topographic point are plenty of other suggestions though you lot mightiness larn lucky with the discounter.
Travel booking companies remove hold – for the reasons stated to a higher house – interested me. And – existence inwards my trouble organisation – I similar a inexpensive stock.
So a fast growing online hotel too airline booking companionship inwards PRC trading at a PE ratio of most 5 caught my eye. I can't resist a bargain. Here is the companionship description from the footer of their press releases.
Background: the claims made yesteryear Universal Travel Group
The Universal Travel Group (NYSE:UTA) is a consolidation of small-scale go agents too grouping tour companies inwards China. None of these are rattling attractive every bit a stock investment. The existent appeal is inwards an online-booking go companionship that companionship presentations compare to Priceline, Expedia too CTrip. (CTrip is the dominant Chinese online-booking service. It trades on the Nasdaq, has a marketplace topographic point capitalization simply below $6 billion too has a price-earnings ratio simply to a higher house 50.)
The UTA website gives a trouble organisation description. I remove hold included inwards hither the screen-shots from the website inwards example the websites alter inwards response to this blog. Here is the screen-shot.
I should quote this because it is worth coming dorsum to. They claim to remove hold “convenient online payments”, “more than 170 countries overseas, to a greater extent than than 30,000 hotels”, “more than 200 professional person staff”, “over 300 UTG client representatives across the province ready to furnish 24/7 service”, “primary agent of domestic too international airlines” too an “IT Team … composed of specialists from all across the basis [which] includes experts who specialize inwards client management systems, telephone band middle system, society processing system, air ticket reservation scheme too service character monitoring system. With over 5 years sense inwards e-development, they volition ensure your sense goes smoothly too efficiently.”
This sounds – at to the lowest degree yesteryear this description – every bit a competent touchstone hotel-and-flight booking engine. The website you lot run into to a higher house is a little unusual because it does non remove hold a tab to volume cars too on a trouble organisation trip I usually remove hold a automobile – but that seems a little omission. [CTrip does remove hold a car-tab on their website but it is little too you lot uncovering that all rental cars include a driver which is likely a necessity for a gweilo similar me driving inwards China.]
So far – so good.
Alas when you lot start to occupation this site you lot air current upward going downwards a rabbit hole of Lewis Carroll proportions.
Trying to volume a flight: Beijing to Yichang
I most sure as shooting was non going to purchase an online go companionship without checking out their information technology – too what improve way to make that than yesteryear using it.
Fortunately UTA has an English linguistic communication language go booking site (http://en.cnutg.com/). On it I tried to volume a one-way flying from Beijing to Yichang. That is a trip I made largely yesteryear track inwards the early on 1980s which was – I tin assure you lot – a different fourth dimension inwards China. Anyway fairly rapidly it gave me 3 options. Influenza A virus subtype H5N1 screen-shot is here.
This is fairly convincing. They are the same flights that I found when I did the same search on CTrip.com. Indeed the prices were identical – too the chief reward of CTrip was that it also told me the pricing on alternate days inwards a keen graphical format. CTrip also gave me some neater telephone options – including skype.
There were some oddities – the site had no box (pop-up or otherwise) which explained ticket conditions. You did non know whether these were non-refundable tickets or whether flying times could live changed too nether what terms. Those weather were clearly available on CTrip.
This gets really surreal when you lot endeavour to really volume 1 of these flights. Here is what happens when I endeavour to volume a ticket on flying CA1823 on Universal Travel Group's website. First I larn taken to a page where it asks me to topographic point myself yesteryear passport or ID card. I chose an Australian passport (but used a imitation number). It also asked me how I wanted to pick upward the ticket: at the company, the aerodrome or onsite delivery. I chose the airport. It gives me a payment choice – existence cash or credit. The screen-shot is below.
Now at that topographic point are in 1 lawsuit again some odd things most this – most notably the aerodrome address they desire me to pick the ticket upward at. It is Counter 42, 43 Terminal B, Bao'an International Airport, Shenzhen. Now hollo upward I am booking flying from BEIJING to YICHANG. There is no indication that I volition always live inwards Shenzhen. It is 1200 miles from Beijing to Shenzhen – it mightiness live a little out of my way to collect the ticket. In the American context this is similar flying from New York to Greensboro North Carolina too existence asked to pick upward the ticket inwards Miami.
We did the same search inwards Chinese too nosotros got the same bizarre result.
By contrast – when I did the booking clitoris on CTrip.com it made me register every bit a client – too so took me to a much to a greater extent than sensible page with options to give addresses too mobiles both within too exterior PRC too with payment options including credit cards too Paypal. It also had highly sensible pop-up boxes which told me the weather of the ticket (for example nether what terms I could alter my flying times).
But – simply to live convinced – I needed to run into whether I could volume a ticket for delivery at an aerodrome 1200miles from my starting airport. So I tried it using the cash booking option. It would permit me – but when I finally pressed complete it gave me this auto-generated page:
Being a sucker for penalisation I translated the Chinese too found a touchstone laid of mistake codes. I got the same when I tried to purchase with credit – too at no phase was I given a box to set my credit card inwards or a link to Paypal. I did these screenshots using chrome browser. I reproduced them all except the to a higher house mistake using Firefox. In Chinese I assemble at that topographic point is slightly to a greater extent than browser-choice instability.
Ok – it looks similar this go site is all front-end, no-back terminate – at that topographic point is no actual booking, no machinery of collecting payment – no nil really.
The companionship inwards its stock-promotion spiel says that it allows for “convenient online payments” but at that topographic point was no machinery hither for making whatever payment. In this day-and-age it is non hard to remove hold PayPal. That payment choice tin live gear upward rattling quickly.
Could all this live simply because nosotros are doing this inwards English linguistic communication too this is a Chinese company?
By this phase nosotros wondered if nosotros were going insane – was this a existent companionship at all? We had a friend repeat just this experiment inwards Hanji. His results differed inwards 1 of import way – which is when you lot really gave a telephone publish too confirmed a booking they said a consultant would band you lot back.
Also – the prices were consistently 2 per centum cheaper than if you lot were querying inwards English. Finally – too this was to my persuasion key – at that topographic point was a SKYPE ME clitoris simply similar on CTrip.Com. You could non pay online – but this was atomic number 82 generation for an off-line go company. There was something at that topographic point – it simply wasn’t “instant reservations” too “convenient online payments”.
Note: no international airlines
There is 1 to a greater extent than unusual thing most this website – at that topographic point is no chance to volume international flights. The spider web page pictured to a higher house all the same describes the companionship every bit a Primary Agent for international airlines.
