Intrinsic value of Ctrip.com International ADR - CTRP

Previous Close

$38.45

  Intrinsic Value

$109.13

stock screener

  Rating & Target

str. buy

+184%

Previous close

$38.45

 
Intrinsic value

$109.13

 
Up/down potential

+184%

 
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 2.3

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   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, %
  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
  4,430
  6,845
  10,237
  14,853
  20,955
  28,809
  38,670
  50,776
  65,336
  82,525
  102,477
  125,288
  151,014
  179,677
  211,268
  245,755
  283,089
  323,210
  366,052
  411,551
  459,648
  510,292
  563,446
  619,084
  677,198
  737,797
  800,905
  866,565
  934,836
  1,005,796
Variable operating expenses, $m
  3,670
  5,121
  7,159
  9,932
  13,598
  18,316
  24,241
  31,514
  40,262
  50,588
  61,567
  75,271
  90,727
  107,948
  126,927
  147,647
  170,077
  194,181
  219,920
  247,256
  276,152
  306,578
  338,512
  371,939
  406,853
  443,260
  481,175
  520,623
  561,640
  604,271
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
  3,670
  5,121
  7,159
  9,932
  13,598
  18,316
  24,241
  31,514
  40,262
  50,588
  61,567
  75,271
  90,727
  107,948
  126,927
  147,647
  170,077
  194,181
  219,920
  247,256
  276,152
  306,578
  338,512
  371,939
  406,853
  443,260
  481,175
  520,623
  561,640
  604,271
Operating income, $m
  760
  1,724
  3,078
  4,921
  7,357
  10,492
  14,429
  19,262
  25,074
  31,936
  40,910
  50,016
  60,286
  71,729
  84,340
  98,108
  113,012
  129,029
  146,132
  164,296
  183,497
  203,714
  224,934
  247,145
  270,345
  294,536
  319,730
  345,942
  373,197
  401,525
EBITDA, $m
  3,409
  5,267
  7,876
  11,428
  16,123
  22,166
  29,753
  39,067
  50,270
  63,495
  78,847
  96,398
  116,192
  138,245
  162,552
  189,087
  217,812
  248,681
  281,645
  316,652
  353,658
  392,624
  433,521
  476,330
  521,044
  567,669
  616,225
  666,744
  719,273
  773,870
Interest expense (income), $m
  86
  292
  594
  1,034
  1,651
  2,492
  3,603
  5,033
  6,829
  9,034
  11,685
  14,815
  18,449
  22,602
  27,287
  32,507
  38,260
  44,540
  51,338
  58,645
  66,446
  74,732
  83,490
  92,713
  102,392
  112,524
  123,107
  134,142
  145,634
  157,591
  170,023
Earnings before tax, $m
  468
  1,130
  2,044
  3,270
  4,865
  6,889
  9,395
  12,433
  16,041
  20,251
  26,095
  31,568
  37,684
  44,442
  51,834
  59,849
  68,472
  77,690
  87,487
  97,850
  108,765
  120,224
  132,221
  144,753
  157,821
  171,430
  185,588
  200,308
  215,606
  231,502
Tax expense, $m
  126
  305
  552
  883
  1,314
  1,860
  2,537
  3,357
  4,331
  5,468
  7,046
  8,523
  10,175
  11,999
  13,995
  16,159
  18,488
  20,976
  23,622
  26,419
  29,367
  32,460
  35,700
  39,083
  42,612
  46,286
  50,109
  54,083
  58,214
  62,505
Net income, $m
  342
  825
  1,492
  2,387
  3,551
  5,029
  6,859
  9,076
  11,710
  14,783
  19,049
  23,044
  27,509
  32,442
  37,839
  43,689
  49,985
  56,714
  63,866
  71,430
  79,398
  87,764
  96,521
  105,670
  115,209
  125,144
  135,479
  146,225
  157,393
  168,996

