Intrinsic value of Ctrip.com International ADR - CTRP

Previous Close

$43.34

  Intrinsic Value

$128.50

stock screener

  Rating & Target

str. buy

+196%

Previous close

$43.34

 
Intrinsic value

$128.50

 
Up/down potential

+196%

 
Rating

str. buy

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 22.7

 

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
  45.50
  41.45
  37.81
  34.52
  31.57
  28.91
  26.52
  24.37
  22.43
  20.69
  19.12
  17.71
  16.44
  15.29
  14.27
  13.34
  12.50
  11.75
  11.08
  10.47
  9.92
  9.43
  8.99
  8.59
  8.23
  7.91
  7.62
  7.36
  7.12
  6.91
Revenue, $m
  2,782
  4,048
  5,726
  7,890
  10,614
  13,965
  18,003
  22,779
  28,330
  34,685
  41,862
  49,867
  58,698
  68,347
  78,800
  90,041
  102,051
  114,812
  128,308
  142,523
  157,446
  173,071
  189,394
  206,418
  224,148
  242,596
  261,780
  281,719
  302,439
  323,972
  346,350
Variable operating expenses, $m
 
  3,533
  4,662
  6,118
  7,951
  10,205
  12,921
  16,134
  19,868
  24,143
  28,971
  33,545
  39,486
  45,977
  53,009
  60,570
  68,650
  77,234
  86,313
  95,875
  105,914
  116,425
  127,405
  138,857
  150,784
  163,194
  176,099
  189,512
  203,451
  217,935
  232,989
Fixed operating expenses, $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
Total operating expenses, $m
  3,016
  3,533
  4,662
  6,118
  7,951
  10,205
  12,921
  16,134
  19,868
  24,143
  28,971
  33,545
  39,486
  45,977
  53,009
  60,570
  68,650
  77,234
  86,313
  95,875
  105,914
  116,425
  127,405
  138,857
  150,784
  163,194
  176,099
  189,512
  203,451
  217,935
  232,989
Operating income, $m
  -234
  514
  1,064
  1,772
  2,664
  3,760
  5,082
  6,645
  8,462
  10,542
  12,891
  16,321
  19,212
  22,370
  25,791
  29,471
  33,401
  37,578
  41,995
  46,648
  51,532
  56,646
  61,989
  67,561
  73,364
  79,402
  85,681
  92,207
  98,989
  106,036
  113,361
EBITDA, $m
  -130
  1,452
  2,054
  2,830
  3,808
  5,010
  6,458
  8,171
  10,163
  12,443
  15,017
  17,889
  21,057
  24,518
  28,268
  32,301
  36,609
  41,187
  46,028
  51,128
  56,481
  62,087
  67,942
  74,049
  80,410
  87,028
  93,909
  101,062
  108,495
  116,220
  124,248
Interest expense (income), $m
  86
  175
  327
  529
  789
  1,116
  1,518
  2,003
  2,576
  3,243
  4,006
  4,867
  5,828
  6,888
  8,047
  9,302
  10,651
  12,093
  13,625
  15,246
  16,952
  18,744
  20,620
  22,580
  24,623
  26,752
  28,967
  31,270
  33,664
  36,152
  38,737
Earnings before tax, $m
  -255
  339
  736
  1,243
  1,875
  2,645
  3,564
  4,642
  5,886
  7,300
  8,886
  11,454
  13,384
  15,482
  17,745
  20,169
  22,750
  25,485
  28,370
  31,402
  34,580
  37,902
  41,369
  44,981
  48,740
  52,650
  56,714
  60,937
  65,325
  69,885
  74,624
Tax expense, $m
  69
  92
  199
  336
  506
  714
  962
  1,253
  1,589
  1,971
  2,399
  3,093
  3,614
  4,180
  4,791
  5,446
  6,143
  6,881
  7,660
  8,479
  9,337
  10,234
  11,170
  12,145
  13,160
  14,216
  15,313
  16,453
  17,638
  18,869
  20,149
Net income, $m
  -207
  247
  538
  908
  1,369
  1,931
  2,602
  3,389
  4,297
  5,329
  6,486
  8,362
  9,770
  11,302
  12,953
  14,723
  16,608
  18,604
  20,710
  22,924
  25,243
  27,669
  30,199
  32,836
  35,581
  38,435
  41,401
  44,484
  47,687
  51,016
  54,476

