Dahua Jixian: Upgrading the Ctrip Group-S (09961) target price to HK$508 to maintain a “buy” rating

The Zhitong Finance App learned that Dahua Jixian released a research report stating that the target price of Ctrip Group-S (09961) was raised to HK$508, maintaining a “buy” rating. Dahua Jixian pointed out that the State Administration of Market Supervision and Administration officially issued administrative penalties totaling RMB 5.18 billion, including confiscation of illegal proceeds of RMB 1.66 billion and fines of RMB 3.52 billion for acts involving Ctrip's alleged abuse of its dominant position in the market to implement exclusive cooperation and minimum price requirements. The bank believes that the penalty decision officially brought an end to the antitrust investigation and eliminated the core regulatory uncertainty surrounding the company.

The bank said that although compliance adjustments and related operational changes may disrupt domestic business in the short term, causing annual revenue growth to slow to 3% to 8% in the second quarter of 2026, considering that overseas business still maintained rapid growth of more than 30%, the overall impact on core profitability was relatively limited.

Dahua Jixian expects that with the completion of regulatory investigations and the release of risks, the company's valuation concessions will gradually narrow and usher in a revaluation. The new target price of HK$508 corresponds to a projected price-earnings ratio of 16.7 times in 2027, similar to global peers.

Management is relatively cautious about the performance guidelines for the second quarter of 2026: net revenue is expected to increase 3% to 8% year over year; accommodation reservation revenue is 8% to 13% year over year to 6.8 billion to 6.8 billion yuan to 6.8 billion yuan to 6.8 billion yuan; transportation ticket revenue fell 0% to 5% year over year to 5.2 billion yuan to 5.3 billion yuan, dragged down by 20% to 30% due to policy and value-added service adjustments; travel and vacation business grew 8% to 13% year over year, and business travel business increased 11% to 16% year over year, all of which remained resilient.