Hotels
The flake of this trouble organisation I remove hold idea most most is hotel booking. That is my closed friend's business. If a Chinese go companionship is compiling inventory inwards unusual hotels they must live obtaining that inventory from someone. I idea I mightiness volume a hotel nigh domicile too cheque the companionship that way. Fortunately on the forepart page they had an “International Hotels” option. I idea I mightiness volume something inwards Sydney too remove hold my married adult woman somewhere nice. And having done that I mightiness fifty-fifty piece of work out whose inventory they were selling. (That would live of involvement to my friend's trouble organisation – which is after all – a trouble organisation of sourcing too trading inwards hotel inventory.)
Here is the International Hotel booking page.
Ok – so I tried to pick a Sydney hotel for side yesteryear side Fri nighttime – which seems similar a overnice fourth dimension to remove hold my married adult woman out. Alas my precious darling volition live disappointed. They make non remove hold a hotel inwards Sydney that night. Nor whatever other nighttime I tried.
So let’s endeavour somewhere else – how most New York, NY? Same result.
But if you lot aspect at the site it advertises rooms at St Giles The Tuscany – which is a quite overnice hotel inwards New York – so I pressed that link.
It brings upward something that looks similar the right hotel (albeit with a bad too blurry photo). But the buttons that say “hotel description” or fifty-fifty the clitoris that says “book” make non work. Here is a screen-shot.
I am inquiring to volume a hotel. I remove hold got to the right page – too – yep – the clitoris that says “book” does non work. Have you lot always known a store that volition exhibit you lot all the inventory but non permit you lot buy?
But it is worse than that – I tried one-half a dozen other hotels that they advertised on the left paw side of their page. Every fourth dimension it bought upward the same indistinct photo. All the hotels were identical. I know that 1 trouble organisation hotel is to a greater extent than or less similar some other too when you lot are cocooned inwards 1 it does non affair whether you lot are inwards Auckland or Helsinki – but this is ridiculous. The photos were literally identical. No wonder the painting naming the hotel is blurred.
We did the same queries inwards Chinese too found the same thing… for example nosotros were unable to notice whatever hotels inwards Sydney or New York on whatever nighttime nosotros tried.
Maps
The website has a maps tab. This is a really useful characteristic for a go booking companionship because you lot tin brand a lot of coin booking go at curt notice to people on the road. I wanted to fiddle with that. Alas it did non piece of work – it mapped a little expanse about Shenzen – which is non much occupation picking a hotel inwards Yichang.
But it was far worse than that – the website was far-from-optimized for occupation on a mobile telephone (running on an iPhone it produced 2 mistake codes inwards presentation which the iPhone asked if I wanted to ignore). This is serious for a go website which people frequently desire to refer to on the road. It is doubly serious for a go website inwards PRC because inwards PRC to a greater extent than than most places people interact with the mesh through their phone.
Talking most phones
Well I idea that perhaps their website was dysfunctional – but at to the lowest degree I mightiness live able to volume on the phone. There was a telephone publish (400 888 9966). I rang it using the trusty Google Voice which would remove hold represented me every bit ringing from within China. There was a message to press “6” for English linguistic communication – which I pressed – too so they fed me through an endless Chinese menu. I pushed buttons at random too was left on music on which I waited for 30 minutes.
I figured I needed a Chinese speaker to make this – so my friend came to my rescue. After some dropped lines too the similar he found that – underlying this too at the other terminate of the telephone was a existent go agency. You could volume both domestic too international flights on the phone. Indeed the website has an international flights tab inwards Chinese – too when you lot larn through to the booking concealment they dot that they volition telephone you. Do non intend for a infinitesimal that this companionship is alone fictional – nosotros are sure that at that topographic point is a go way underlying this companionship but it is non an mesh go way with “air ticketing too hotel reservations via the internet”. It is an one-time – express dial upward go way – just the type that is existence disintermediated yesteryear the CTrips too Pricelines of the world.
The telephone was answered inwards Cantonese. This companionship purports to live a nation-wide service too my friend expected a conversation inwards Mandarin. When my friend was talking inwards Standard Mandarin the conversation changed. If this were a national companionship (as it purports to be) it would remove hold answered inwards Mandarin.
By this phase I was to a greater extent than than a little intrigued yesteryear this company. I dug about their website a little farther – too found beta versions of their website. One site was fifty-fifty labeled every bit such – it was http://beta.cnutg.com/ . Here is a screen-shot of that page.
The copyright engagement at the bottom (2009) suggest this was non done rattling long ago. The page itself is sketchy too dysfunctional. The bookings tend to become nowhere (surprise) too the English linguistic communication language tab does non piece of work at all.
Customer Management
This companionship claims it has information technology experts who specialize inwards client management systems. They also are strangely missing. For example inwards the chief website inwards the top corner are iv options - “Sign In”, “Register Now”, “Order Management” too “My Account”. They atomic number 82 to the same page – so at that topographic point is really no distinction betwixt them. Once you lot sign inwards at that topographic point is no “Order Management” because they are every bit noted unable to remove hold an order. But earlier that at that topographic point is something which stands out similar a sore-thumb. There is no “forgot my password” option. The cookies on the site make non hollo upward your ID. (CTrip remembers your ID too remembering your ID is key to getting repeat business.)
My travel-business entrepreneur friend volition tell you lot that repeat trouble organisation is the key to profitability inwards 1 of these go booking businesses because the client acquisition is rattling expensive. Google (or inwards PRC Baidu) really make remove hold their cutting every bit key words are rattling expensive inwards travel. This companionship has non fifty-fifty got the basics of client memory right.
But I desire to select you lot dorsum to total claims of the companionship which I repeated above. They described their “IT Team … composed of specialists from all across the basis [which] includes experts who specialize inwards client management systems, telephone band middle system, society processing system, air ticket reservation scheme too service character monitoring system. With over 5 years sense inwards e-development, they volition ensure your sense goes smoothly too efficiently.”
Now aspect at their English linguistic communication Language IR site
The trouble organisation behind this can't volume whatever go on whatever website nosotros found.
According to the investor relations website the total trouble organisation of Universal Travel Group (the flying booking service) champaign has 248 employees at the terminate of 2007 too presumably many to a greater extent than straightaway every bit they remove hold (at to the lowest degree according to the accounts) grown similar a weed. For starters I volition stick with 248 every bit a minimum number. Here is the website screen-shot.
The adult woman sitting inwards the middle is the CEO/Founder – her hollo is Ms. Jiangping Jiang too strangely for a hyper-successful go executive she speaks no English. That said – the text hither says that they remove hold entered into sale agent agreements with all the domestic airline companies too “over 30 international airline companies”.
UTA is – according to their (stock) advertisement the fastest developing air-tickets way inwards the domestic civil aviation industry...
It all looks rattling professional person but only at starting fourth dimension glance…
The NYSE drops its guard
I would non live surprised if this stock were listed on the Pink Sheets or fifty-fifty the AMEX. This sort of stuff you lot tin notice on the UK's AIM board – but the New York Stock Exchange is special. They remove hold higher standards! To engagement the SEC has only forcedly delisted a unmarried NYSE listed companionship for fraud – too that was ACLN.
