Maintain the "neutral" rating of Ctrip stock

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

Ctrip's second-quarter results exceeded Wall Street expectations and gave a strong third-quarter performance forecast. Ctrip expects the third-quarter revenue to grow 20% to 25% year-on-year, above our expected 18%, and 15% to 20% general levels. In the second quarter, operating margins were 24.7%, up from 23.4% in the first quarter and our expected 24%. We continue to maintain the "neutral" rating of Ctrip, which will increase the target share price from 33 US dollars to 40 dollars.

Second-quarter results: Revenue was 203 million dollars, up from Wall Street's expected $190 million trillion. Diluted earnings per share of $0.24 trillion, above Wall Street's expected $0.17 trillion. Ctrip expects revenue from the third quarter to grow 20% to 25% year-on-year, up from the 18% we expected.

Third-quarter operating margin stability: We expect Ctrip's third-quarter operating margin to be flat with the second quarter, and the entire 2013 fiscal year is expected to be 24.5%. Ctrip expects operating margins in the third quarter to be equivalent to about 25% in the second quarter, based on non-US general accounting standards.

Valuation: We continue to maintain the "neutral" rating of Ctrip, which will increase the target share price from 33 US dollars to 40 dollars.