Intrinsic value of Ctrip.com International ADR - CTRP

Previous Close

$55.77

  Intrinsic Value

premium content

  Rating & Target

premium content

  Value-price divergence*

premium content

Previous close

$55.77

 
Intrinsic value premium content
 
Up/down potential premium content
 
Rating premium content
 
Value-price divergence* premium content

Premium access subscription - $499/yr

please register and log in before paying

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of CTRP stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 27.3

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  76.41
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  2,782
  17,437
  26,940
  40,289
  58,457
  82,474
  113,383
  152,193
  199,839
  257,144
  324,793
  403,320
  493,097
  594,348
  707,156
  831,490
  967,223
  1,114,159
  1,272,063
  1,440,678
  1,619,749
  1,809,045
  2,008,366
  2,217,562
  2,436,538
  2,665,260
  2,903,759
  3,152,135
  3,410,554
  3,679,252
  3,958,528
Variable operating expenses, $m
 
  11,923
  15,931
  21,561
  29,223
  39,352
  52,388
  68,756
  88,851
  113,019
  141,550
  170,100
  207,963
  250,665
  298,242
  350,680
  407,925
  469,895
  536,491
  607,604
  683,127
  762,962
  847,026
  935,254
  1,027,607
  1,124,070
  1,224,657
  1,329,409
  1,438,397
  1,551,720
  1,669,504
Fixed operating expenses, $m
 
  1,422
  1,457
  1,494
  1,531
  1,569
  1,608
  1,649
  1,690
  1,732
  1,775
  1,820
  1,865
  1,912
  1,960
  2,009
  2,059
  2,110
  2,163
  2,217
  2,273
  2,330
  2,388
  2,448
  2,509
  2,571
  2,636
  2,702
  2,769
  2,838
  2,909
Total operating expenses, $m
  3,016
  13,345
  17,388
  23,055
  30,754
  40,921
  53,996
  70,405
  90,541
  114,751
  143,325
  171,920
  209,828
  252,577
  300,202
  352,689
  409,984
  472,005
  538,654
  609,821
  685,400
  765,292
  849,414
  937,702
  1,030,116
  1,126,641
  1,227,293
  1,332,111
  1,441,166
  1,554,558
  1,672,413
Operating income, $m
  -234
  4,092
  9,552
  17,234
  27,703
  41,552
  59,386
  81,788
  109,298
  142,392
  181,468
  231,400
  283,269
  341,770
  406,954
  478,801
  557,239
  642,154
  733,409
  830,856
  934,349
  1,043,753
  1,158,952
  1,279,861
  1,406,423
  1,538,618
  1,676,466
  1,820,024
  1,969,388
  2,124,693
  2,286,114
EBITDA, $m
  -130
  9,266
  15,055
  23,200
  34,298
  48,980
  67,886
  91,633
  120,795
  155,876
  197,296
  245,382
  300,363
  362,374
  431,469
  507,626
  590,769
  680,778
  777,507
  880,800
  990,501
  1,106,466
  1,228,576
  1,356,736
  1,490,889
  1,631,014
  1,777,130
  1,929,298
  2,087,621
  2,252,241
  2,423,343
Interest expense (income), $m
  86
  642
  1,915
  3,760
  6,351
  9,878
  14,540
  20,540
  28,073
  37,322
  48,446
  61,578
  76,822
  94,249
  113,904
  135,802
  159,937
  186,285
  214,808
  245,460
  278,191
  312,952
  349,698
  388,390
  428,998
  471,505
  515,904
  562,201
  610,415
  660,579
  712,738
Earnings before tax, $m
  -255
  3,450
  7,637
  13,475
  21,352
  31,675
  44,846
  61,248
  81,224
  105,070
  133,021
  169,822
  206,447
  247,521
  293,051
  343,000
  397,302
  455,868
  518,601
  585,396
  656,158
  730,801
  809,255
  891,471
  977,424
  1,067,113
  1,160,562
  1,257,823
  1,358,973
  1,464,114
  1,573,376
Tax expense, $m
  69
  931
  2,062
  3,638
  5,765
  8,552
  12,108
  16,537
  21,931
  28,369
  35,916
  45,852
  55,741
  66,831
  79,124
  92,610
  107,271
  123,084
  140,022
  158,057
  177,163
  197,316
  218,499
  240,697
  263,905
  288,121
  313,352
  339,612
  366,923
  395,311
  424,812
Net income, $m
  -207
  2,518
  5,575
  9,836
  15,587
  23,123
  32,738
  44,711
  59,294
  76,701
  97,106
  123,970
  150,706
  180,690
  213,927
  250,390
  290,030
  332,784
  378,578
  427,339
  478,995
  533,484
  590,756
  650,774
  713,520
  778,993
  847,210
  918,211
  992,050
  1,068,804
  1,148,565