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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 assets, $m
  32,339
  49,963
  74,720
  108,415
  152,958
  210,282
  282,260
  370,625
  476,904
  602,369
  748,006
  914,509
  1,102,290
  1,311,508
  1,542,100
  1,793,833
  2,066,345
  2,359,197
  2,671,913
  3,004,024
  3,355,096
  3,724,762
  4,112,742
  4,518,859
  4,943,051
  5,385,377
  5,846,021
  6,325,291
  6,823,624
  7,341,576
Adjusted assets (=assets-cash), $m
  32,339
  49,963
  74,720
  108,415
  152,958
  210,282
  282,260
  370,625
  476,904
  602,369
  748,006
  914,509
  1,102,290
  1,311,508
  1,542,100
  1,793,833
  2,066,345
  2,359,197
  2,671,913
  3,004,024
  3,355,096
  3,724,762
  4,112,742
  4,518,859
  4,943,051
  5,385,377
  5,846,021
  6,325,291
  6,823,624
  7,341,576
Revenue / Adjusted assets
  0.137
  0.137
  0.137
  0.137
  0.137
  0.137
  0.137
  0.137
  0.137
  0.137
  0.137
  0.137
  0.137
  0.137
  0.137
  0.137
  0.137
  0.137
  0.137
  0.137
  0.137
  0.137
  0.137
  0.137
  0.137
  0.137
  0.137
  0.137
  0.137
  0.137
Average production assets, $m
  16,401
  25,340
  37,896
  54,985
  77,576
  106,650
  143,155
  187,971
  241,874
  305,506
  379,369
  463,815
  559,053
  665,163
  782,113
  909,786
  1,047,997
  1,196,523
  1,355,125
  1,523,563
  1,701,617
  1,889,102
  2,085,876
  2,291,848
  2,506,987
  2,731,323
  2,964,950
  3,208,023
  3,460,765
  3,723,456
Working capital, $m
  -4,413
  -6,818
  -10,196
  -14,793
  -20,871
  -28,693
  -38,515
  -50,573
  -65,075
  -82,194
  -102,067
  -124,787
  -150,410
  -178,958
  -210,423
  -244,772
  -281,957
  -321,917
  -364,588
  -409,905
  -457,810
  -508,251
  -561,192
  -616,607
  -674,489
  -734,846
  -797,701
  -863,099
  -931,097
  -1,001,773
Total debt, $m
  11,002
  19,144
  30,582
  46,149
  66,728
  93,211
  126,465
  167,290
  216,391
  274,356
  341,640
  418,564
  505,319
  601,978
  708,511
  824,812
  950,713
  1,086,010
  1,230,485
  1,383,920
  1,546,115
  1,716,901
  1,896,148
  2,083,774
  2,279,751
  2,484,105
  2,696,923
  2,918,346
  3,148,575
  3,387,869
Total liabilities, $m
  14,940
  23,083
  34,521
  50,088
  70,667
  97,150
  130,404
  171,229
  220,330
  278,295
  345,579
  422,503
  509,258
  605,917
  712,450
  828,751
  954,652
  1,089,949
  1,234,424
  1,387,859
  1,550,054
  1,720,840
  1,900,087
  2,087,713
  2,283,690
  2,488,044
  2,700,862
  2,922,285
  3,152,514
  3,391,808
Total equity, $m
  17,398
  26,880
  40,199
  58,327
  82,291
  113,132
  151,856
  199,396
  256,575
  324,075
  402,427
  492,006
  593,032
  705,591
  829,650
  965,082
  1,111,694
  1,269,248
  1,437,489
  1,616,165
  1,805,041
  2,003,922
  2,212,655
  2,431,146
  2,659,362
  2,897,333
  3,145,159
  3,403,007
  3,671,110
  3,949,768
Total liabilities and equity, $m
  32,338
  49,963
  74,720
  108,415
  152,958
  210,282
  282,260
  370,625
  476,905
  602,370
  748,006
  914,509
  1,102,290
  1,311,508
  1,542,100
  1,793,833
  2,066,346
  2,359,197
  2,671,913
  3,004,024
