UPDATE: Aegis Downgrades Ctrip.com On Limited Upside Potential

In a note issued Friday morning, Aegis Capital downgraded

due to competitive risk along with declining profitability. Aegis Capital mentions that CTrip.com is in a heavy investment phase: “Ctrip has adopted the strategy of investing heavily in product development and marketing so as to grab as much market share as possible. Ctrip has also made strategic investments to turn competitors focusing on specific travel segments into collaborators, such as the investment in Tongcheng (LY.com and 17U.com) and the investment in Tuniu." Aegis Capital also mentioned that CTrip.com will remain a viable company in the Chinese booking space, but lowered its rating from Buy to Hold due to limited upside: “Our comparable universe analysis currently yields a $9.8 billion enterprise value for Ctrip, which translates into $66.00 per ADS. We believe the current share price reflects the intrinsic potential and risk of the firm and approximates a fair valuation.” Ctrip.com traded recently at $61.89, down 3.3 percent.