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
  23,534
  33,289
  45,873
  61,711
  81,194
  104,671
  132,434
  164,709
  201,660
  243,384
  289,923
  341,266
  397,365
  458,140
  523,494
  593,321
  667,514
  745,976
  828,621
  915,386
  1,006,227
  1,101,129
  1,200,102
  1,303,185
  1,410,444
  1,521,975
  1,637,900
  1,758,368
  1,883,556
  2,013,665
Adjusted assets (=assets-cash), $m
  16,184
  23,534
  33,289
  45,873
  61,711
  81,194
  104,671
  132,434
  164,709
  201,660
  243,384
  289,923
  341,266
  397,365
  458,140
  523,494
  593,321
  667,514
  745,976
  828,621
  915,386
  1,006,227
  1,101,129
  1,200,102
  1,303,185
  1,410,444
  1,521,975
  1,637,900
  1,758,368
  1,883,556
  2,013,665
Revenue / Adjusted assets
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
  0.172
Average production assets, $m
  2,625
  3,817
  5,399
  7,440
  10,009
  13,169
  16,977
  21,480
  26,715
  32,708
  39,476
  47,024
  55,352
  64,451
  74,309
  84,909
  96,234
  108,268
  120,994
  134,399
  148,472
  163,206
  178,599
  194,652
  211,371
  228,768
  246,858
  265,661
  285,200
  305,505
  326,608
Working capital, $m
  2,259
  -2,113
  -2,989
  -4,119
  -5,541
  -7,290
  -9,398
  -11,890
  -14,788
  -18,106
  -21,852
  -26,030
  -30,640
  -35,677
  -41,134
  -47,001
  -53,271
  -59,932
  -66,977
  -74,397
  -82,187
  -90,343
  -98,864
  -107,750
  -117,005
  -126,635
  -136,649
  -147,057
  -157,873
  -169,113
  -180,795
Total debt, $m
  6,009
  9,350
  15,105
  22,530
  31,874
  43,370
  57,221
  73,601
  92,643
  114,444
  139,062
  166,520
  196,812
  229,910
  265,768
  304,327
  345,524
  389,298
  435,591
  484,351
  535,543
  589,139
  645,131
  703,525
  764,344
  827,627
  893,430
  961,826
  1,032,902
  1,106,763
  1,183,527
Total liabilities, $m
  10,543
  13,885
  19,640
  27,065
  36,409
  47,905
  61,756
  78,136
  97,178
  118,979
  143,597
  171,055
  201,347
  234,445
  270,303
  308,862
  350,059
  393,833
  440,126
  488,886
  540,078
  593,674
  649,666
  708,060
  768,879
  832,162
  897,965
  966,361
  1,037,437
  1,111,298
  1,188,062
Total equity, $m
  10,349
  9,649
  13,648
  18,808
  25,301
  33,290
  42,915
  54,298
  67,531
  82,681
  99,788
  118,868
  139,919
  162,920
  187,837
  214,633
  243,262
  273,681
  305,850
  339,735
  375,308
  412,553
  451,463
  492,042
  534,306
  578,282
  624,010
  671,539
  720,931
  772,258
  825,603
Total liabilities and equity, $m
  20,892
  23,534
  33,288
  45,873
  61,710
  81,195
  104,671
  132,434
  164,709
  201,660
  243,385
  289,923
  341,266
  397,365
  458,140
  523,495
  593,321
  667,514
  745,976
  828,621
  915,386
  1,006,227
  1,101,129
  1,200,102
  1,303,185
  1,410,444
  1,521,975
  1,637,900
  1,758,368
  1,883,556
  2,013,665
Debt-to-equity ratio
  0.581
  0.970
  1.110
  1.200
  1.260
  1.300
  1.330
  1.360
  1.370
  1.380
  1.390
  1.400
  1.410
  1.410
  1.410
  1.420
  1.420
  1.420
  1.420
  1.430
  1.430
  1.430
  1.430
  1.430
  1.430
  1.430
  1.430
  1.430
  1.430
  1.430
  1.430
Adjusted equity ratio
  0.409
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -207
  247
  538
  908
  1,369
  1,931
  2,602
  3,389
  4,297
  5,329
  6,486
  8,362
  9,770
  11,302
  12,953
  14,723
  16,608
  18,604
  20,710
  22,924
  25,243
  27,669
  30,199
  32,836
  35,581
  38,435
  41,401
  44,484
  47,687
  51,016
  54,476
Depreciation, amort., depletion, $m
  104
  938
  990
  1,058
  1,144
  1,249
  1,376
  1,526
  1,701
  1,901
  2,126
  1,567
  1,845
  2,148
  2,477
  2,830
  3,208
  3,609
  4,033
  4,480
  4,949
  5,440
  5,953
  6,488
  7,046
  7,626
  8,229
  8,855
  9,507
  10,184
  10,887