  3,355,095
  3,724,762
  4,112,742
  4,518,859
  4,943,052
  5,385,377
  5,846,021
  6,325,292
  6,823,624
  7,341,576
Debt-to-equity ratio
  0.630
  0.710
  0.760
  0.790
  0.810
  0.820
  0.830
  0.840
  0.840
  0.850
  0.850
  0.850
  0.850
  0.850
  0.850
  0.850
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
Adjusted equity ratio
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  342
  825
  1,492
  2,387
  3,551
  5,029
  6,859
  9,076
  11,710
  14,783
  19,049
  23,044
  27,509
  32,442
  37,839
  43,689
  49,985
  56,714
  63,866
  71,430
  79,398
  87,764
  96,521
  105,670
  115,209
  125,144
  135,479
  146,225
  157,393
  168,996
Depreciation, amort., depletion, $m
  2,649
  3,543
  4,798
  6,507
  8,766
  11,673
  15,324
  19,806
  25,196
  31,559
  37,937
  46,382
  55,905
  66,516
  78,211
  90,979
  104,800
  119,652
  135,513
  152,356
  170,162
  188,910
  208,588
  229,185
  250,699
  273,132
  296,495
  320,802
  346,076
  372,346
Funds from operations, $m
  2,990
  4,367
  6,290
  8,894
  12,318
  16,702
  22,183
  28,881
  36,906
  46,342
  56,986
  69,426
  83,415
  98,959
  116,050
  134,668
  154,785
  176,366
  199,378
  223,786
  249,560
  276,674
  305,109
  334,854
  365,908
  398,276
  431,974
  467,027
  503,469
  541,342
Change in working capital, $m
  -1,655
  -2,405
  -3,378
  -4,598
  -6,078
  -7,822
  -9,822
  -12,058
  -14,502
  -17,120
  -19,872
  -22,720
  -25,623
  -28,548
  -31,465
  -34,349
  -37,185
  -39,960
  -42,671
  -45,317
  -47,904
  -50,442
  -52,941
  -55,416
  -57,882
  -60,356
  -62,856
  -65,397
  -67,998
  -70,676
Cash from operations, $m
  4,645
  6,772
  9,669
  13,492
  18,396
  24,524
  32,004
  40,939
  51,408
  63,462
  76,858
  92,146
  109,038
  127,507
  147,515
  169,017
  191,969
  216,327
  242,049
  269,104
  297,465
  327,115
  358,050
  390,270
  423,790
  458,632
  494,830
  532,425
  571,467
  612,017
Maintenance CAPEX, $m
  -1,025
  -1,640
  -2,534
  -3,790
  -5,499
  -7,758
  -10,665
  -14,315
  -18,797
  -24,187
  -30,551
  -37,937
  -46,382
  -55,905
  -66,516
  -78,211
  -90,979
  -104,800
  -119,652
  -135,513
  -152,356
  -170,162
  -188,910
  -208,588
  -229,185
  -250,699
  -273,132
  -296,495
  -320,802
  -346,076
New CAPEX, $m
  -6,153
  -8,939
  -12,556
  -17,089
  -22,591
  -29,073
  -36,505
  -44,817
  -53,902
  -63,632
  -73,863
  -84,446
  -95,238
  -106,110
  -116,950
  -127,672
  -138,211
  -148,527
  -158,602
  -168,438
  -178,054
  -187,485
  -196,773
  -205,972
  -215,139
  -224,336
  -233,626
  -243,074
  -252,741
  -262,692
Cash from investing activities, $m
  -7,178
  -10,579
  -15,090
  -20,879
  -28,090
  -36,831
  -47,170
  -59,132
  -72,699
  -87,819
  -104,414
  -122,383
  -141,620
  -162,015
  -183,466
  -205,883
  -229,190
  -253,327
  -278,254
  -303,951
  -330,410
  -357,647
  -385,683
  -414,560
  -444,324
  -475,035
  -506,758
  -539,569
  -573,543
  -608,768
Free cash flow, $m
  -2,533
  -3,807
  -5,421
  -7,387
  -9,694
  -12,307
  -15,166
  -18,193
  -21,292
  -24,357
