j.p.morgan-携程ctrp首次覆盖报告

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1、AsiaPacificEquityResearch30August2013InitiationNeutralCtrip.comInternational,LtdCTRP,CTRPUSPrice:$47.22Stabilizedcompetitiveenvironment+fullypricedinPriceTarget:$44.00marginexpansion=NeutralWeinitiatecoverageonCtripwithaNeutralratingandaJun-14PTofChinaUSD44

2、.Theintensivecoupon-basedpricecompetitionwithinChina’sOTAInternetmarkethaseasedsincelate2012.WebelieveCtripislikelytoseecontinuedACAlexYaomarginimprovementoverthenextfewyears,drivenby:1)amorebenign(852)28008535competitiveenvironment,and2)increasingprofitabi

3、lityofprojectsthatarealex.c.yao@jpmorgan.comcurrentlyunderincubation(e.g.Tujia,etc).3)higherreturnofuseracquisitionJ.P.MorganSecurities(AsiaPacific)Limitedcostofmobileusers.PricePerformanceStructuralgrowthopportunityinChina’sonlinetravelmarketduetolowpenet

4、rationrateofonlinetravelactivity(22%vs.60-80%forother45popularonlineactivities).Weexpectleisuretraveltoleadthemarket35$growthoverthenext3-5years.25Growingbargainingpowerduetoincreasingscale.Inourview,Ctrip’s15couponstrategynotonlyrebalancesOTAmarketdynamic

5、butsignificantlyAug-12Nov-12Feb-13May-13Aug-13CTRPshareprice($)drivesupCtrip’shotelvolumegrowth.Withalargerhotelvolume,Ctrip’sCCMP(rebased)bargainingpowerinrelationtohotelsincreases.YTD1m3m12mAbs103.936.4%49.1%172.0RisksUpsiderisksincludeMarginsarelikelyto

6、recoverbetterthan%%Rel86.4%34.2%43.4%152.2expectedif1)couponcompetitioncontinuestoebb,2)incubatedprojects%narrowlossormakeaprofit;volumegrowthdrivenbycouponinitiativesinthepast12monthleadstostrongerrecurringtrafficand3)efficientmobileuseracquisitionstrategy

7、leadstolowermarketingexpenses.Downsiderisksinclude:Weexpecttheair-ticketcommissionratetograduallytrenddowninthelongrun,asairlinesexpandtheirdirectsales.CompletionagainstotherOTAandnon-OTAmodels.NeutralratingwithaJun-14PTofUS$44,basedon2014Enon-GAAPFDEPADSo

8、fUSD1.85,FY14-16EEPADSCAGRof24%andaPEGof1.0x.PTimplies24x2014E/PE.PTfactorsinastabilizedChinatravelmarketandCtrip’simprovingmarginoutlook.Keythingsthatinvestorsshouldmonitorare:competitioninleisuretrav