Funds from operations, $m
  1,256
  1,185
  1,528
  1,966
  2,513
  3,180
  3,978
  4,915
  5,998
  7,229
  8,613
  9,929
  11,615
  13,450
  15,430
  17,553
  19,815
  22,213
  24,743
  27,404
  30,193
  33,109
  36,153
  39,325
  42,626
  46,060
  49,630
  53,339
  57,194
  61,199
  65,363
Change in working capital, $m
  493
  -661
  -876
  -1,130
  -1,422
  -1,749
  -2,108
  -2,493
  -2,898
  -3,318
  -3,746
  -4,178
  -4,610
  -5,037
  -5,457
  -5,868
  -6,269
  -6,661
  -7,045
  -7,420
  -7,790
  -8,156
  -8,521
  -8,886
  -9,255
  -9,630
  -10,014
  -10,408
  -10,816
  -11,240
  -11,682
Cash from operations, $m
  763
  1,846
  2,404
  3,096
  3,935
  4,929
  6,086
  7,408
  8,896
  10,547
  12,359
  14,108
  16,225
  18,487
  20,887
  23,421
  26,085
  28,874
  31,788
  34,824
  37,983
  41,265
  44,673
  48,211
  51,881
  55,690
  59,643
  63,747
  68,010
  72,439
  77,044
Maintenance CAPEX, $m
  0
  -87
  -127
  -180
  -248
  -334
  -439
  -566
  -716
  -891
  -1,090
  -1,316
  -1,567
  -1,845
  -2,148
  -2,477
  -2,830
  -3,208
  -3,609
  -4,033
  -4,480
  -4,949
  -5,440
  -5,953
  -6,488
  -7,046
  -7,626
  -8,229
  -8,855
  -9,507
  -10,184
New CAPEX, $m
  -100
  -1,193
  -1,582
  -2,041
  -2,569
  -3,160
  -3,808
  -4,503
  -5,235
  -5,993
  -6,768
  -7,548
  -8,328
  -9,099
  -9,857
  -10,600
  -11,326
  -12,034
  -12,726
  -13,405
  -14,073
  -14,734
  -15,393
  -16,053
  -16,720
  -17,397
  -18,090
  -18,803
  -19,540
  -20,305
  -21,103
Cash from investing activities, $m
  -2,868
  -1,280
  -1,709
  -2,221
  -2,817
  -3,494
  -4,247
  -5,069
  -5,951
  -6,884
  -7,858
  -8,864
  -9,895
  -10,944
  -12,005
  -13,077
  -14,156
  -15,242
  -16,335
  -17,438
  -18,553
  -19,683
  -20,833
  -22,006
  -23,208
  -24,443
  -25,716
  -27,032
  -28,395
  -29,812
  -31,287
Free cash flow, $m
  -2,105
  566
  694
  875
  1,118
  1,436
  1,839
  2,339
  2,945
  3,663
  4,501
  5,243
  6,330
  7,543
  8,881
  10,344
  11,929
  13,633
  15,453
  17,386
  19,430
  21,582
  23,840
  26,204
  28,673
  31,248
  33,928
  36,716
  39,615
  42,628
  45,758
Issuance/(repayment) of debt, $m
  1,433
  4,338
  5,755
  7,425
  9,344
  11,495
  13,852
  16,380
  19,043
  21,801
  24,617
  27,458
  30,293
  33,098
  35,857
  38,559
  41,198
  43,774
  46,292
  48,761
  51,191
  53,597
  55,992
  58,394
  60,819
  63,283
  65,803
  68,396
  71,076
  73,861
  76,764
Issuance/(repurchase) of shares, $m
  1,572
  2,764
  3,462
  4,252
  5,125
  6,057
  7,024
  7,994
  8,936
  9,821
  10,621
  10,719
  11,281
  11,699
  11,964
  12,072
  12,021
  11,815
  11,459
  10,961
  10,330
  9,576
  8,710
  7,743
  6,683
  5,542
  4,326
  3,045
  1,705
  311
  0
Cash from financing (excl. dividends), $m  
  1,778
  7,102
  9,217
  11,677
  14,469
  17,552
  20,876
  24,374
  27,979
  31,622
  35,238
  38,177
  41,574
  44,797
  47,821
  50,631
  53,219
  55,589
  57,751
  59,722
  61,521
  63,173
  64,702
  66,137
  67,502
  68,825
  70,129
  71,441
  72,781
  74,172
  76,764
Total cash flow (excl. dividends), $m
  -113
  7,668
  9,912
  12,552
  15,587
  18,988
  22,714
  26,713
  30,923
  35,285
  39,739
  43,420
  47,903
  52,340
  56,703
  60,975
  65,148
  69,222
  73,204
  77,108
  80,951
  84,755
  88,543
  92,341
  96,176
  100,072
  104,058
  108,157
  112,397
  116,800
  122,522
Retained Cash Flow (-), $m
  -3,904
  -3,012
  -3,999
  -5,160
  -6,493
  -7,988
  -9,626
  -11,383
  -13,233
  -15,150
  -17,107
  -19,081
  -21,051
  -23,000
  -24,918
  -26,795
  -28,629
  -30,419
  -32,169
  -33,885
  -35,573
  -37,245
  -38,910
  -40,579
  -42,264
  -43,976
  -45,728
  -47,529
  -49,392
  -51,327
  -53,345
Prev. year cash balance distribution, $m
 
