Ctrip.com Destroyed on Downgrade; Stock Down 9%

Shares of Chinese ADR Ctrip.com

are getting hit very hard on Monday after analysts at Mirae Asset downgraded the stock from Buy to Hold and lowered their price target from $28.00 to $21.00. The analysts wrote that "During our recent trip to China China, we found that Qunar's decision to place wholesalers' hotel inventory online might pose a serious threat to CTRP's hotel commission. Most of these wholesalers function on a merchant model, buying hotel inventories at 4-5 star hotels at lowest prices for tourist groups. Leakage of wholesale hotel inventory to retail was a thing of the past and was easy to monitor because volume, mostly offline, was small and scattered. A weak economy, however, has prompted travel wholesalers to place a larger inventory online through Qunar and Taobao Travel. The volume is too big for CTRP to monitor, in our view." At last check, CTRP shares had lost 9% and were trading at $17.00. Volume has been heavier than usual with more than 2.3 million CTRP shares already trading hands on the session. Year-to-date, CTRP shares have lost roughly 27%. Ctrip.com International, Ltd. (Ctrip) is a travel service provider for hotel accommodations, airline tickets and packaged tours in China. Ctrip aggregates information on hotels and flights and enables its customers to make hotel and flight bookings.