  -27,555
  -30,237
  -32,582
  -34,508
  -35,952
  -36,866
  -37,220
  -37,000
  -36,205
  -34,847
  -32,946
  -30,531
  -27,634
  -24,290
  -20,534
  -16,402
  -11,929
  -7,144
  -2,076
  3,249
Issuance/(repayment) of debt, $m
  5,596
  8,143
  11,438
  15,567
  20,579
  26,484
  33,254
  40,825
  49,101
  57,965
  67,284
  76,924
  86,755
  96,659
  106,534
  116,300
  125,901
  135,298
  144,475
  153,435
  162,195
  170,786
  179,247
  187,626
  195,977
  204,355
  212,817
  221,423
  230,230
  239,294
Issuance/(repurchase) of shares, $m
  6,182
  8,657
  11,827
  15,741
  20,413
  25,811
  31,865
  38,465
  45,469
  52,717
  59,303
  66,534
  73,517
  80,117
  86,220
  91,743
  96,627
  100,840
  104,376
  107,245
  109,478
  111,117
  112,212
  112,822
  113,006
  112,827
  112,347
  111,622
  110,710
  109,662
Cash from financing (excl. dividends), $m  
  11,778
  16,800
  23,265
  31,308
  40,992
  52,295
  65,119
  79,290
  94,570
  110,682
  126,587
  143,458
  160,272
  176,776
  192,754
  208,043
  222,528
  236,138
  248,851
  260,680
  271,673
  281,903
  291,459
  300,448
  308,983
  317,182
  325,164
  333,045
  340,940
  348,956
Total cash flow (excl. dividends), $m
  9,246
  12,993
  17,843
  23,921
  31,297
  39,989
  49,953
  61,096
  73,278
  86,324
  99,032
  113,221
  127,691
  142,267
  156,802
  171,177
  185,307
  199,138
  212,646
  225,834
  238,727
  251,371
  263,825
  276,158
  288,449
  300,780
  313,235
  325,902
  338,864
  352,205
Retained Cash Flow (-), $m
  -6,524
  -9,482
  -13,319
  -18,128
  -23,964
  -30,840
  -38,724
  -47,540
  -57,178
  -67,500
  -78,353
  -89,579
  -101,027
  -112,559
  -124,059
  -135,432
  -146,612
  -157,554
  -168,241
  -178,675
  -188,877
  -198,880
  -208,733
  -218,491
  -228,215
  -237,971
  -247,826
  -257,848
  -268,103
  -278,658
Prev. year cash balance distribution, $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 flow adjustment, $m
  512
  820
  1,266
  1,894
  2,748
  3,877
  5,330
  7,154
  9,393
  12,087
  15,267
  18,958
  23,178
  27,938
  33,240
  39,085
  45,465
  52,372
  59,794
  67,720
  76,137
  85,035
  94,404
  104,237
  114,530
  125,282
  136,492
  148,167
  160,315
  172,945
Cash available for distribution, $m
  2,722
  3,511
  4,524
  5,793
  7,333
  9,148
  11,229
  13,556
  16,100
  18,824
  20,680
  23,643
  26,664
  29,708
  32,743
  35,745
  38,695
  41,584
  44,404
  47,158
  49,851
  52,491
  55,091
  57,667
  60,233
  62,808
  65,409
  68,054
  70,761
  73,547
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  2,609
  3,214
  3,937
  4,770
  5,684
  6,639
  7,586
  8,473
  9,248
  9,869
  9,821
  10,089
  10,138
  9,973
  9,613
  9,084
  8,419
  7,658
  6,837
  5,992
  5,156
  4,355
  3,611
  2,937
  2,343
  1,832
  1,404
  1,053
  772
  554
Current shareholders' claim on cash, %
  55.2
  32.3
  19.8
  12.7
  8.5
  5.8
  4.2
  3.1
  2.3
  1.8
  1.4
  1.1
  0.9
  0.8
  0.7
  0.6
  0.5
  0.5
  0.4
  0.4
  0.3
  0.3
  0.3
  0.3
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2

