In a trading update, South China travel operator ET China said its balance between domestic and overseas package holidays helped it maintain fast growth rates despite a blizzardy holiday period.

Severe snow and ice storms, making it the worst winter in 50 years, pushed the Chinese government into clamping down on internal travel. However, claims chief executive Matthew Ng, ET’s tour operating division was able to achieve an 8.7% increase in gross sales over the seven-day Spring Festival while competitors floundered 'because we are different – we have half domestic and half outbound’.

Domestic tours were reduced, but this was more than made up for by a 47% increase in the number of high-margin overseas tours and a 119% rise in those to Europe. Ng stresses that growing affluence in ET China's chief markets is a strong growth driver. He says that in the huge southern cities of Guangzhou and Shenzhen, 'people are richer, so they can afford to travel further away’.

In a fragmented tour market ET China's GZL brand is ‘bigger than the second- and third-biggest competitors [in the region] put together’, Ng declared, adding that last year's marketing push was behind a 69% surge in January sales year on year.

Annual 2007 results, set for release in March, are forecast to show pre-tax losses of £1.5m from £114.7m sales with a leap to profits of £4.2m from £160m sales suggested for 2008. That should produce earnings of 2.7p, placing the shares on a p/e ratio of more than 30 times. However, given expected growth rates, the rating isn't too demanding and the shares have speculative appeal.

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