Merrill Lynch to buy rating target price up to 158 dollars

View the latest quotes

Beijing Time March 4 Evening News, BofA Merrill Lynch today issued an investment report to maintain the only stock (nyse:vips) "Buy" rating, the target price to increase to 158 U.S. dollars.

The following is a summary of the contents of the report:

Thanks to better branding and operational leverage, the only product will give a strong first-quarter performance forecast for fiscal year 2014 and a profit margin boost. In terms of revenue, we expect that the number of active users will grow by 10% in the 2014 fiscal year, supporting about 80% per cent of revenue gains.

In addition, we expect the net profit margin to increase by 90 basis points to 3.9% this year, mainly thanks to: 1 Gross profit margin will be increased by 60 basis points, mainly because the product portfolio tends to more well-known brands, including leading sports brands, international brands and local online clothing brands. 2 operating leverage on performance costs. We estimate that this year's performance costs accounted for 11% of total revenue, compared with 11.6% last year. But the optimization of product mix and operation leverage will be offset to some extent by the loss of the Le Bee net.

Adjustment of performance expectations: Based on the strong fiscal year 2013, we will be the only products in the fiscal year 2014 and 2015 fiscal year for each share of diluted earnings expected to increase by 9% and 10% respectively.

Valuation: We continue to maintain the only stock "buy" rating, the target price to increase to 158 U.S. dollars.