US bank Merrill Lynch keeps Ctrip neutral rating up to 24 dollars

News and Information http://www.aliyun.com/zixun/aggregation/17197.html "> Beijing time January 8, BofA Merrill Lynch has issued an investment report to maintain the" neutral "rating of Ctrip, and the target share price from 23.50 U.S. dollars to 24.30 dollars.

Bank of America Merrill Lynch believes that Ctrip will continue to face the pressure of profit margins. However, due to the improvement in the industry environment, Ctrip will be in the 2013 fiscal year and 2014 per share of diluted earnings expected to increase by 2% and 5% respectively.

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

Compared with the first half of 2012, the tourism market in the second half of 2012 showed a moderate rebound. In October and November, however, the number of airline passengers rose again. As the competition continues, BofA Merrill Lynch expects Ctrip to continue to face margin pressure. As the industry environment improved, BofA Merrill Lynch will be in the 2013 fiscal year and 2014 per share of diluted earnings forecast increased by 2% and 5% respectively, the target price from 23.50 U.S. dollars to 24.30 U.S. dollars.

Data from the fourth quarter of 2012 showed that the overall tourism market was rebounding, but could not be called "turning point". The Bank of America Merrill Lynch believes that Ctrip will win a share of the offline market, but the price war will lead to growth in marketing spending and to the relatively sensitive mass market, which would bring Ctrip a profit margin pressure. BofA Merrill Lynch believes that in the next few quarters, Ctrip's profitability will gradually recover. The Bank of America Merrill Lynch expects Ctrip to moderate its profit margins in the fourth quarter of 2012 and the first quarter of 2013, while slow recovery in the second half of 2013.

Moderate rebound in tourism market

Data from the three major airlines showed a rebound in the tourism market in the second half of 2012. The second half of the year, the three major airline passenger volume increased 6.3%, the chain growth of 4.3%.

Coupon Promotions tend to stabilize

Bank of America Merrill Lynch believes that in order to ensure market share, including Ctrip and other competitors will continue to promote coupon promotions, but the strength will stabilize.

Valuation

BofA Merrill maintained the "neutral" share of Ctrip, bringing its target share price from $23.50 to $24.30.