Morgan Stanley Overweight On Ctrip.com (CTRP)

Morgan Stanley has an Overweight rating on shares of Ctrip.com CTRP after the company reported earnings. In a note to investors, Morgan Stanley writes, "Our DCF value of US$53.4 per share implies ~15% share price upside. Notably: 1) Ctrip captures half of China's online travel market, yet has only serviced ~3% of the Chinese Internet population to date, implying ample upside. Increasing online transaction (40%+ of total sales now, vs ~30% a year ago) may further improve Ctrip's scalability and profitability. 2) As one of the best run companies, Ctrip has been outgrowing China's travel market by 2-3 times throughout the economic cycles. 3) We believe the overall sales impact from high-speed railway should be manageable (less than 5%), while Ctrip should continue to differentiate itself against competitors by offering high service quality as a ‘pure play' travel service leader." Shares of CTRP lost $1.16 yesterday to close at $46.36, a loss of 2.44%.