The NYSE must live pretty sure of itself. UTA has received 1 of the highest honors inwards capitalism... they opened the flooring of the NYSE. It is an honor I dubiety volition always live bestowed on me.
How the companionship represents all of this inwards their accounts
By my reckoning this is a companionship where you lot tin almost non bother looking at the accounts – you lot could curt it off the website. But – existence an accounting junky I am going to aspect at the accounts anyway.
First I desire to aspect at the 10K. There they interruption downwards the trouble organisation yesteryear department -
You tin run into why the stock is sold on the Air-tickets too Hotel booking business. Air-tickets it seems remove hold an 84 per centum gross margin. Hotel bookings a 67 per centum margin. Tours remove hold a thirteen per centum gross margin.
There is 1 thing which jumps out similar a sore pollex inwards this tabular array - too that is at that topographic point is no elimination delineate inwards the revenue break-down. Surely the Tours trouble organisation buys stuff from the air-tickets or hotel businesses?
That lack of an elimination delineate is plenty to enquiry the company’s accounting. If they don’t merchandise with each other at all so they make non belong together – too at that topographic point is no argue to remove hold them within 1 corporate structure.
However I am less concerned with the revenue delineate than with the cost line. Look at the cost of services inwards the air-tickets too hotel business. The air ticket trouble organisation had cost of services of 2.7 1 thou m dollars – too this is for a trouble organisation that claims to remove hold 24/7 offices all over China, delivery inwards over 50 cities too an information technology Team of specialists across the world.
The companionship fortunately fifty-fifty gives us a break-down of costs inwards diverse sections.
This global squad of information technology too CRM specialists comes inexpensive – website maintenance for the total airline booking companionship comes to $44 thousand. No website maintenance is listed for the hotel trouble organisation at all.
It is of class consistent with my discoveries most the website. There is no functional website, no booking system, no payment system, no international airline tab except inwards Chinese, no rental automobile tab, too photos of all the international hotels existence identical.
As it is impossible to pay (despite them claiming “convenient online payments”) it is probable that at that topographic point is no substantial revenue inwards that business.
The companionship is all the same non alone fictional – at that topographic point was a existent kiosk go trouble organisation – too at that topographic point is an underlying go agency.
The companionship claims inwards its total trouble organisation to remove hold 248 employees at YZL every bit of the terminate of 2007 – but given increase too acquisitions that publish has grown. This trouble organisation claims staff costs of $436 thousand. That is most $1800 per somebody per twelvemonth using the depression 248 employees number. This trouble organisation would usually include some information technology staff too other above-average wage earners – indeed 1 of the slides to a higher house says that the hotel booking trouble organisation has “over 200 professional person staff”. The minimum wage inwards Shenzen is 1100 Remimbi per month which is $162 per calendar month or $1940 per year. At a starting fourth dimension cutting this companionship is paying nether minimum wages. In the claims at the top of this ship they claim over 300 UTG client representatives inwards simply the telephone band center. I approximate a lot of people mightiness live part fourth dimension too at that topographic point are rattling few higher-wage staff such every bit information technology workers. But whatever – either they don’t remove hold the staff or they are rattling lowly paid or the accounts are wrong.
Total salaries are simply over $500 thou – too the companionship has claimed to remove hold information technology staff about the world, a 300 topographic point telephone band middle too over 200 professional person staff.
The companionship also claims to remove hold telecommunication expense of most $75 thou annually. With over 300 people inwards the telephone band middle (as per their stock advertisement quoted above) these telephone band centers would live the cheapest inwards the basis to run bar none.
However hither I am comparison the salary neb to minimum wages. Influenza A virus subtype H5N1 quick Google search tells you lot that sales managers inwards Shenzhen are rattling highly paid yesteryear Chinese standards. Here is an article from 2007 that suggests the average salary for a Shenzhen sales manager is over USD40 thousand. There has been wage inflation inwards Shenzhen since then. Average salaries inwards Shenzhen are only a fraction of those lofty levels but soundless roughly 4 times minimum wage. It seems impossible that at that topographic point is a 300 somebody telephone middle business office hither at those salaries too the cost base of operations detailed inwards the annual financials – all the same I tin only dot out inconsistencies – I cannot verify whether the annual filing (10K) or the 300 somebody telephone middle disceptation is correct.
But hi – I am existence form to them. I am using the terminate 2007 employee numbers. The 10K has the next employee disclosure:
Thinking most the costs from a trouble organisation perspective
I desire to intend most these costs from a trouble organisation perspective. There is almost no client acquisition cost inwards the accounts. In this trouble organisation getting customers inwards is really expensive. Travel related click fees are with the most expensive clicks on Google – too I presume that they are on Baidu too. Indeed inwards a thin-margin trouble organisation similar www.checkin.com.au if you lot aggressively seek additional customers you lot grow quite nicely but eventually with negative margins. You volition brand coin only if the customers render too volume to a greater extent than flights/hotels without paying additional click fees to Google. This is a companionship that – at to the lowest degree inwards its accounts – is growing similar a weed with null client acquisition expenses – too with an alone dysfunctional website.
Is at that topographic point whatever example for owing this stock at whatever toll to a higher house zero?
I desire to caput this 1 off at the pass. It is pretty clear from this analysis that the chief argue for owning the stock of Universal Travel Group is dubious. The online booking engine is dysfunctional – too the massive margins that it claims (84 per centum for airplane tickets) are thus also dubious.
All the profits that the companionship claimed it made out of the go booking trouble organisation (by far the volume of its claimed profits) are similarly dubious – though at that topographic point is a existent go companionship which mightiness live making some profits.
The companionship claims inwards its most recent quarterly remainder canvass to live carrying 43 1 thou m inwards cash too accounts receivable of almost xx million. If the airline too hotel trouble organisation are dubious so the profits generated that cash are dubious. In that example the cash itself is dubious.
I know people volition purchase this every bit Ben Graham net-net stock if it collapses. Unless this companionship tin larn a large iv audit trouble solid to sign-off for them I intend you lot tin – at to the lowest degree for the minute enquiry the entire remainder sheet. They remove hold all the same simply appointed a novel auditor. I quote the press release: the Board of Directors, inwards consultation with its Audit Committee, has appointed Goldman Kurland Mohidin ("GKM") every bit the Company's independent auditor to supervene upon Acquavella, Chiarelli, Shuster, Berkower & Co., LLP, effective September 1, 2010. I don't know who GKM are – too I volition live thrilled if whatever of my readers tin – off the top of their caput – hollo 3 other companies they audit. Whatever: I intend that GKM tin remove hold it every bit read that this is a higher-than-normal-risk audit assignment. And the starting fourth dimension thing to make – confirm the existence of that $43 1 thou m cash stash.
How the companionship is behaving?
