not vested
Ctrip: Profit Margin At 2013 High; Morgan Stanley Raises Price Target By Shuli Ren
China’s online travel agent Ctrip.com (CTRP) reported better-than-expected December quarter earnings.
Revenue at Ctrip grew 75.1% from a year ago to 5.6 billion yuan, at the high-end of its 70-75% growth guidance.
Operating margin came in at 18%, well above the street estimate of 14%, the highest level since 2013.
Morgan Stanley lifted its price target to $57 from $52 previously, seeing another 20% upside.
Analyst Amanda Chen wrote:
Operating income beat MSe mainly due to better than expected gross margin, which reached 78% in Q4, 3ppt higher than MSe; mgmt expects it will maintain at ~78% and might improve gradually in the long term.
Ctrip will be cautious on headcount increase in 2017, but investment for brand promotion and hotel coupons in lower tier cities and low end hotels will continue.
We raise our 2017/2018 revenue forecasts by 5%/5% and lift non-GAAP operating margin estimates by 2.4ppt/1.6ppt to 18%/23%, which drive the 10%/1.4% increases in our 2017/18e EPS.
The stock is now trading at
26.5x non-GAAP PE for 2018, vs ~19x for vertical peers – we think this premium is deserved due to the company’s dominant position in OTA market, its solid growth rate and fast margin improvement.
Ctrip has already risen 19% this year, part of the spectacular rally staged by Chinese stocks.
Source: Barron's Asia
http://blogs.barrons.com/asiastocks/201 ... ce-target/
It's all about "how much you made when you were right" & "how little you lost when you were wrong"