  3,712
  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
 
  8,368
  5,912
  7,392
  9,093
  11,000
  13,089
  15,330
  17,690
  20,135
  22,632
  24,339
  26,852
  29,339
  31,785
  34,180
  36,519
  38,803
  41,035
  43,223
  45,377
  47,510
  49,633
  51,762
  53,912
  56,096
  58,330
  60,628
  63,004
  65,473
  69,177
Discount rate, %
 
  5.20
  5.46
  5.73
  6.02
  6.32
  6.64
  6.97
  7.32
  7.68
  8.07
  8.47
  8.89
  9.34
  9.81
  10.30
  10.81
  11.35
  11.92
  12.51
  13.14
  13.80
  14.49
  15.21
  15.97
  16.77
  17.61
  18.49
  19.41
  20.38
  21.40
PV of cash for distribution, $m
 
  7,955
  5,316
  6,254
  7,197
  8,097
  8,901
  9,566
  10,055
  10,343
  10,418
  9,952
  9,659
  9,192
  8,580
  7,860
  7,067
  6,238
  5,407
  4,600
  3,842
  3,148
  2,530
  1,994
  1,539
  1,163
  860
  621
  438
  302
  206
Current shareholders' claim on cash, %
  100
  84.0
  72.2
  63.2
  56.3
  50.7
  46.3
  42.6
  39.7
  37.2
  35.1
  33.5
  32.1
  30.9
  29.9
  29.1
  28.4
  27.7
  27.2
  26.8
  26.4
  26.1
  25.9
  25.7
  25.5
  25.4
  25.3
  25.2
  25.2
  25.2
  25.2

Ctrip.com International, Ltd. (Ctrip) is a travel service provider for accommodation reservation, transportation ticketing, packaged tours and corporate travel management in China. The Company aggregates hotel and transportation information to enable business and leisure travelers to make bookings. It helps leisure travelers book tour packages and guided tours, and helps corporate clients manage their travel requirements. In addition, it offers a range of other travel-related services, including travelers' reviews, attraction tickets, travel-related financing and car services, and travel insurance and visa services to meet the various booking and travelling needs of both leisure and business travelers. It also offers independent leisure travelers bundled packaged-tour products, including group tours, semi-group tours and private tours or packaged tours with different transportation arrangements, such as cruise, bus or self-driving.

