Aegis Capital reiterates that Ctrip holds a target price of 66 US dollars

Beijing time August 8 Evening News, Aegis Capital published a study today, reiterated Ctrip (NASDAQ:CTRP) "Hold" rating, while maintaining a 66 dollar target share price unchanged.

The following is a summary of the contents of the report:

Priceline Investment Ctrip: Priceline, the largest online travel company in the United States, recently announced that it will invest in convertible bonds, with a total of $500 million trillion, up to 10%. Ctrip has agreed to Priceline in the next year through the open market to buy its shares. While buying convertible bonds, Priceline will also be given the right to appoint an observer to Ctrip's board of directors.

The third issue of bonds: Ctrip has issued two bonds before, respectively, in September 2012, 180 million U.S. dollars (5-year, annual interest rate 0.5%, conversion price per share ads 19.34 U.S. dollars) and 2013 10 of the 800 million dollar bonds (5 years, annual interest rate 1.25%, conversion price per share ads 78.39 dollars). We believe that the convertible bond purchased by Priceline will also be a 5-year period, and the conversion price will be higher than the previous two. At the end of the second quarter of fiscal year 2014, Ctrip had cash and a short-term investment of $1.7 billion. Therefore Priceline investment will not change the strategy and operation of Ctrip in a short time. But the deal clearly shows that Ctrip is the leading competitor in China's online travel market.

Increase Cross-selling: Priceline market value is 67 billion dollars. In the first quarter of the 2014 fiscal year, Priceline revenue grew 26% per cent year-on-year, with a profit margin of 20%. Under the cooperation agreement, in addition to the hotel reservation service, Ctrip will also provide its customers with new Priceline brand services, including services from rentalcars.com and OpenTable platforms. Priceline will also promote Ctrip's other travel services to its clients, including ticket bookings and attractions ticketing services. We believe that Ctrip now has to do is prove that its business plan can use these additional capital to drive the company's revenue growth and profitability.

Valuation: We reaffirm Ctrip's "hold" rating while maintaining a 66 dollar target share price unchanged. (Li Ming)