The following is the main content of the report: Ctrip's revenue in Q4 2011 was 1% higher than our expectations and 5% higher than the market average expectations. However, its operating profit and net profit before equity incentives (calculated according to US Generally Accepted Accounting Principles) were respectively 6% and 15% lower than our expectations, and respectively 11% and 5% lower than the market average expectations. Ctrip's operating profit margin before equity incentives in Q4 dropped by 4.9 percentage points to 35%, due to a 1 percentage point drop in gross margin, a 1.7 percentage point increase in R&D expenses, a 1.9 percentage point increase in marketing expenditures, and a 0.5 percentage point increase in general and administrative expenses. Ctrip forecasted that the company's revenue in Q1 2012 would be relatively weak, with a year-on-year growth of 15% to 20%, and an operating profit margin before equity incentives of 27% to 28%. The operating profit margin for the whole year of 2012 would also be relatively low at 30%. Our investigation showed that one current discount offered by Ctrip accounted for 90% of hotel commission revenue, and the average proportion of various discounts in hotel commission revenue was 43%. This would lead to a 2.4 percentage point drop in gross margin in 2012, and the decline in profit margin might also be caused by investment. Although it seems difficult to estimate Ctrip's profit margin in 2012, we believe it has the potential for long-term sustainable growth. We have reduced Ctrip's target stock price from $31 to $26, and maintained its "hold" stock rating. The challenges highlighted in Ctrip's Q4 financial report include: 1) A severe business travel environment; 2) A shift in growth strategy towards leisure; 3) Increasing O2O (online-to-offline) challenges.