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  4,709
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  20,893
  146,528
  226,385
  338,559
  491,233
  693,058
  952,795
  1,278,930
  1,679,315
  2,160,871
  2,729,356
  3,389,240
  4,143,671
  4,994,517
  5,942,489
  6,987,312
  8,127,922
  9,362,684
  10,689,605
  12,106,535
  13,611,339
  15,202,057
  16,877,026
  18,634,978
  20,475,111
  22,397,141
  24,401,335
  26,488,527
  28,660,119
  30,918,081
  33,264,940
Adjusted assets (=assets-cash), $m
  16,184
  146,528
  226,385
  338,559
  491,233
  693,058
  952,795
  1,278,930
  1,679,315
  2,160,871
  2,729,356
  3,389,240
  4,143,671
  4,994,517
  5,942,489
  6,987,312
  8,127,922
  9,362,684
  10,689,605
  12,106,535
  13,611,339
  15,202,057
  16,877,026
  18,634,978
  20,475,111
  22,397,141
  24,401,335
  26,488,527
  28,660,119
  30,918,081
  33,264,940
Revenue / Adjusted assets
  0.172
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
Average production assets, $m
  2,625
  18,134
  28,017
  41,900
  60,795
  85,773
  117,918
  158,280
  207,832
  267,429
  337,785
  419,452
  512,821
  618,121
  735,442
  864,750
  1,005,912
  1,158,726
  1,322,946
  1,498,305
  1,684,539
  1,881,407
  2,088,701
  2,306,265
  2,534,000
  2,771,870
  3,019,909
  3,278,220
  3,546,976
  3,826,422
  4,116,869
Working capital, $m
  2,259
  -10,514
  -16,245
  -24,294
  -35,249
  -49,732
  -68,370
  -91,772
  -120,503
  -155,058
  -195,850
  -243,202
  -297,337
  -358,392
  -426,415
  -501,389
  -583,235
  -671,838
  -767,054
  -868,729
  -976,709
  -1,090,854
  -1,211,045
  -1,337,190
  -1,469,233
  -1,607,152
  -1,750,967
  -1,900,737
  -2,056,564
  -2,218,589
  -2,386,992
Total debt, $m
  6,009
  54,714
  107,420
  181,455
  282,220
  415,424
  586,851
  802,100
  1,066,354
  1,384,181
  1,759,381
  2,194,905
  2,692,829
  3,254,387
  3,880,049
  4,569,632
  5,322,434
  6,137,377
  7,013,146
  7,948,319
  8,941,489
  9,991,364
  11,096,843
  12,257,092
  13,471,579
  14,740,119
  16,062,887
  17,440,434
  18,873,684
  20,363,939
  21,912,866
Total liabilities, $m
  10,543
  96,708
  149,414
  223,449
  324,214
  457,418
  628,845
  844,094
  1,108,348
  1,426,175
  1,801,375
  2,236,899
  2,734,823
  3,296,381
  3,922,043
  4,611,626
  5,364,428
  6,179,371
  7,055,140
  7,990,313
  8,983,483
  10,033,358
  11,138,837
  12,299,086
  13,513,573
  14,782,113
  16,104,881
  17,482,428
  18,915,678
  20,405,933
  21,954,860
Total equity, $m
  10,349
  49,819
  76,971
  115,110
  167,019
  235,640
  323,950
  434,836
  570,967
  734,696
  927,981
  1,152,342
  1,408,848
  1,698,136
  2,020,446
  2,375,686
  2,763,493
  3,183,312
  3,634,466
