1、Please refer to page 9 for important disclosures and analyst certification,or on our website STATES CTRP US Outperform Price(at 04:15,31 Aug 2017 GMT)US$52.72 Valuation US$64.00 -PER12-month target US$64.00 12-month TSR%+21.4 GICS sector Retailing Market cap US$m 27,607 30-day avg turnover US$m 270.
2、4 Number shares on issue m 523.7 Investment fundamentals Year end 31 Dec 2016A 2017E 2018E 2019E Revenue m 19,228 27,139 34,305 42,770 EBIT m-1568 2,709 5,864 9,991 Reported profit m-1431 1,146 4,164 7,571 Adjusted profit m 2,129 3,548 6,845 10,221 Gross cashflow m 2,848 4,360 7,676 11,077 CFPS Rmb
3、5.76 7.83 13.41 19.02 CFPS growth%44.6 36.0 71.2 41.9 PGCFPS x 60.4 44.4 25.9 18.3 EPS adj Rmb 4.05 6.37 11.95 17.55 EPS adj growth%38.5 57.2 87.6 46.8 PER adj x 85.8 54.6 29.1 19.8 Total DPS Rmb 0.00 0.00 0.00 0.00 Total div yield%0.0 0.0 0.0 0.0 ROA%1.5 3.4 5.3 7.7 ROE%3.7 4.7 8.4 11.7 EV/EBITDA x
4、-204.8 51.6 27.9 17.5 Net debt/equity%9.6-2.3-10.2-20.6 P/BV x 2.5 2.3 2.3 2.1 CTRP US vs S&P 500,&rec history Note:Recommendation timeline-if not a continuous line,then there was no Macquarie coverage at the time or there was an embargo period.Source:FactSet,Macquarie Research,August 2017(all figur
5、es in Rmb unless noted,TP in USD)Analyst(s)Macquarie Capital Limited Wendy Huang,CFA +852 3922 3378 Ivy Luo +852 3922 1507 Macquarie Capital Limited,Taiwan Securities Branch Marcus Yang+886 2 2734 7532 31 August 2017 C International Intl strategy to mitigate domestic risk Conclusion 2Q17 revenue and
6、 non-GAAP net profit beat consensus by 3%/26%on solidrevenue growth and better-than-expected margin expansion with non-GAAPGPM and OPM expanding 10ppts/14ppts YoY to 82%/18,respectively.Stronginternational business growth stood out and accounted for c.40%of Ctrips 2Q airticket revenue while user tra
7、ffic from lower-tier cities sharply improved.We believestrong execution of its international expansion and lower-tier city penetration willhelp mitigate short-term regulation risk.Factoring in the negative regulatory impact,Ctrip guides to 3540%YoY revenue growth in 3Q17,in line with consensus.Werei
8、terate our OP rating,and trim our TP to US$64 from US$67 on 1.0 x PEG and37%FY18-21e earnings CAGR,as we cut FY18 EPS by 4%.Impact 2Q17 earnings beat.Net revenue increased 45%YoY to Rmb6.4bn,2%/3%ahead of MQ/consensus on strong transportation growth.Transportation revenuegrew 49%YoY to Rmb3.0bn,driv
9、en by Skyscanner consolidation and triple-digitgrowth in train/bus/car rental.Accommodation increased 30%YoY to Rmb2.3bn ona rise in reservation volume;and corporate travel growth accelerated to 36%YoY,ahead of the companys 15-25%YoY guidance.Non-GAAP net profit came in atRmb855m,26%above consensus
10、on improving efficiency.International ticketing to mitigate regulatory risk.While Ctrip expects to see anegative impact from the recent CAAC regulation on bundle sales,we believe itsinternational business which now accounts for c.40%of air ticket revenue willhelp mitigate the regulatory impact on do
11、mestic ticketing.In 2Q,Ctrips internationaltransportation revenue outperformed domestic achieving greater than 50%YoYgrowth,much higher than the 2%YoY growth for international air travel reported byTravelsky.Following consolidation,Skyscanner launched direct booking,and theconversion rate of its mob
12、ile traffic rose by 50%.Skyscanner contributed a mid-to-high single digit of Ctrips total revenue.Strengthen lower-tier city penetration.Ctrip targets to further gain market sharein lower-tier cities through a branding campaign and comprehensive productoffering.As of June-17,Ctrip covered 570k domes
13、tic hotels,up 25%YoY;and thecompany reported accelerating growth in lower tier city hotel bookings room nightbookings in lower-tier cities reached 20m in July.User traffic of lower tier cities rose50%YoY in the quarter.For better penetration of lower-tier cities,Ctrip is buildingup its franchised of
14、fline network,and aims to have 6,500 offline stores by end-FY17,up from the current 5,500.Ctrip and Qunar had opened 400+offline storesby the end of 2Q,and targets 600 stores by year-end.Margin expansion ahead of expectation.GPM rose 10ppts YoY and 2ppts QoQto 82%,ahead of MQ and consensus.This was
15、due to 1)margin lift fromSkyscanner,2)rising revenue contribution from high-margin small business units,and 3)improving efficiency with automation and AI assisted chat-box,which forexample handles over 40%of booking inquires.We see further profitability gainsand forecast non-GAAP OPM to rise to 19%/
16、25%in FY17/18 from 10%in FY16.Earnings and target price revision We trim our FY17/18 revenue by 1%/4%on regulatory impacts,and cut non-GAAP earnings by 11%/5%due mainly to higher tax expense.We lower ourTP to US$64 on 1.0 x PEG and 37%FY18-21 earnings CAGR(unchanged.)Price catalyst 12-month price target:US$64.00 based on a PER methodology.Catalyst:Margin recovery,and synergies with SkyscannerAction and recommendation Reiterate OutperformMacquarie Research C International 31 August 2017 2 Analysi