Goldman keeps Ctrip's neutral rating up to 46 dollars

Beijing time May 8 Evening News, Goldman Sachs released a study today, maintaining a "neutral" rating of Ctrip (NASDAQ:CTRP) shares, and raised its target share price to 46 U.S. dollars.

The following is the full report:

Ctrip reported first-quarter results in line with expectations. Net revenue of 1.582 billion yuan, an increase of 36% per cent, higher than expected and Bloomberg statistics analysts average expectations of 7% and 4% respectively. Non-US GAAP yields $0.24 per share, and higher expectations are 4 cents lower (largely because of the effect of exchange rates on "other income" subjects), consistent with analysts ' average expectations. Ctrip forecast, the second quarter revenue of 1.582 billion to 1.649 billion yuan (up 33%), operating profit margin flat.

Performance analysis

1 Mobile end has become the main booking platform for Ctrip. The cumulative download volume of Ctrip has reached 120 million times. In the first quarter, the contribution of the application to Ctrip Hotel Reservation volume and the amount of air tickets is 40% and 30% respectively. Many emerging businesses, such as car rentals and train-ticket bookings, have more bookings from mobile terminals than half the total.

2 Hotel Reservation Volume year-on-year growth rate of 67%, set a new record, which is mainly driven by leisure demand. By the end of the first quarter, Ctrip's network had covered about 70,000 domestic hotels and about 430,000 overseas hotels in 190 markets (through cooperation with Priceline). We estimate that more than 90% of the first-quarter hotel bookings for Ctrip come from the core of the post-pay booking service, while others come from group buying, passers-by and business-to-business services.

3 Ctrip upgraded the ticket service to grasp the demand of the ground travel market. Ctrip renamed the Service "Traffic", and the service volume of bookings increased 71%. The opportunities in this area are enormous. Ctrip estimated that 2013 Chinese market car travel reached 30 billion passengers, train travel reached 2 billion people, and air travel only 300 million people.

We will be Ctrip 2014 per share earnings forecast cut 6% to reflect the company's investment in brand and product development, but the 2015 earnings forecast by 3% per cent increase to reflect the prospects for a more robust booking volume. We've raised our 18-month target share price from $45 to $46, which is still based on a 0.9 times-fold increase in market earnings and 2015-2017 annual compound growth of 25%.