  4,116,222
  4,627,855
  5,168,699
  5,738,189
  6,335,893
  6,961,538
  7,615,028
  8,296,454
  9,006,099
  9,744,440
  10,512,147
  11,310,079
Total liabilities and equity, $m
  20,892
  146,527
  226,385
  338,559
  491,233
  693,058
  952,795
  1,278,930
  1,679,315
  2,160,871
  2,729,356
  3,389,241
  4,143,671
  4,994,517
  5,942,489
  6,987,312
  8,127,921
  9,362,683
  10,689,606
  12,106,535
  13,611,338
  15,202,057
  16,877,026
  18,634,979
  20,475,111
  22,397,141
  24,401,335
  26,488,527
  28,660,118
  30,918,080
  33,264,939
Debt-to-equity ratio
  0.581
  1.100
  1.400
  1.580
  1.690
  1.760
  1.810
  1.840
  1.870
  1.880
  1.900
  1.900
  1.910
  1.920
  1.920
  1.920
  1.930
  1.930
  1.930
  1.930
  1.930
  1.930
  1.930
  1.930
  1.940
  1.940
  1.940
  1.940
  1.940
  1.940
  1.940
Adjusted equity ratio
  0.409
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -207
  2,518
  5,575
  9,836
  15,587
  23,123
  32,738
  44,711
  59,294
  76,701
  97,106
  123,970
  150,706
  180,690
  213,927
  250,390
  290,030
  332,784
  378,578
  427,339
  478,995
  533,484
  590,756
  650,774
  713,520
  778,993
  847,210
  918,211
  992,050
  1,068,804
  1,148,565
Depreciation, amort., depletion, $m
  104
  5,173
  5,503
  5,966
  6,595
  7,428
  8,500
  9,845
  11,497
  13,483
  15,829
  13,982
  17,094
  20,604
  24,515
  28,825
  33,530
  38,624
  44,098
  49,943
  56,151
  62,714
  69,623
  76,875
  84,467
  92,396
  100,664
  109,274
  118,233
  127,547
  137,229
Funds from operations, $m
  1,256
  7,692
  11,078
  15,802
  22,182
  30,551
  41,237
  54,556
  70,791
  90,184
  112,934
  137,952
  167,800
  201,295
  238,442
  279,215
  323,561
  371,408
  422,677
  477,283
  535,147
  596,198
  660,379
  727,649
  797,986
  871,388
  947,874
  1,027,485
  1,110,283
  1,196,351
  1,285,794
Change in working capital, $m
  493
  -3,943
  -5,730
  -8,049
  -10,955
  -14,482
  -18,638
  -23,402
  -28,730
  -34,555
  -40,793
  -47,351
  -54,136
  -61,054
  -68,024
  -74,973
  -81,847
  -88,603
  -95,216
  -101,675
  -107,980
  -114,145
  -120,191
  -126,145
  -132,042
  -137,919
  -143,815
  -149,771
  -155,827
  -162,025
  -168,404
Cash from operations, $m
  763
  16,971
  16,808
  23,851
  33,138
  45,033
  59,875
  77,959
  99,521
  124,739
  153,727
  185,303
  221,936
  262,349
  306,465
  354,188
  405,407
  460,011
  517,893
  578,957
  643,127
  710,343
  780,570
  853,795
  930,029
  1,009,307
  1,091,689
  1,177,255
  1,266,110
  1,358,376
  1,454,197
Maintenance CAPEX, $m
  0
  -378
  -604
  -934
  -1,397
  -2,026
  -2,859
  -3,931
  -5,276
  -6,928
  -8,914
  -11,260
  -13,982
  -17,094
  -20,604
  -24,515
  -28,825
  -33,530
