Day Hao Capital released an investment report today to maintain a good future stock holding rating

Summary: Check the latest quotes Beijing time October 24 Evening News, investment company Days Hao Capital (t.h.capital) today issued an investment report to maintain a good future stock (NYSE:XRS) hold a rating. The following is a summary of the contents of the report: Good future 2015 fiscal year second quarter to see the latest market

Beijing time October 24 Evening News, investment company Days Hao Capital (t.h.capital) issued an investment report today to maintain a good future stock (NYSE:XRS) "Hold" rating.

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

Good results in the second quarter of the next 2015 fiscal year mixed. Diluted earnings per share exceeded Wall Street's expectations, but revenues were lower than Wall Street's expectations. We believe that the results of the revenue show that the company's current business is mature. To restore revenue growth, there is no other way than to invest in new revenue sources. The potential area of investment may be to turn a good future into a O2O company's business. These investments help to ensure a good long-term future, but may have an impact on profitability. We believe that good future stocks have been fully valued and continue to maintain their "hold" ratings.

Investing in the revenue streams: in the second quarter, good future revenues grew 33.5% from a year earlier, down from 35.5% in the same period as on Wall Street forecasts. As for third-quarter revenue, the good future is expected to grow 31% to 34% year-on-year, below Wall Street's expected 50.4%. This result makes us think that the organic growth of the good future has reached its peak. To continue to increase revenue, only new investment. Potential areas include: 1 to expand new areas such as English and children, 2 to expand from Shanghai and Beijing to more cities, and 3 to invest in online and mobile services to develop O2O ecology.

Investment or impact on profitability: The good future has financed about $230 million trillion in May this year and has started to invest. These investments include: 1 Invest $25 million to U.S. higher education institutions Minerva Project, 2 23.5 million USD invest in Baby Tree website (www.babytree.com), 3 acquire domain name zuowen.com and kaoyan.com. All of these investments may contribute to a good future long-term growth that is not yet profitable. We believe that the good future will also invest in more O2O areas, which could affect profitability. So we expect a good 2015 fiscal year profit margin of 20.1%, 2016 fiscal year 19.5%, and 2014 fiscal year 20.6%.

Lower performance expectations: Based on the latest financial and operational situation in the future, we are expected to reduce the net revenue of fiscal year 2015 from USD 428.6 million to $424.9 million, and to reduce the net revenue forecast for 2016 fiscal year from 585.7 million US dollars to $539.1 million. Based on non-US GAAP, the projected earnings per share of fiscal year 2015 is expected to increase from USD 0.94 to $0.96, with the projected earnings per share of fiscal year 2016 reduced from 1.41 to 1.20 US dollars.

Second-quarter results: Net revenue of 122.4 million U.S. dollars, lower than Wall Street's expected $123.4 million trillion, slightly above our expected 121.6 million dollars. Based on non-US GAAP, the earnings per share is $0.39 trillion, above Wall Street's projected $0.35 trillion and our expected $0.33 trillion. This is mainly due to the growth of enrollment and the stability of average sales price.

Third-quarter results expected: Good future forecast, 2015 fiscal year in the third quarter net revenue will reach 96.3 million U.S. dollars to 98.5 million U.S. dollars, the year-on-year growth of 31% to 34%. The slowdown was due to the impact of the APEC meeting in early November. Due to traffic control, a good future will be 7 days holiday.

Valuation: We continue to maintain a "hold" rating for the future stock. (Li Ming)