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 -11.9
Price to Sales 0.9
Price to Book 0.2
Price to Tangible Book
Price to Cash Flow 3.2
Price to Free Cash Flow 3.7
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 $2769 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 4.3%, 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 96.5%.

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 5.4% 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 18.5%.

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 370.2%.

Life of production assets of 10 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 -99.6%. 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 - $10874 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 59 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 $2.3 billion.

RELATED COMPANIES Price Int.Val. Rating
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MMYT MakeMyTrip 29.95 1.39  str.sell
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COMPANY NEWS

▶ 3 Largest Public Travel Companies By Market Share   [Aug-16-18 11:20AM  Benzinga]
▶ Chinese Stocks: Are They Finally Cheap?   [11:57AM  InvestorPlace]
▶ Trump targets China with another $200 billion in tariffs   [Jul-11-18 01:14PM  Yahoo Finance Video]
▶ Ctrip signs MOU with Tourism New Zealand   [04:49AM  GlobeNewswire]
▶ [$$] Ocean Link, Ctrip Increases Offer for eHI Car Services   [Jun-29-18 06:06PM  The Wall Street Journal]
▶ Ctrips First Oversea Gourmet List Ceremony held in Bangkok   [Jun-24-18 10:06PM  GlobeNewswire]
▶ iQIYI Announces Changes to Board Composition   [Jun-14-18 07:00AM  GlobeNewswire]
▶ Trip.com Hong Kong Launches Airport Transfer Car Service   [Jun-04-18 10:00PM  GlobeNewswire]
▶ [$$] Ctrip: booked up   [May-22-18 10:35PM  Financial Times]
▶ Ctrip.Com: 1Q Earnings Snapshot   [06:25PM  Associated Press]
▶ [$$] The Growth of the Chinese Travel Market   [May-21-18 09:46AM  The Wall Street Journal]
▶ [$$] The Growth of the Chinese Travel Market   [May-20-18 10:49PM  The Wall Street Journal]
▶ Ctrip Participates in Annual Travel Show 2018 ITB China   [May-18-18 06:10AM  GlobeNewswire]
▶ Ctrip teams with Hyatt to open its first flagship store   [May-17-18 09:00PM  GlobeNewswire]
▶ China's Ctrip invests in Boom Supersonic   [Apr-26-18 04:18AM  Flightglobal]
▶ Ctrip signs MOU with AccorHotels   [01:00AM  GlobeNewswire]
▶ Skyscanner adds train travel booking, starting in UK   [Apr-03-18 05:37AM  TechCrunch]
▶ Why Expedia Inc Stock Will Plunge Even Further Soon   [Mar-22-18 01:42PM  InvestorPlace]
▶ Royal Caribbean ends SkySea joint venture   [Mar-20-18 07:35AM  American City Business Journals]
▶ [$$] Ctrip's Smooth Ride Has Been Rudely Interrupted   [03:32AM  The Wall Street Journal]
▶ Ctrip.Com beats Street 4Q forecasts   [Mar-14-18 06:51PM  Associated Press]
▶ [$$] Tencent, Ctrip-Backed Travel Company Plans Hong Kong IPO   [Mar-09-18 12:36AM  The Wall Street Journal]
▶ Ctrip partners with Deutsche Bahn (German Railways)   [Mar-08-18 11:30AM  PR Newswire]
▶ Tech Investor Chase Coleman Goes Internet Shopping Again   [Mar-02-18 03:03PM  GuruFocus.com]
▶ When Should You Buy Ctripcom International Ltd. (NASDAQ:CTRP)?   [Feb-19-18 10:01AM  Simply Wall St.]
▶ Why Investors Need a Vacation From Expedia Inc Stock   [Feb-09-18 12:24PM  InvestorPlace]
▶ Ctrip partners with Korean National Rail Operator Korail   [Feb-08-18 12:30AM  PR Newswire]
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