  -38,624
  -44,098
  -49,943
  -56,151
  -62,714
  -69,623
  -76,875
  -84,467
  -92,396
  -100,664
  -109,274
  -118,233
  -127,547
New CAPEX, $m
  -100
  -6,805
  -9,883
  -13,883
  -18,895
  -24,978
  -32,145
  -40,362
  -49,552
  -59,597
  -70,356
  -81,667
  -93,368
  -105,301
  -117,321
  -129,307
  -141,162
  -152,814
  -164,220
  -175,359
  -186,235
  -196,867
  -207,294
  -217,564
  -227,735
  -237,870
  -248,039
  -258,311
  -268,756
  -279,445
  -290,447
Cash from investing activities, $m
  -2,868
  -7,183
  -10,487
  -14,817
  -20,292
  -27,004
  -35,004
  -44,293
  -54,828
  -66,525
  -79,270
  -92,927
  -107,350
  -122,395
  -137,925
  -153,822
  -169,987
  -186,344
  -202,844
  -219,457
  -236,178
  -253,018
  -270,008
  -287,187
  -304,610
  -322,337
  -340,435
  -358,975
  -378,030
  -397,678
  -417,994
Free cash flow, $m
  -2,105
  9,789
  6,320
  9,035
  12,846
  18,029
  24,871
  33,666
  44,693
  58,214
  74,457
  92,376
  114,586
  139,954
  168,540
  200,366
  235,420
  273,666
  315,049
  359,500
  406,949
  457,325
  510,562
  566,607
  625,418
  686,970
  751,254
  818,281
  888,079
  960,698
  1,036,203
Issuance/(repayment) of debt, $m
  1,433
  36,359
  52,706
  74,035
  100,764
  133,205
  171,426
  215,249
  264,255
  317,827
  375,200
  435,524
  497,924
  561,558
  625,662
  689,583
  752,802
  814,943
  875,768
  935,173
  993,171
  1,049,874
  1,105,480
  1,160,248
  1,214,487
  1,268,540
  1,322,768
  1,377,546
  1,433,251
  1,490,255
  1,548,927
Issuance/(repurchase) of shares, $m
  1,572
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  1,778
  36,359
  52,706
  74,035
  100,764
  133,205
  171,426
  215,249
  264,255
  317,827
  375,200
  435,524
  497,924
  561,558
  625,662
  689,583
  752,802
  814,943
  875,768
  935,173
  993,171
  1,049,874
  1,105,480
  1,160,248
  1,214,487
  1,268,540
  1,322,768
  1,377,546
  1,433,251
  1,490,255
  1,548,927
Total cash flow (excl. dividends), $m
  -113
  46,148
  59,026
  83,070
  113,611
  151,233
  196,298
  248,914
  308,948
  376,041
  449,657
  527,900
  612,510
  701,512
  794,202
  889,949
  988,223
  1,088,609
  1,190,817
  1,294,673
  1,400,120
  1,507,199
  1,616,042
  1,726,855
  1,839,906
  1,955,510
  2,074,023
  2,195,827
  2,321,330
  2,450,953
  2,585,129
Retained Cash Flow (-), $m
  -3,904
  -18,776
  -27,152
  -38,139
  -51,909
  -68,621
  -88,311
  -110,886
  -136,131
  -163,729
  -193,285
  -224,361
  -256,506
  -289,288
  -322,311
  -355,240
  -387,807
  -419,819
  -451,153
  -481,756
  -511,633
  -540,844
  -569,490
  -597,704
  -625,645
  -653,490
  -681,426
  -709,645
  -738,341
  -767,707
  -797,932
Prev. year cash balance distribution, $m
 
