Morgan Stanley maintains 58-City share-holding rating

The May 22 Evening News of Beijing Time, Morgan Stanley released its investment report today, maintaining 58 shares in the city (Nyse:wuba) rating.

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

The first quarter was strong: The total revenue was $48.2 million trillion, up 103% from 7% to 9% higher than we and Wall Street expected. Operating profit of 1.7 million dollars, 12% higher than our expectations. The net profit was $2.3 million, below our expected $3.5 million, mainly due to currency fluctuations.

Paid Member revenue acceleration: Member revenue of 27.5 million U.S. dollars, an increase of 85%, accounting for the total revenue of 57%. In the first quarter, a net increase of 48,000 paid members, the total number of members reached 441,000, the year-on-year growth of 77%.

The demand for online marketing services is strong: Online marketing services have a revenue of 20.5 million U.S. dollars, accounting for 43% of total revenue. The ratio in the previous quarter was 42%, a year earlier to 35%. The penetration rate of online marketing services continued to rise, with about 21% of the paid members subscribing to online marketing services in the first quarter of the year, up about 13% per cent year-on-year. Demand for real-time bidding services continued to grow, with revenues reaching more than 7 million U.S. dollars, accounting for about 15% of total revenue. In the fourth quarter last year, the ratio was 13%, a year earlier to 5%.

Profit margin: Operating profit margin in the first quarter was 4%, the chain fell 15%, mainly due to seasonal downturn, but better than the same year of 22%. Advertising spending of 12.6 million U.S. dollars, the chain growth of 91%, year-on-year growth of 121%, accounting for 26% of the total revenue.

Revenue forecasts for the second quarter: 58 The city expects revenue from the second quarter to reach $61 million to $63 million, an increase of 74% to 79% per cent, up from the previous forecast for a year-on-year increase of 66%.

Valuation: We continue to maintain the "hold-see" rating of 58 shares in the city.