The companionship is non behaving every bit if this is a cash rich company. The companionship has 1 existent trouble organisation – 1523 go kiosks which appear inwards companionship promotional literature every bit electronic booths. I intend this was (at to the lowest degree at 1 stage) a existent go booking trouble organisation too remains 1 albeit off the internet. The kiosks were places that people without a estimator or telephone could volume go online using a impact screen. I remove hold non seen whatever of these kiosks but remove hold spoken to people who have. They simply sold them for forty 1 thou m CNY – or most $5 million. They proudly annotation all the same that they larn to continue the travel-related revenue from these kiosks for the side yesteryear side 2 years. As this was the foundation trouble organisation for the companionship it seems unlikely they would sell it specially every bit the accounts suggest they are awash with cash.
They did non denote whether they had a gain or loss on the sale of that trouble organisation – but someone I know was told (last year) yesteryear the companionship that the cost base of operations of these kiosks was most $6000 each. On those figures they are taking a largish loss. This is non the conduct of a companionship with a rigid trouble organisation swimming inwards cash.
The companionship has all the same been buying other businesses – such every bit a hotel booking trouble organisation inwards Chonquing. But the other companionship websites including this 1 http://www.cba-hotel.com/ remove hold – when worked on – a similar Alice-in-Wonderland character. That site produces similar errors when it gets about to payment time. It is all the same browser sensitive. If you lot occupation Firefox or Microsoft Internet Explorer you lot air current upward at pages which are gibberish – non fifty-fifty recognizable Chinese. (I relied on Chinese friends to tell me that though – I can't tell the existent Chinese from the gibberish Chinese.) Whatever browser you lot occupation you lot air current upward with the unusual inability to volume anything.
The CBA-hotels.com site all the same does remove hold a forgotten password choice – they volition text your password to your mobile phone. If someone has a Chinese mobile telephone I would dear them to exam that.
Still – other people remove hold a different impression of this website. One broker (Emissary Capital) study described this website every bit follows:
Did nosotros notice that at that topographic point was anything existent most the companionship inwards our investigation?
Yes. There are non-fictional elements here. As far every bit nosotros tin tell the companionship really does run tours. The margins for this tour trouble organisation are higher than most tour businesses study – too given the accounts are clearly to a greater extent than by too large questionable I would non set much store inwards its value – but at that topographic point is some value here.
More to the dot at that topographic point is a existent telephone based go agent hither – 1 that does non introduce every bit a national agent (the telephone is answered inwards Cantonese). But every bit at that topographic point is a go agent at that topographic point volition live some sales.
We also were surprised that some things nosotros found on Google too Baidu inwards Chinese that were to a greater extent than supportive of this companionship than most of this weblog post. The companionship press released that it had received some awards:
Relationship with Priceline
The companionship claims a human relationship with Priceline inwards their conference call. They claim that Priceline entered this to strengthen their topographic point inwards PRC – too that 8000 hotels volition live available for online booking through this relationship. We remove hold non found them.
But so I encourage readers to fiddle with the website too run into if you lot larn something better. And if you lot are travelling inwards PRC too you lot desire to occupation their services I would dear to listen dorsum from you.
John
PS. Disclosure: when nosotros notice something similar this nosotros tend to become short. We rest truthful to tendency. Oh, too inwards keeping with the Lewis Carroll subject throughout this weblog post, if you lot are long this I remove hold a unmarried slice of advice: “Beware the Jabberwock my son”.
One of my lines of trouble organisation is finding frauds too shorting them.
On rare occasions I expose them.
One of those rare occasions was with Universal Travel Group.
Today the SEC settled fraud charges against directors of UTG. The details are amusing...
The Commission alleges that UTG, Jiang too Xie failed to expose cash transfers of roughly $41 1 thou m to thirty-four unknown entities inwards Hong Kong too PRC betwixt September 2008 too March 2011. The transferred cash derived from individual too populace stock offerings inwards the U.S., too UTG claims it was returned to Chinese accounts of its subsidiaries every bit part of a currency exchange.And later:
Further, prior to June 2011 the Commission alleges that the defendants falsely described UTG's trouble organisation organization, failing to expose that UTG had transferred sure subsidiaries to 3rd parties pursuant to agreements designed to give UTG the economical benefits of ownership, too UTG materially overstated its revenues too profits inwards its quarterly reports inwards 2010. In 2010, UTG is also alleged to remove hold failed to obtain an auditor's attestation to its assessment of internal controls. Jiang too Xie are alleged to remove hold knowingly failed to found proper internal controls at UTG, caused documents to live falsified, too falsely certified to UTG's internal controls for 2010.
So what was the penalty for all this?
Without admitting or denying the allegations, UTG, Jiang too Xie remove hold consented to the entry of concluding judgments that: (i) permanently enjoins them from futurity violations of the federal securities laws; (ii) orders UTG, Jiang too Xie to pay civil penalties of $750,000, $125,000 too $60,000, respectively; too (iii) bars Jiang too Xie from serving every bit an officeholder or manager of a populace companionship for 5 years.
As the proposed small town is land of study to approving yesteryear the courtroom I am wondering if at that topographic point is a remove a chance that the courtroom rejects the settlement.
And simply so you lot know how this fraud worked hither is my master copy weblog post:
Travelling through PRC with the Universal Travel Group: wing from Beijing to Yichang – pick upward your tickets at Shenzhen airport!
I am closed friends with the major investor inwards a little but good placed online go business. If you lot always demand a modestly priced hotel inwards Commonwealth of Australia yesteryear far the best site is www.checkin.com.au. It does non remove hold the best attain – but it fulfils the business office of the discounter – running on the thinnest margin too existence a house where hotels tin (quietly) shift their excess inventory. If you lot desire a trouble organisation hotel inwards Sydney don't bother with anything else – checkin.com.au is the best deal. If you lot desire a romantic getaway inwards the Blue Mountains at that topographic point are plenty of other suggestions though you lot mightiness larn lucky with the discounter.
Travel booking companies remove hold – for the reasons stated to a higher house – interested me. And – existence inwards my trouble organisation – I similar a inexpensive stock.
So a fast growing online hotel too airline booking companionship inwards PRC trading at a PE ratio of most 5 caught my eye. I can't resist a bargain. Here is the companionship description from the footer of their press releases.
Universal Travel Group is a leading go services provider inwards PRC offering bundle tours, air ticketing, too hotel reservation services via the Internet too client service representatives. The Company also operates TRIPEASY Kiosks, which are placed inwards shopping malls, business office buildings, residential even out buildings, too tourist sites. These kiosks are designed for go booking with credit too banking company cards, too serve every bit an advertising platform for Universal Travel Group. The Company's headquarters too chief base of operations of operations is inwards Shenzhen inwards the Pearl River Delta part of China. More recently, Universal Travel Group has expanded its trouble organisation into Western China, opening a 2nd domicile base of operations inwards the Chongqing Delta region, too other attractive, under-penetrated tier-two go markets throughout the country. For to a greater extent than data on the Company, delight see http://us.cnutg.com .But nosotros at Bronte insist on at to the lowest degree some due-diligence too so nosotros spent some fourth dimension piddling most inwards their website. I volition cutting to the chase. We volition non live buying the stock. Too Jabberwocky for us.