FINANCIAL RATIOS  of  Ctrip.com International ADR (CTRP)

Valuation Ratios
P/E Ratio -13.4
Price to Sales 1
Price to Book 0.3
Price to Tangible Book
Price to Cash Flow 3.6
Price to Free Cash Flow 4.2
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. -2.5%
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 $2782 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 45.5% 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 5.2%, 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 96.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 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 94.3%.

Life of production assets of 96 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 -52.2%. 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 - $10349 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 523.681 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 $22.7 billion.

RELATED COMPANIES Price Int.Val. Rating
PCLN Priceline Grou 1,723.72 2,134.46  hold
EXPE Expedia 118.69 502.66  str.buy
TZOO Travelzoo 6.05 3.49  str.sell
TOUR Tuniu ADR 7.52 1.25  str.sell
MMYT MakeMyTrip 29.65 7.20  str.sell
TRIP TripAdvisor 35.10 35.35  hold
CEA China Eastern 29.61 19.17  sell

COMPANY NEWS

▶ Ctrip and Big Bus Tours Signs Strategic Agreement   [Nov-26-17 10:53PM  PR Newswire]
▶ Despegar.com Has a Lot to Prove on Thursday   [Nov-14-17 01:36PM  Motley Fool]
▶ How the MeituanDianping Investment Could Help Priceline   [Nov-03-17 10:31AM  Market Realist]
▶ [$$] South Koreas Companies Eager for End to Costly Spat With China   [Nov-02-17 12:48AM  The Wall Street Journal]
▶ Ctrip.Com tops Street 3Q forecasts   [Nov-01-17 07:08PM  Associated Press]
▶ 3 Stocks That Look Just Like Priceline in 1999   [Oct-18-17 02:00PM  Motley Fool]
▶ Ctrip.com Trying To Close In On Key Technical Measure   [Oct-05-17 03:00AM  Investor's Business Daily]
▶ [$$] Ctrip Hits Turbulence Despite Chinas Travel Boom   [Oct-04-17 12:34AM  The Wall Street Journal]
▶ Expedias Valuation: Whats Priced In?   [07:36AM  Market Realist]
▶ Ctrip CEO Sun Calls BRICs Buying Power Significant   [Sep-04-17 07:26PM  Bloomberg Video]
▶ Ctrip.Com beats Street 2Q forecasts   [Aug-31-17 08:03PM  Associated Press]
▶ Could TripAdvisors Leverage Rise in 2017?   [Aug-10-17 05:05PM  Market Realist]
▶ Alibaba & Marriott Form JV To Tap Millions of Travelers   [Aug-07-17 09:16AM  Barrons.com]
▶ Why Pricelines Second-Quarter Margin Is Expected to Fall   [Aug-04-17 09:09AM  Market Realist]
▶ Chinese stocks are getting slammed   [Aug-02-17 12:17PM  Yahoo Finance]
▶ Baidu Shares Surging on a Big Second Quarter   [Jul-31-17 10:55AM  Investopedia]
▶ Alibaba Gets The Buzz, But This Other Chinese Stock May Take Off   [Jul-27-17 04:15PM  Investor's Business Daily]
▶ [$$] Alibaba, JD Battle Pressures Margins   [Jul-20-17 11:08AM  Barrons.com]
▶ Chinese Tourism Giant Ctrip Looks to Go Global   [Jun-14-17 12:56AM  The Wall Street Journal]
▶ Why These 4 Tech Stocks May Beat Apple, Facebook   [Jun-13-17 06:15PM  Investopedia]
▶ Chinese Tourism Giant Ctrip Looks to Go Global   [01:59PM  The Wall Street Journal]
▶ [$$] 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]
Financial statements 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.

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