Ctrip.com tipped to "consistently" outperform investor's expectations

Ctrip.com is expected to continue to broaden its leadership position within the travel agency industry by taking share from smaller players, leveraging its solid service-oriented execution, expanding business aggressively while implementing disciplined cost controls, according to an analyst.

Published: 06 Feb 2008

Ctrip.com is expected to continue to broaden its leadership position within the travel agency industry by taking share from smaller players, leveraging its solid service-oriented execution, expanding business aggressively while implementing disciplined cost controls, according to an analyst.

Leah Hao, an analyst, expects Ctrip.com to "consistently" outperform investor's expectations over the next few quarters, driven by its expansion into lower-tier cities for hotel booking business, continued strong growth in volume for air ticketing, increase in packaged tours with travel restrictions lifted for US and potentially Taiwan, and momentum in corporate travel.

"Additionally, [the company's] long range initiatives such as inbound travel could bear fruit in the coming years," Hao reportedly said.

Shares of Ctrip.com International Ltd. rose Monday after the China-based online travel service provider was upgraded to buy from neutral at Goldman Sachs, which said secular consolidation trends among travel-related resources will more than offset the cyclical slowdown risk. Goldman Sachs also raised its 12-month price target on the stock to $67 from $50.

According to tradingmarkets.com, for 2007, Goldman Sachs raised its adjusted earnings estimate by 1% to 89 cents a share. The firm also raised its 2008 adjusted earnings outlook by 3% to $1.30 a share, and 2009 outlook by 10% to $1.91 a share.

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