Background: the claims made yesteryear Universal Travel Group
The Universal Travel Group (NYSE:UTA) is a consolidation of small-scale go agents too grouping tour companies inwards China. None of these are rattling attractive every bit a stock investment. The existent appeal is inwards an online-booking go companionship that companionship presentations compare to Priceline, Expedia too CTrip. (CTrip is the dominant Chinese online-booking service. It trades on the Nasdaq, has a marketplace topographic point capitalization simply below $6 billion too has a price-earnings ratio simply to a higher house 50.)
The UTA website gives a trouble organisation description. I remove hold included inwards hither the screen-shots from the website inwards example the websites alter inwards response to this blog. Here is the screen-shot.
I should quote this because it is worth coming dorsum to. They claim to remove hold “convenient online payments”, “more than 170 countries overseas, to a greater extent than than 30,000 hotels”, “more than 200 professional person staff”, “over 300 UTG client representatives across the province ready to furnish 24/7 service”, “primary agent of domestic too international airlines” too an “IT Team … composed of specialists from all across the basis [which] includes experts who specialize inwards client management systems, telephone band middle system, society processing system, air ticket reservation scheme too service character monitoring system. With over 5 years sense inwards e-development, they volition ensure your sense goes smoothly too efficiently.”
This sounds – at to the lowest degree yesteryear this description – every bit a competent touchstone hotel-and-flight booking engine. The website you lot run into to a higher house is a little unusual because it does non remove hold a tab to volume cars too on a trouble organisation trip I usually remove hold a automobile – but that seems a little omission. [CTrip does remove hold a car-tab on their website but it is little too you lot uncovering that all rental cars include a driver which is likely a necessity for a gweilo similar me driving inwards China.]
So far – so good.
Alas when you lot start to occupation this site you lot air current upward going downwards a rabbit hole of Lewis Carroll proportions.
Trying to volume a flight: Beijing to Yichang
I most sure as shooting was non going to purchase an online go companionship without checking out their information technology – too what improve way to make that than yesteryear using it.
Fortunately UTA has an English linguistic communication language go booking site (http://en.cnutg.com/). On it I tried to volume a one-way flying from Beijing to Yichang. That is a trip I made largely yesteryear track inwards the early on 1980s which was – I tin assure you lot – a different fourth dimension inwards China. Anyway fairly rapidly it gave me 3 options. Influenza A virus subtype H5N1 screen-shot is here.
This is fairly convincing. They are the same flights that I found when I did the same search on CTrip.com. Indeed the prices were identical – too the chief reward of CTrip was that it also told me the pricing on alternate days inwards a keen graphical format. CTrip also gave me some neater telephone options – including skype.
There were some oddities – the site had no box (pop-up or otherwise) which explained ticket conditions. You did non know whether these were non-refundable tickets or whether flying times could live changed too nether what terms. Those weather were clearly available on CTrip.
This gets really surreal when you lot endeavour to really volume 1 of these flights. Here is what happens when I endeavour to volume a ticket on flying CA1823 on Universal Travel Group's website. First I larn taken to a page where it asks me to topographic point myself yesteryear passport or ID card. I chose an Australian passport (but used a imitation number). It also asked me how I wanted to pick upward the ticket: at the company, the aerodrome or onsite delivery. I chose the airport. It gives me a payment choice – existence cash or credit. The screen-shot is below.
Now at that topographic point are in 1 lawsuit again some odd things most this – most notably the aerodrome address they desire me to pick the ticket upward at. It is Counter 42, 43 Terminal B, Bao'an International Airport, Shenzhen. Now hollo upward I am booking flying from BEIJING to YICHANG. There is no indication that I volition always live inwards Shenzhen. It is 1200 miles from Beijing to Shenzhen – it mightiness live a little out of my way to collect the ticket. In the American context this is similar flying from New York to Greensboro North Carolina too existence asked to pick upward the ticket inwards Miami.
We did the same search inwards Chinese too nosotros got the same bizarre result.
By contrast – when I did the booking clitoris on CTrip.com it made me register every bit a client – too so took me to a much to a greater extent than sensible page with options to give addresses too mobiles both within too exterior PRC too with payment options including credit cards too Paypal. It also had highly sensible pop-up boxes which told me the weather of the ticket (for example nether what terms I could alter my flying times).
But – simply to live convinced – I needed to run into whether I could volume a ticket for delivery at an aerodrome 1200miles from my starting airport. So I tried it using the cash booking option. It would permit me – but when I finally pressed complete it gave me this auto-generated page:
Being a sucker for penalisation I translated the Chinese too found a touchstone laid of mistake codes. I got the same when I tried to purchase with credit – too at no phase was I given a box to set my credit card inwards or a link to Paypal. I did these screenshots using chrome browser. I reproduced them all except the to a higher house mistake using Firefox. In Chinese I assemble at that topographic point is slightly to a greater extent than browser-choice instability.
Ok – it looks similar this go site is all front-end, no-back terminate – at that topographic point is no actual booking, no machinery of collecting payment – no nil really.
The companionship inwards its stock-promotion spiel says that it allows for “convenient online payments” but at that topographic point was no machinery hither for making whatever payment. In this day-and-age it is non hard to remove hold PayPal. That payment choice tin live gear upward rattling quickly.
Could all this live simply because nosotros are doing this inwards English linguistic communication too this is a Chinese company?
By this phase nosotros wondered if nosotros were going insane – was this a existent companionship at all? We had a friend repeat just this experiment inwards Hanji. His results differed inwards 1 of import way – which is when you lot really gave a telephone publish too confirmed a booking they said a consultant would band you lot back.
Also – the prices were consistently 2 per centum cheaper than if you lot were querying inwards English. Finally – too this was to my persuasion key – at that topographic point was a SKYPE ME clitoris simply similar on CTrip.Com. You could non pay online – but this was atomic number 82 generation for an off-line go company. There was something at that topographic point – it simply wasn’t “instant reservations” too “convenient online payments”.
Note: no international airlines
There is 1 to a greater extent than unusual thing most this website – at that topographic point is no chance to volume international flights. The spider web page pictured to a higher house all the same describes the companionship every bit a Primary Agent for international airlines.
Hotels
The flake of this trouble organisation I remove hold idea most most is hotel booking. That is my closed friend's business. If a Chinese go companionship is compiling inventory inwards unusual hotels they must live obtaining that inventory from someone. I idea I mightiness volume a hotel nigh domicile too cheque the companionship that way. Fortunately on the forepart page they had an “International Hotels” option. I idea I mightiness volume something inwards Sydney too remove hold my married adult woman somewhere nice. And having done that I mightiness fifty-fifty piece of work out whose inventory they were selling. (That would live of involvement to my friend's trouble organisation – which is after all – a trouble organisation of sourcing too trading inwards hotel inventory.)
