<P><FONT face=黑体 size=6><STRONG>Citigroup 花旗：中国在线旅游行业研究 04.17</STRONG></FONT></P>
<P><FONT face=黑体 size=6><STRONG>17 April 2007 | 5 pages</STRONG></FONT></P>
<P><FONT face=黑体 size=6><STRONG>China Online Travel Mangocity enters at distant #3; Ctrip remains undisputed #1</STRONG></FONT></P>

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<P><FONT size=4> Online competitor Mangocity still loss-making — China Travel International<BR>(“CTI”), which operates Mangocity, reported FY06 results on April 13th.<BR>Although CTI management were reluctant to disclose specific financials, they<BR>indicated that Mangocity, which officially commenced operation on 31 March<BR>2006, is still (unsurprisingly) loss-making due to high startup and marketing<BR>costs. They did not provide a timetable for breakeven.<BR> Mangocity considered #3 in Tier 1 cities — CTI management stated that<BR>Mangocity is now #3 in major cities, behind #1 Ctrip and #2 eLong, and in some<BR>cases even surpassing eLong. They explained Mangocity’s competitive<BR>advantage rests on its ability to leverage CTI’s existing resources and physical<BR>travel agency network in HK, mainland China and overseas, as well as<BR>management’s experience with the travel business in China (with CTI parent<BR>China Travel Services Hldgs celebrating its 80th anniversary next year).<BR> Mangocity financials are unclear — CTI management elaborated that Mangocity<BR>was about one quarter the size of eLong, implying revenues of HK$65m in FY06,<BR>significantly less than the HK$236m calculated from the results announcement,<BR>as Mangocity includes some existing travel agency businesses. The majority of<BR>revenues came from Air Ticketing rather than Hotel Bookings.<BR> Aggressive marketing set to continue into 2007 — In FY06, Mangocity spent<BR>about HK$50-60m on marketing, concentrating on the four Tier 1 cities<BR>(Beijing, Shanghai, Guangzhou and Shenzen). They expect to increase<BR>marketing spend steadily in 2007, to expand Mangocity’s brand presence into</FONT></P>