Goldman keeps Ctrip's neutral rating down to 65 dollars

Beijing time July 31 Evening News, Goldman Sachs released its investment report today to maintain the "neutral" rating of Ctrip (NASDAQ:CTRP), but lowered its target share price by 7% to 65 dollars.

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

Based on non-US general accounting standards, Ctrip's operating profit for the second quarter of 2014 was consistent with our expectations. In the second quarter, Cheng was charged 1.722 billion yuan, an increase of 38% per cent, compared with the average forecast of 4% of analysts surveyed by US and Bloomberg. Based on non-US general accounting standards, operating profit of 202 million yuan, down 34% year-on-year, consistent with our expectations. Ctrip expects revenue from the third quarter to rise 30% per 35% from a year earlier, a median of 2% lower than the average estimate of analysts surveyed by US and Bloomberg.

Analysis：

The mobile business is the focus. Ctrip Mobile Application Download volume Breakthrough 200 million times, and the beginning of 100 million times. Mobile daily turnover of the highest breakthrough RMB 220 million yuan.

In the second quarter, the hotel booked revenue growth of 47% year-on-year, mainly thanks to the volume of bookings increased by 64%. By the end of the second quarter, Ctrip's scheduled network has covered 110,000 domestic hotels and 430,000 international hotels. In the second quarter, prepaid revenue accounted for 15% of the hotel's scheduled revenue, up to 3 digits.

Group buying is another engine that drives rapid revenue growth. In addition, traffic ticket revenue growth of 39% year-on-year, mainly thanks to the ticket booking volume growth of 83%. Ctrip said that the volume of ticket bookings increased 35% to 40% year-on-year, the total number of air tickets to increase 3 times times, which means that Ctrip is still winning market share.

Ctrip expects the Full-year operating profit margin to reach about 12% per cent for the 2014 fiscal year, largely influenced by various expenses. To this end, we lowered Ctrip's profit margin forecast for the 2014 fiscal year. At the same time, we will be Ctrip 2014 to 2016 fiscal year for each share of diluted earnings expected to be lowered 4% to 19%.

Valuation: We continue to maintain the "neutral" rating of Ctrip, with the target price lowered by 7% to 65 dollars. (Li Ming)