Here is the International Hotel booking page.
Ok – so I tried to pick a Sydney hotel for side yesteryear side Fri nighttime – which seems similar a overnice fourth dimension to remove hold my married adult woman out. Alas my precious darling volition live disappointed. They make non remove hold a hotel inwards Sydney that night. Nor whatever other nighttime I tried.
So let’s endeavour somewhere else – how most New York, NY? Same result.
But if you lot aspect at the site it advertises rooms at St Giles The Tuscany – which is a quite overnice hotel inwards New York – so I pressed that link.
It brings upward something that looks similar the right hotel (albeit with a bad too blurry photo). But the buttons that say “hotel description” or fifty-fifty the clitoris that says “book” make non work. Here is a screen-shot.
I am inquiring to volume a hotel. I remove hold got to the right page – too – yep – the clitoris that says “book” does non work. Have you lot always known a store that volition exhibit you lot all the inventory but non permit you lot buy?
But it is worse than that – I tried one-half a dozen other hotels that they advertised on the left paw side of their page. Every fourth dimension it bought upward the same indistinct photo. All the hotels were identical. I know that 1 trouble organisation hotel is to a greater extent than or less similar some other too when you lot are cocooned inwards 1 it does non affair whether you lot are inwards Auckland or Helsinki – but this is ridiculous. The photos were literally identical. No wonder the painting naming the hotel is blurred.
We did the same queries inwards Chinese too found the same thing… for example nosotros were unable to notice whatever hotels inwards Sydney or New York on whatever nighttime nosotros tried.
Maps
The website has a maps tab. This is a really useful characteristic for a go booking companionship because you lot tin brand a lot of coin booking go at curt notice to people on the road. I wanted to fiddle with that. Alas it did non piece of work – it mapped a little expanse about Shenzen – which is non much occupation picking a hotel inwards Yichang.
But it was far worse than that – the website was far-from-optimized for occupation on a mobile telephone (running on an iPhone it produced 2 mistake codes inwards presentation which the iPhone asked if I wanted to ignore). This is serious for a go website which people frequently desire to refer to on the road. It is doubly serious for a go website inwards PRC because inwards PRC to a greater extent than than most places people interact with the mesh through their phone.
Talking most phones
Well I idea that perhaps their website was dysfunctional – but at to the lowest degree I mightiness live able to volume on the phone. There was a telephone publish (400 888 9966). I rang it using the trusty Google Voice which would remove hold represented me every bit ringing from within China. There was a message to press “6” for English linguistic communication – which I pressed – too so they fed me through an endless Chinese menu. I pushed buttons at random too was left on music on which I waited for 30 minutes.
I figured I needed a Chinese speaker to make this – so my friend came to my rescue. After some dropped lines too the similar he found that – underlying this too at the other terminate of the telephone was a existent go agency. You could volume both domestic too international flights on the phone. Indeed the website has an international flights tab inwards Chinese – too when you lot larn through to the booking concealment they dot that they volition telephone you. Do non intend for a infinitesimal that this companionship is alone fictional – nosotros are sure that at that topographic point is a go way underlying this companionship but it is non an mesh go way with “air ticketing too hotel reservations via the internet”. It is an one-time – express dial upward go way – just the type that is existence disintermediated yesteryear the CTrips too Pricelines of the world.
The telephone was answered inwards Cantonese. This companionship purports to live a nation-wide service too my friend expected a conversation inwards Mandarin. When my friend was talking inwards Standard Mandarin the conversation changed. If this were a national companionship (as it purports to be) it would remove hold answered inwards Mandarin.
By this phase I was to a greater extent than than a little intrigued yesteryear this company. I dug about their website a little farther – too found beta versions of their website. One site was fifty-fifty labeled every bit such – it was http://beta.cnutg.com/ . Here is a screen-shot of that page.
The copyright engagement at the bottom (2009) suggest this was non done rattling long ago. The page itself is sketchy too dysfunctional. The bookings tend to become nowhere (surprise) too the English linguistic communication language tab does non piece of work at all.
Customer Management
This companionship claims it has information technology experts who specialize inwards client management systems. They also are strangely missing. For example inwards the chief website inwards the top corner are iv options - “Sign In”, “Register Now”, “Order Management” too “My Account”. They atomic number 82 to the same page – so at that topographic point is really no distinction betwixt them. Once you lot sign inwards at that topographic point is no “Order Management” because they are every bit noted unable to remove hold an order. But earlier that at that topographic point is something which stands out similar a sore-thumb. There is no “forgot my password” option. The cookies on the site make non hollo upward your ID. (CTrip remembers your ID too remembering your ID is key to getting repeat business.)
My travel-business entrepreneur friend volition tell you lot that repeat trouble organisation is the key to profitability inwards 1 of these go booking businesses because the client acquisition is rattling expensive. Google (or inwards PRC Baidu) really make remove hold their cutting every bit key words are rattling expensive inwards travel. This companionship has non fifty-fifty got the basics of client memory right.
But I desire to select you lot dorsum to total claims of the companionship which I repeated above. They described their “IT Team … composed of specialists from all across the basis [which] includes experts who specialize inwards client management systems, telephone band middle system, society processing system, air ticket reservation scheme too service character monitoring system. With over 5 years sense inwards e-development, they volition ensure your sense goes smoothly too efficiently.”
Now aspect at their English linguistic communication Language IR site
The trouble organisation behind this can't volume whatever go on whatever website nosotros found.
According to the investor relations website the total trouble organisation of Universal Travel Group (the flying booking service) champaign has 248 employees at the terminate of 2007 too presumably many to a greater extent than straightaway every bit they remove hold (at to the lowest degree according to the accounts) grown similar a weed. For starters I volition stick with 248 every bit a minimum number. Here is the website screen-shot.
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The adult woman sitting inwards the middle is the CEO/Founder – her hollo is Ms. Jiangping Jiang too strangely for a hyper-successful go executive she speaks no English. That said – the text hither says that they remove hold entered into sale agent agreements with all the domestic airline companies too “over 30 international airline companies”.
UTA is – according to their (stock) advertisement the fastest developing air-tickets way inwards the domestic civil aviation industry...
It all looks rattling professional person but only at starting fourth dimension glance…
The NYSE drops its guard
I would non live surprised if this stock were listed on the Pink Sheets or fifty-fifty the AMEX. This sort of stuff you lot tin notice on the UK's AIM board – but the New York Stock Exchange is special. They remove hold higher standards! To engagement the SEC has only forcedly delisted a unmarried NYSE listed companionship for fraud – too that was ACLN.
The NYSE must live pretty sure of itself. UTA has received 1 of the highest honors inwards capitalism... they opened the flooring of the NYSE. It is an honor I dubiety volition always live bestowed on me.