  13,508
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  40,880
  31,875
  44,930
  61,702
  82,613
  107,987
  138,029
  172,817
  212,312
  256,372
  303,539
  356,004
  412,225
  471,891
  534,709
  600,416
  668,790
  739,663
  812,917
  888,486
  966,355
  1,046,552
  1,129,152
  1,214,261
  1,302,020
  1,392,597
  1,486,182
  1,582,989
  1,683,246
  1,787,197
Discount rate, %
 
  4.90
  5.15
  5.40
  5.67
  5.96
  6.25
  6.57
  6.89
  7.24
  7.60
  7.98
  8.38
  8.80
  9.24
  9.70
  10.19
  10.70
  11.23
  11.79
  12.38
  13.00
  13.65
  14.33
  15.05
  15.80
  16.59
  17.42
  18.29
  19.21
  20.17
PV of cash for distribution, $m
 
  38,970
  28,832
  38,370
  49,482
  61,861
  75,042
  88,435
  101,376
  113,183
  123,222
  130,427
  135,529
  137,713
  136,936
  133,327
  127,169
  118,862
  108,887
  97,771
  86,042
  74,199
  62,680
  51,849
  41,975
  33,237
  25,723
  19,443
  14,339
  10,309
  7,218
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Ctrip.com International, Ltd., together with its subsidiaries, provides travel service for accommodation reservation, transportation ticketing, packaged tours, and corporate travel management in the People’s Republic of China. The company operates as an agent for hotel-related transactions; sells air tickets; and other related services, including sale of aviation and train insurance, air-ticket delivery services, online check-in, and other value-added services, such as online seat selection and flight dynamics. It also provides independent leisure travelers bundled packaged-tour products comprising group tours, semi-group tours, and private tours or packaged tours with various transportation arrangements, such as cruise, bus, and self-driving. In addition, the company offers integrated transportation and accommodation services; various value-added services, such as transportation at destinations and tickets, insurance, visa services, and tour guides; supplier management and customer relationship management services; and car rental services. Further, it provides travel data collection and analysis, industry benchmark, cost saving analysis, and travel management solutions; Corporate Travel Management System, an online platform that integrates information maintenance, online booking and authorization, online enquiry, and travel report system. Additionally, the company offers online advertising services; and sells Property Management System, as well as provides related maintenance services. Ctrip.com International, Ltd. was founded in 1999 and is headquartered in Shanghai, the People’s Republic of China.

FINANCIAL RATIOS  of  Ctrip.com International ADR (CTRP)

Valuation Ratios
P/E Ratio -17.3
Price to Sales 1.3
Price to Book 0.3
Price to Tangible Book
Price to Cash Flow 4.7
Price to Free Cash Flow 5.4
Growth Rates
Sales Growth Rate 76.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 5.3%
Cap. Spend. - 3 Yr. Gr. Rate 1.2%
Financial Strength
Quick Ratio 5
Current Ratio 0.1
LT Debt to Equity 48.4%
Total Debt to Equity 58.1%
Interest Coverage -2
Management Effectiveness
Return On Assets -0.5%
Ret/ On Assets - 3 Yr. Avg. 1.3%
Return On Total Capital -1.5%
Ret/ On T. Cap. - 3 Yr. Avg. 1.7%
Return On Equity -2.5%
Return On Equity - 3 Yr. Avg. 3.2%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 75.4%
Gross Margin - 3 Yr. Avg. 73%
EBITDA Margin -2.3%
EBITDA Margin - 3 Yr. Avg. 11.7%
Operating Margin -8.4%
Oper. Margin - 3 Yr. Avg. -2.4%
Pre-Tax Margin -9.2%
Pre-Tax Margin - 3 Yr. Avg. 6.8%
Net Profit Margin -7.4%
Net Profit Margin - 3 Yr. Avg. 6.3%
Effective Tax Rate -27.1%
Eff/ Tax Rate - 3 Yr. Avg. 27.9%
Payout Ratio 0%

CTRP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CTRP stock intrinsic value calculation we used $10898 million for the last fiscal year's total revenue generated by Ctrip.com International ADR. The default revenue input number comes from 2016 income statement of Ctrip.com International ADR. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our CTRP stock valuation model: a) initial revenue growth rate of 60% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.9%, whose default value for CTRP is calculated based on our internal credit rating of Ctrip.com International ADR, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Ctrip.com International ADR.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of CTRP stock the variable cost ratio is equal to 84.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1387 million in the base year in the intrinsic value calculation for CTRP stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Ctrip.com International ADR.

Corporate tax rate of 27% is the nominal tax rate for Ctrip.com International ADR. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the CTRP stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for CTRP are equal to 104%.

