Morgan Stanley downgraded Ctrip to a 42.3 dollar target

Sina Science and technology news Beijing time, August 1 night, Morgan Stanley published its investment report today, the NASDAQ:CTRP-Ctrip rating from "overweight" to "hold the sidelines", but the target price of 30.10 U.S. dollars to increase to 42.30 U.S. dollars.

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

Ctrip released a strong second-quarter earnings, and gave an upbeat third-quarter performance forecast, largely thanks to accelerated revenue growth and rapid profitability recovery, but that was expected. We will be the Ctrip stock rating from "overweight" to "hold the sidelines", the target price of 30.10 U.S. dollars to increase to 42.30 U.S. dollars.

Ctrip expects the third-quarter revenue to rise nearly 20% to 25% per cent of the guideline, and our initial estimate is 22%. The profit margin of Ctrip improved in the second quarter, thanks to the acceleration of revenue growth and operating leverage. Ctrip expects full-year operating margins of 2013 to reach 24% to 25%, up from 20% to 25% previously expected.

Due to rapid market share growth and profitability recovery, we will be ctrip in the 2013 fiscal year and 2014 per share of diluted earnings forecasts are increased by 11% and 15% respectively.

Ctrip's 12-month P/E ratio is more than 30 times, and as a result of higher valuations, we have downgraded its stock rating to "hold-see". The aim of the higher target share price is to reflect the increase in fiscal year 2013 and 2014 fiscal year diluted earnings forecasts and lower discount rates.

We believe that Ctrip's previous investment is being rewarded and, given its market leadership, we are confident that Ctrip will continue to benefit from the fast-growing Chinese tourism market.

We will be the Ctrip stock rating from "overweight" to "hold the sidelines", the target price of 30.10 U.S. dollars to increase to 42.30 U.S. dollars. (Li Ming)