Case Study On Corporate Valuation In Ctrip Acquiring Elong

Online travel industry as a developed rapidly domain of fractionize of the Internet industry,the competition features of it are the price war and the deep participation of industrial capital in recent years.A large number of online travel agencies(OTAs)mergers and acquisitions appearing in the capital markets in recent years.The result of enterprise valuation provides reference for determination of the transaction price in the M&A activity.The development logic which expand market share by strategic losses,makes most target enterprises are losing money,independent market fair value often can't reflects the significance of M&A,therefore,in order to meet the needs of the Internet enterprise value evaluation of mergers and acquisitions,the strategic value of synergy effect should be considered on the basis of the theory of enterprise value.Ctrip and Elong are both representative of OTAs.This paper use case study on Ctrip strategic acquiring Elong as the entry point to research M&A valuation of Internet companies.By reading literature,works to get the past research content and information,using logical analysis methods of induction,classification to collate and summarize related theoretical results,provide important reference for the analytical framework,methods of this case.In the macro-economy which remained on a slow-growth path but will soon step into the high-speed steady growth,online travel industry is in a high-speed development period.Although Elong's revenue growth was slow and losses for years,Ctrip merger Elong also helps to strengthen the competitive advantages both of them and keeps Ctrip's dominant position in the online hotel booking market.This paper through building a financial model of target enterprise,combined with historical data,realistic environment and industry trends leads to forecast report.On the basis of data in the report,this paper integrated use the discounted cash flow valuation method that M&A synergy effect has been taken into account,the comparable company analysis method and precedent transactions analysis method to calculate Elong's value in the M&A activity.The steps of valuation has been summed up.Finally,the value ranges of Elong displayed in the football field graph,it is concluded that the target enterprise M&A valuation result calculated by use of discounted cash flow method is more rational.