Life of production assets of 111.1 years is the average useful life of capital assets used in Ctrip.com International ADR operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for CTRP is equal to -60.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $44551 million for Ctrip.com International ADR - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 489.033 million for Ctrip.com International ADR is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Ctrip.com International ADR at the current share price and the inputted number of shares is $27.3 billion.


Premium access subscription - $499/yr

please register and log in before paying
RELATED COMPANIES Price Int.Val. Rating
PCLN Priceline Grou 1,862.93 prem.  prem.
EXPE Expedia 152.00 prem.  prem.
TZOO Travelzoo 10.40 prem.  prem.
TOUR Tuniu ADR 8.19 prem.  prem.
MMYT MakeMyTrip 31.85 prem.  prem.
TRIP TripAdvisor 35.74 prem.  prem.
CEA China Eastern 29.59 prem.  prem.

COMPANY NEWS

▶ Chinese Tourism Giant Ctrip Looks to Go Global   [Jun-14-17 12:56AM  The Wall Street Journal]
▶ Why These 4 Tech Stocks May Beat Apple, Facebook   [Jun-13-17 06:15PM  Investopedia]
▶ Chinese Tourism Giant Ctrip Looks to Go Global   [01:59PM  The Wall Street Journal]
▶ [$$] Ctrip.com: We Can Grow at Home and Overseas   [Jun-09-17 05:18AM  The Wall Street Journal]
▶ [$$] 5 Tech Stocks for the Long Run   [Jun-06-17 07:26AM  Barrons.com]
▶ 3 Top Stocks for Your IRA in May   [01:04PM  Motley Fool]
▶ [$$] Chinese Travel Site Ctrip Looks to Tap Overseas Cash Stash for Deals   [May-12-17 12:53PM  The Wall Street Journal]
▶ Ctrip: Buy the Dip?   [May-11-17 11:19PM  Barrons.com]
▶ Ctrip.Com tops Street 1Q forecasts   [07:44PM  Associated Press]
▶ Ctrip International Falls Short On First-Quarter Earnings   [07:40PM  Investor's Business Daily]
▶ Top Chinese Internets Autohome, YY Earnings Top Views   [08:51AM  Investor's Business Daily]
▶ Will Snap, China's Internet Stocks Leap Like JD? Investing Action Plan   [May-09-17 04:43PM  Investor's Business Daily]
▶ MakeMyTrip Limited Announces $330 Million Equity Financing   [May-02-17 04:32PM  GlobeNewswire]
▶ 5 Consumer Service Stocks to Buy in 2017   [May-01-17 05:36PM  Motley Fool]
▶ Ctrip.com Is Soaring: Must-See Chart   [02:43PM  TheStreet.com]
▶ Ctrip Filed 2016 Annual Report on Form 20-F   [Apr-13-17 04:05PM  PR Newswire]
▶ How Analysts View Priceline in 2017 and Beyond   [Mar-08-17 07:36AM  Market Realist]
▶ 6 Things You Didn't Know About Baidu, Inc.   [Mar-06-17 01:37PM  Motley Fool]
▶ China Internet: Morgan Stanley's Top Picks For 2017   [Feb-23-17 07:57PM  at Barrons.com]
▶ Ctrip Enlists Women in Drive to Create a Travel Giant   [Feb-13-17 04:00PM  at Bloomberg]
▶ Ctrip: It's Time to Buy   [Feb-08-17 11:16PM  at Barrons.com]
▶ 3 Chinese Stocks That Could Grow the Most in 2017   [Feb-07-17 11:00AM  at Motley Fool]
▶ [$$] China's Ctrip.com: Not Time to Check Out Yet   [Jan-28-17 12:01AM  at Barrons.com]
▶ Why China's Ctrip Can Rise 35% in 2017   [Dec-30-16 12:31PM  at Barrons.com]
▶ Investors: Time to Check In to Expedia and Priceline   [Dec-21-16 07:00AM  at Morningstar]
Stock chart of CTRP Financial statements of CTRP Annual reports of CTRP
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

VALUATION THEORY       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2017. All rigths reserved.