Dangdang profit in the first quarter of this year, net profit of 2 million yuan

Absrtact: May 16, Dangdang (New York Stock Exchange Securities Code: DANG) released its first-quarter earnings in 2014. Earnings show that Dangdang's first quarter total revenue growth of 30%, to 1.7 billion yuan (279.2 million U.S. dollars), very consistent with the

On May 16, Dangdang (NYSE: DANG) released its first-quarter earnings in 2014 in Thursday. The results showed that Dangdang's total revenue rose 30% in the first quarter to 1.7 billion yuan (USD 279.2 million), which is in line with the company's own expectations. It is worth mentioning that Dangdang achieved a profit in the first quarter of this year, net profit of 2 million yuan (about 300,000 U.S. dollars), and the same period last year or a big loss.

However, Dangdang's share price performance is not enough to curry favour with investors. Dangdang looks like a lame duck compared to a peer-only product. Only the goods will have just released the first quarter of this year's earnings. But unlike Dangdang, the revenue growth of the goods will be much better than analysts expect.

In recent days, investors have been more punishing Dangdang's share price than giving it credit. Dangdang's share price fell sharply in Thursday's conventional trading in the US stock market, but it rose sharply. For the first quarter of the results, only the target share price was raised, and Dangdang target share price was lowered.

Compared with the only products, Dangdang's user growth is difficult to impress people. In the first quarter of this year, Dangdang has about 8.6 million active users, an increase of 16%, the total order quantity of about 16.4 million, an increase of 11%. Only the first quarter of this year, the number of active users increased by about 1.6 times times, the number of orders increased by about 1.3 times times.

To be sure, Dangdang's first-quarter results also have some positive aspects, for example, the company's second-quarter revenue growth is expected to be more positive, and operating rates are expected to grow. Here are some comments by Morgan Stanley's three analysts on Dangdang. The analysts noted the following:

Dangdang expected the second quarter of 2014 total net revenue of about 1.942 billion yuan, an increase of about 30%, in part because the company benefited from the book issuance business value-added tax relief of 13%, Dangdang also estimated the second quarter total turnover (GMV) will increase 80%;

Dangdang's first-quarter gross margin was 18.2%, up from 17.6% in the previous quarter and 17.2% in the same period last year. Dangdang's gross margin growth in the first quarter was mainly due to the expansion of its own purchasing business and the growth of total market turnover.

Dangdang's total operating expenses rose 3% in the first quarter, while operating rates grew to 0.6% (0.4% in the previous quarter and 6% in the same period last year), performance spending fell by 400 basis points to 9.8% per cent in revenue, mainly due to improved warehousing operations and lower delivery costs.

However, Dangdang's revenue in the first quarter of this year did not meet Wall Street analysts ' expectations. Bank of America Merrill Lynch (Bofa-merrill) still downgraded its Dangdang stock rating from "buy" to "neutral". By contrast, Goldman Sachs raised its target share price from $185 to $202; Brean Capital also raised its target share price from $185 to $200; Piper Jaffray also bullish on the development potential of the only product, It said it would be the top discount retailer in the Chinese market.

Only in the first quarter of this year's total revenue growth of 126%, to 701.9 million U.S. dollars, much more than the industry analysts expected 658.9 million U.S. dollars, but also reached the company's own target ceiling. At the same time, it also set strong second-quarter earnings forecasts, with revenues expected to grow 123% per cent year-on-year, much better than industry analysts generally expect.

Deutsche Bank believes that only the first quarter revenue growth of 126%, mainly because the number of active users increased 1.6 times times and the total number of orders to increase 1.3 times times. Deutsche Bank also raised its target share price from 177 to $191.

Affected by the above factors, in Thursday, the U.S. stock market in the regular trading, Dangdang shares fell 1.67 U.S. dollars, closed at 9.87 U.S. dollars, a decrease of 14.47%, while the only stock price rose 14.46 U.S. dollars, closed at 164.46 U.S. dollars, or 9.64%.