How the companionship represents all of this inwards their accounts
By my reckoning this is a companionship where you lot tin almost non bother looking at the accounts – you lot could curt it off the website. But – existence an accounting junky I am going to aspect at the accounts anyway.
First I desire to aspect at the 10K. There they interruption downwards the trouble organisation yesteryear department -
You tin run into why the stock is sold on the Air-tickets too Hotel booking business. Air-tickets it seems remove hold an 84 per centum gross margin. Hotel bookings a 67 per centum margin. Tours remove hold a thirteen per centum gross margin.
There is 1 thing which jumps out similar a sore pollex inwards this tabular array - too that is at that topographic point is no elimination delineate inwards the revenue break-down. Surely the Tours trouble organisation buys stuff from the air-tickets or hotel businesses?
That lack of an elimination delineate is plenty to enquiry the company’s accounting. If they don’t merchandise with each other at all so they make non belong together – too at that topographic point is no argue to remove hold them within 1 corporate structure.
However I am less concerned with the revenue delineate than with the cost line. Look at the cost of services inwards the air-tickets too hotel business. The air ticket trouble organisation had cost of services of 2.7 1 thou m dollars – too this is for a trouble organisation that claims to remove hold 24/7 offices all over China, delivery inwards over 50 cities too an information technology Team of specialists across the world.
The companionship fortunately fifty-fifty gives us a break-down of costs inwards diverse sections.
This global squad of information technology too CRM specialists comes inexpensive – website maintenance for the total airline booking companionship comes to $44 thousand. No website maintenance is listed for the hotel trouble organisation at all.
It is of class consistent with my discoveries most the website. There is no functional website, no booking system, no payment system, no international airline tab except inwards Chinese, no rental automobile tab, too photos of all the international hotels existence identical.
As it is impossible to pay (despite them claiming “convenient online payments”) it is probable that at that topographic point is no substantial revenue inwards that business.
The companionship is all the same non alone fictional – at that topographic point was a existent kiosk go trouble organisation – too at that topographic point is an underlying go agency.
The companionship claims inwards its total trouble organisation to remove hold 248 employees at YZL every bit of the terminate of 2007 – but given increase too acquisitions that publish has grown. This trouble organisation claims staff costs of $436 thousand. That is most $1800 per somebody per twelvemonth using the depression 248 employees number. This trouble organisation would usually include some information technology staff too other above-average wage earners – indeed 1 of the slides to a higher house says that the hotel booking trouble organisation has “over 200 professional person staff”. The minimum wage inwards Shenzen is 1100 Remimbi per month which is $162 per calendar month or $1940 per year. At a starting fourth dimension cutting this companionship is paying nether minimum wages. In the claims at the top of this ship they claim over 300 UTG client representatives inwards simply the telephone band center. I approximate a lot of people mightiness live part fourth dimension too at that topographic point are rattling few higher-wage staff such every bit information technology workers. But whatever – either they don’t remove hold the staff or they are rattling lowly paid or the accounts are wrong.
Total salaries are simply over $500 thou – too the companionship has claimed to remove hold information technology staff about the world, a 300 topographic point telephone band middle too over 200 professional person staff.
The companionship also claims to remove hold telecommunication expense of most $75 thou annually. With over 300 people inwards the telephone band middle (as per their stock advertisement quoted above) these telephone band centers would live the cheapest inwards the basis to run bar none.
However hither I am comparison the salary neb to minimum wages. Influenza A virus subtype H5N1 quick Google search tells you lot that sales managers inwards Shenzhen are rattling highly paid yesteryear Chinese standards. Here is an article from 2007 that suggests the average salary for a Shenzhen sales manager is over USD40 thousand. There has been wage inflation inwards Shenzhen since then. Average salaries inwards Shenzhen are only a fraction of those lofty levels but soundless roughly 4 times minimum wage. It seems impossible that at that topographic point is a 300 somebody telephone middle business office hither at those salaries too the cost base of operations detailed inwards the annual financials – all the same I tin only dot out inconsistencies – I cannot verify whether the annual filing (10K) or the 300 somebody telephone middle disceptation is correct.
But hi – I am existence form to them. I am using the terminate 2007 employee numbers. The 10K has the next employee disclosure:
EmployeesTotal staff too salaries costs are – every bit I noted – simply over $500 thousand. And for that coin – less than $700 an employee per twelvemonth – they non only pay them but they furnish social safety too medical insurance. (I don’t intend I demand to become through the proxy, piece of work out costs of the executive staff too so – yesteryear subtraction – piece of work out the costs of the non executive staff. If you lot make it though you lot volition conclude that – if at that topographic point really are almost 780 non-executives too they are only paid that so they must remove hold a genuinely pitiful existence. Whatever – it is unlikely that their relationships with “780 employees” at that total staff cost would live “satisfactory”.)
At the electrical flow time, including our officers, nosotros remove hold roughly 780 full-time employees, including lxxx administrative employees, 200 marketing employees too roughly 500 employees working at our 3 telephone band centers. None of our employees is a fellow member of a matrimony too our relationships with our employees are by too large satisfactory. In accordance with Chinese Labor Law, nosotros furnish social safety too medical insurance to all our employees.
Thinking most the costs from a trouble organisation perspective
I desire to intend most these costs from a trouble organisation perspective. There is almost no client acquisition cost inwards the accounts. In this trouble organisation getting customers inwards is really expensive. Travel related click fees are with the most expensive clicks on Google – too I presume that they are on Baidu too. Indeed inwards a thin-margin trouble organisation similar www.checkin.com.au if you lot aggressively seek additional customers you lot grow quite nicely but eventually with negative margins. You volition brand coin only if the customers render too volume to a greater extent than flights/hotels without paying additional click fees to Google. This is a companionship that – at to the lowest degree inwards its accounts – is growing similar a weed with null client acquisition expenses – too with an alone dysfunctional website.
Is at that topographic point whatever example for owing this stock at whatever toll to a higher house zero?
I desire to caput this 1 off at the pass. It is pretty clear from this analysis that the chief argue for owning the stock of Universal Travel Group is dubious. The online booking engine is dysfunctional – too the massive margins that it claims (84 per centum for airplane tickets) are thus also dubious.
All the profits that the companionship claimed it made out of the go booking trouble organisation (by far the volume of its claimed profits) are similarly dubious – though at that topographic point is a existent go companionship which mightiness live making some profits.
The companionship claims inwards its most recent quarterly remainder canvass to live carrying 43 1 thou m inwards cash too accounts receivable of almost xx million. If the airline too hotel trouble organisation are dubious so the profits generated that cash are dubious. In that example the cash itself is dubious.
