Citigroup: Raises Ctrip's target price to $78, strong demand for leisure travel.

Citi released a report stating that Ctrip's first quarter revenue still met expectations, increasing by 16% year-on-year to 13.8 billion yuan, benefiting from steady growth in domestic hotels and outbound tourism, as well as strong momentum from Trip.com. In the second quarter of this year, the base of hotel stays may slightly increase for the remaining time this year, while the average daily room rates have shown improvement since May, with domestic revenue expected to achieve a 9% year-on-year growth; for outbound tourism, the booking volume during the Labor Day period has grown steadily, with revenue expected to increase by 15%. Citi predicts Ctrip's operating profit margins for the second quarter and full year of 29.2% and 28.4% respectively, also believing that there is significant upside potential in their own estimates as Ctrip continues to assess the return on their investments. With the resilient performance of the tourism industry and Ctrip's relative attractiveness in the Internet sector, Citi has slightly increased its profit forecast for Ctrip in 2025 to 2027 by 1%, raising the target price from $75 to $78 and maintaining a "buy" rating.