First Shanghai Securities·2026-01-20 10:31Company Analysis - Ctrip Group (TCOM) maintains a strong competitive position in the Chinese travel industry despite facing an antitrust investigation, with a buy rating and a target price of HKD 85.00, reflecting a 31% increase from the previous target of HKD 65.00[6][3]. - The projected EPS for 2025 is HKD 47.20, a 68% increase from the previous estimate of HKD 28.10, while the 2026 EPS is expected to decrease by 7% to HKD 29.70[3]. Regulatory Impact - The potential fine for Ctrip, based on historical penalties for similar companies like Alibaba and Meituan, could range from HKD 1.8 billion to HKD 2.5 billion, representing approximately 10%-14% of the estimated annual profit for 2025[8]. - The investigation is expected to lead to regulatory changes focusing on eliminating exclusive agreements and promoting fair competition, which may shift the industry from price competition to service competition[8]. Financial Projections - Ctrip's non-GAAP net profit forecasts for 2025, 2026, and 2027 are projected at HKD 16.89 billion, HKD 19.84 billion, and HKD 23.14 billion respectively, indicating a steady growth trajectory[9][12]. - The company's revenue is expected to grow from HKD 61.97 billion in 2025 to HKD 79.92 billion by 2027, with a compound annual growth rate (CAGR) of approximately 13.1%[12]. Market Sentiment - The current market price of Ctrip shares corresponds to a P/E ratio of approximately 14.5, which is considered low compared to historical valuations, suggesting that the market may be overreacting to the investigation[9]. - The anticipated recovery in domestic outbound tourism and Ctrip's strong penetration in overseas markets are expected to provide a favorable environment for growth[9].