Deutsche Bank maintains Ctrip's rating up to 35 US dollars

Sina Science and technology news Beijing time August 1 afternoon, Deutsche Bank released its research report today, maintaining Ctrip (NASDAQ:CTRP) Stock "holding" (Hold) rating, but its target share price from 32 U.S. dollars to 35 U.S. dollars.

The following is a summary of the report:

Ctrip's second-quarter NON-GAAP (non-US GAAP) earnings per share of ads (US depository shares) were 0.35 U.S. dollars, an increase of 44%, the chain growth of 19%. Analysts are expected to grow 23% on average, up 2% per cent on the chain. That was 18% per 15% higher than Wall Street's average forecast. Ctrip when Ti Ying received 1.2 billion yuan, far beyond the management guidance of the forecast limit (up from 15% to 20%), compared with the average analyst expectations and our expectations are higher than 7% and 5% respectively, mainly because of increased business volume. Although the revenue growth is significant, but the operating profit rate is basically flat year-on-year. Thanks to the accumulation of cash, net profits have increased sharply and a decent amount of non-operating income ($ 0.07 per share, accounting for about 21% of ads per share in the second quarter) has been achieved.

Management said revenue growth in the third quarter would reach the guiding forecast limit of 25% year-on-year growth, equivalent to about 4% per cent higher than the 1.4 billion yuan growth of 21% per cent, and flat from our previous year-on-year growth forecasts for 27%. We believe that this guidance forecast may underestimate the seasonal factors that are favorable for the third quarter, so we will increase the forecast for year-on-year revenue growth to 31%.

Gradual growth stems from increased business volume; ARPU weakness

Ctrip second quarter hotel revenue for 511 million yuan (23% year-on-year growth, we are expected to increase 20%), mainly by the volume of business growth of 44% per cent. Similarly, ticket revenues grew 29% from a year earlier (as we expected), and the volume of business grew 34% per cent year-on-year. Hotel ARPU (average per user income) decreased by 14% (in line with our expectations), ticket ARPU year-on-year decrease of 6% (we are expected to reduce 1%), because the emerging low-end products accounted for the increase. Management expects the average business volume of the company to grow by about 25% per cent year-on-year in the third quarter.

The operating profit rate is stable; Net profit is boosted by outside income

Ctrip's operating profit rate for the second quarter was 16% (down 150 basis points), 120 and 60 points higher than analysts ' average forecasts and our expectations. In the operating costs, research and development costs still accounted for a lot (about 22% of the revenue, the previous quarter and the same period a year ago, respectively, 20% and 18%). The cost of sales and management savings through business leverage is clear. NON-GAAP operating profit rate fell 380 basis points year-on-year, the second quarter is 24.7%. Non-gaap net profit margin year-on-year growth of 240 basis points, mainly by the sales of external income chain doubling.

Continuous effort in the field of mobile harvesting more traffic

Management stressed that Ctrip will increase market share as the primary goal of the 2013. Therefore, the company will continue to invest in: 1 channel expansion and customer rating, 2 through it upgrades to improve order fulfillment experience; 3 move. We anticipate that Ctrip's mobile channel will become the company's strong incremental growth trajectory, especially in the area of leisure travel: 1 The second quarter of the mobile transaction has accounted for the hotel/ticket trade 20%/15%; 2 new users require new mobile product categories, such as last-minute subscriptions. However, we remain cautious about the profit margins of the new leisure trip.

Maintain a "hold" rating, raising the target price by 10% to 35 US dollars (about 4% of the drop in space)

As the volume of travel increased, we are expected to increase revenue forecasts for fiscal 2013 and 2014 by 2% per cent, raising the NON-GAAP earnings forecasts by 5% and 6% respectively. Our latest target price is $35, and the corresponding Peg, which is 1 time times relative to earnings, is 24 times times the 2013-year earnings ratio. We will raise the annual growth rate of ads revenue per share for the 2013-2015 fiscal year from 23% to 24%. Maintain the "hold" rating of the unit.

Key risks: Travel market slowdown and better than expected profitability recovery. (Ding Macro)