I know people volition purchase this every bit Ben Graham net-net stock if it collapses. Unless this companionship tin larn a large iv audit trouble solid to sign-off for them I intend you lot tin – at to the lowest degree for the minute enquiry the entire remainder sheet. They remove hold all the same simply appointed a novel auditor. I quote the press release: the Board of Directors, inwards consultation with its Audit Committee, has appointed Goldman Kurland Mohidin ("GKM") every bit the Company's independent auditor to supervene upon Acquavella, Chiarelli, Shuster, Berkower & Co., LLP, effective September 1, 2010. I don't know who GKM are – too I volition live thrilled if whatever of my readers tin – off the top of their caput – hollo 3 other companies they audit. Whatever: I intend that GKM tin remove hold it every bit read that this is a higher-than-normal-risk audit assignment. And the starting fourth dimension thing to make – confirm the existence of that $43 1 thou m cash stash.
How the companionship is behaving?
The companionship is non behaving every bit if this is a cash rich company. The companionship has 1 existent trouble organisation – 1523 go kiosks which appear inwards companionship promotional literature every bit electronic booths. I intend this was (at to the lowest degree at 1 stage) a existent go booking trouble organisation too remains 1 albeit off the internet. The kiosks were places that people without a estimator or telephone could volume go online using a impact screen. I remove hold non seen whatever of these kiosks but remove hold spoken to people who have. They simply sold them for forty 1 thou m CNY – or most $5 million. They proudly annotation all the same that they larn to continue the travel-related revenue from these kiosks for the side yesteryear side 2 years. As this was the foundation trouble organisation for the companionship it seems unlikely they would sell it specially every bit the accounts suggest they are awash with cash.
They did non denote whether they had a gain or loss on the sale of that trouble organisation – but someone I know was told (last year) yesteryear the companionship that the cost base of operations of these kiosks was most $6000 each. On those figures they are taking a largish loss. This is non the conduct of a companionship with a rigid trouble organisation swimming inwards cash.
The companionship has all the same been buying other businesses – such every bit a hotel booking trouble organisation inwards Chonquing. But the other companionship websites including this 1 http://www.cba-hotel.com/ remove hold – when worked on – a similar Alice-in-Wonderland character. That site produces similar errors when it gets about to payment time. It is all the same browser sensitive. If you lot occupation Firefox or Microsoft Internet Explorer you lot air current upward at pages which are gibberish – non fifty-fifty recognizable Chinese. (I relied on Chinese friends to tell me that though – I can't tell the existent Chinese from the gibberish Chinese.) Whatever browser you lot occupation you lot air current upward with the unusual inability to volume anything.
The CBA-hotels.com site all the same does remove hold a forgotten password choice – they volition text your password to your mobile phone. If someone has a Chinese mobile telephone I would dear them to exam that.
Still – other people remove hold a different impression of this website. One broker (Emissary Capital) study described this website every bit follows:
In August 8, 2007, UTG acquired Shanghai Lanbao Travel Service Company Limited, a centralized real-time booking scheme that provides consumers too go related businesses with hotel booking services via the mesh too mobile telephone text-messages. The companionship owns too manages the honour winning PRC Booking Association website, http://www.cba-hotel.com/, which receives roughly 200,000 visitors daily. The network is opened upward to to a greater extent than than 200,000 hotels, 5,000 booking centers too 8,000 go agencies too tourist companies throughout China. Its intra-hotel network includes to a greater extent than than 3,000 franchise hotels too 800 hotel booking businesses too agencies across China. The company’s PRC Booking Association website, http://www.cba-hotel.com, receives most 200,000 visitors daily and, inwards 2006, made most 500,000 hotel reservations.Maybe the goodness analyst at Emissary had a different sense on the website to us. They paid cash too stock for that business. The stock I presume has found its way to the NYSE too so to retail too institutional investors inwards America.
Did nosotros notice that at that topographic point was anything existent most the companionship inwards our investigation?
Yes. There are non-fictional elements here. As far every bit nosotros tin tell the companionship really does run tours. The margins for this tour trouble organisation are higher than most tour businesses study – too given the accounts are clearly to a greater extent than by too large questionable I would non set much store inwards its value – but at that topographic point is some value here.
More to the dot at that topographic point is a existent telephone based go agent hither – 1 that does non introduce every bit a national agent (the telephone is answered inwards Cantonese). But every bit at that topographic point is a go agent at that topographic point volition live some sales.
We also were surprised that some things nosotros found on Google too Baidu inwards Chinese that were to a greater extent than supportive of this companionship than most of this weblog post. The companionship press released that it had received some awards:
Universal Travel Group (NYSE:UTA) ("Universal Travel Group" or the "Company"), a leading go services provider inwards PRC offering bundle tours, air ticketing, too hotel reservation services online too via client service representatives, today announced that it was presented with 3 awards at the 16th Annual Asian Tourism Golden Travel Awards Ceremony, held inwards Beijing on August 29, 2010.Now awards are – yesteryear their nature – populace too tourism awards are doubly promoted – so nosotros idea nosotros mightiness notice some references to these awards on the web. Alas – at that topographic point is non a unmarried reference inwards Google to these awards without the discussion “universal” inwards it. Influenza A virus subtype H5N1 Google Search which insists on the phrase “Annual Asian Tourism Golden Travel Awards” too the absence of the discussion “universal” presents no results. We idea that the companionship mightiness remove hold made upward the awards. But alas searches using Chinese characters pulled upward a few additional references. We tin notice a 16th annual honour too a 15th annual honour but no 14th annual award. Here is a link to a press article nosotros found... http://www.chinadaily.com.cn/hqzx/2010-09/04/content_11257208.htm. Indeed nosotros remove hold found some pictures of this honour ceremony – too they include photos of executives at UTA... http://travel.sina.com.cn/news/2010-02-02/1523126027.shtml#page_pic.
Universal Travel Group was honored with the Top Ten Golden Asian Travel Agency too Top Rated Travel Agency inwards Greater PRC Award, too Ms. Jiangping Jiang, Chief Executive Officer of UTA, received the Most Influential Figure inwards the Travel Industry inwards Greater PRC Award.
"We are honored to have these awards which recognize the strides nosotros remove hold made inwards edifice a leading go service trouble organisation inwards China," stated Ms. Jiang. "We are committed to providing fantabulous service too a broad diversity of go offerings to our customers too aspect forrad to continuing to expand our air ticketing, hotel reservation too bundle tour trouble organisation across China."
Relationship with Priceline
The companionship claims a human relationship with Priceline inwards their conference call. They claim that Priceline entered this to strengthen their topographic point inwards PRC – too that 8000 hotels volition live available for online booking through this relationship. We remove hold non found them.
But so I encourage readers to fiddle with the website too run into if you lot larn something better. And if you lot are travelling inwards PRC too you lot desire to occupation their services I would dear to listen dorsum from you.
John
PS. Disclosure: when nosotros notice something similar this nosotros tend to become short. We rest truthful to tendency. Oh, too inwards keeping with the Lewis Carroll subject throughout this weblog post, if you lot are long this I remove hold a unmarried slice of advice: “Beware the Jabberwock my son”.
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