The stock price of Qunar Cayman Islands Ltd (NASDAQ:QUNR) surged driven by a report that it is actively seeking high-quality technology companies to acquire as part of its strategy to expand its market share.

Qunar Cayman Islands

The shares of the company were trading at $31.63 per share, up by almost 9% at the time of this writing around 1:08 in the afternoon in New York.

Qunar Cayman Islands Ltd (NASDAQ:QUNR) is a Chinese travel website controlled by Baidu Inc (ADR) (NASDAQ:BIDU), the largest internet search provider in China.

In a telephone interview with Bloomberg, CC Zhuang, the chief executive officer of Qunar Cayman Islands Ltd (NASDAQ:QUNR) said the company aims to “capture and restructure” the travel market in China by consolidating other companies.

“The Chinese online travel market is huge and bigger than anybody imagined. Whoever is the last guy left at the table is going to get huge profitability. We have the commitment to make that happen. That’s going to be Qunar,” said Zhuang.

Zhuang emphasized that achieving the goal of Qunar Cayman Islands Ltd (NASDAQ:QUNR) requires more investment in network infrastructure, additional sales staff and engineers. According to him, it is too early to discuss profitability.
Qunar has half-billion dollar war chest

According to Zhuang, Qunar Cayman Islands Ltd (NASDAQ:QUNR) has money to fund acquisitions and other investments. The company has half-billion dollar war chest including more than $200 million in cash and $300 million line of credit from Baidu Inc (ADR) (NASDAQ:BIDU).

At present, Qunar Cayman Islands Ltd (NASDAQ:QUNR) has 20% market share of the flight bookings in China. It has approximately 3% market share in hotel bookings and less than 1% market share of tour packages in the country. The Chinese travel website aims to capture at least 20% market share in each segment of the industry, according to Zhuang.

Qunar previously held merger talks with Ctrip.com

In April, Qunar Cayman Islands Ltd (NASDAQ:QUNR) held merger talks with Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP), according people familiar with the situation at the time. Ctrip.com recently accepted a $500 million investment from Priceline Group Inc (NASDAQ:PCLN).

Zhuang refused to comment on the issue. He pointed out that Qunar will focus on expanding its market share in the hotel bookings and tour packages segments. IResearch estimated that the online travel market in China would grow to $75 billion by 2017. The expanding middle class in the country are spending more on travel and leisure.

Financial performance

During the second-quarter, Qunar Cayman Islands Ltd (NASDAQ:QUNR) posted a wider net loss of 421.6 million yuan from 41.2 million yuan in the same period a year ago. Its sales increased to 400.4 million yuan.

Wall Street analysts estimated that it would report 423.2 million yuan net loss and 347.8 million yuan in sales for the quarter.

Qunar Cayman Islands Ltd (NASDAQ:QUNR) forecasted that its revenue would grow by 90% or more for the third quarter.