I am initiating on Tuniu (NASDAQ:TOUR) with a DCF-backed target price of $34, implying 85% upside from Friday's close. TOUR is well positioned to be a key beneficiary of the secular growth story in China's booming outbound travel market. The company's niche focus on outbound packaged tours and offline integration allows it to deliver superior user experience, translating to repeat sales. Finally, as China's online travel market consolidates, TOUR stands out as an attractive takeover target for the larger players that are looking to upgrade their packaged tour business. My target price of $34, values TOUR at 1.7x FY15E P/S, on-par with Expedia (NASDAQ:EXPE) but at a discount to Ctrip (NASDAQ:CTRP) and eLong (NASDAQ:...
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