Days Hao Capital Day Hao Capital released a research report today to maintain the art dragon holding rating

Summary: Check the latest quotes Beijing time, August 9 Morning news, Days Hao Capital released a study today, the Art Dragon (Nasdaq:long) stock rating maintained in the hold unchanged. The following is a summary of the report: Room overnight growth in the second quarter is stable; Check the latest quotes from the low-end hotels

Beijing time August 9 Morning news, Days Hao Capital released a research report today, the Art Dragon (Nasdaq:long) stock rating maintained in the "hold" unchanged.

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

In the second quarter, room overnight growth was stable; the rate of infiltration to low-end hotels was accelerated; maintain a "hold" rating

Yi Long 2014 in the second quarter of the fiscal year, but the third quarter revenue outlook slightly disappointing. In the second quarter, we are encouraged by the increase in the volume of business bookings for the Arts Dragon. We believe that the accelerated growth of the volume of business bookings and other performance improvements show that the hotel business is developing steadily.

At the same time, the Arts Dragon is continuing to expand low-end hotel business, including: 1 to provide consumers with more hotel products, such as pre-sale, flash purchase and last minute sales, 2 to the lack of it capacity of hotels to provide a free hotel PMS system. We believe that low-end hotel business may become the long-term growth impetus for the Arts dragon. However, because the competition situation is very variable, we expect the Arts dragon can not maintain the second quarter of earnings performance. Based on this, we maintain the stock rating of "holding" unchanged.

-There are many indications that the dragon business is developing steadily and that hotel bookings have increased in the second quarter to reverse the downward trend:

In the second quarter, there are many indications that the art Dragon Hotel business development and Stability: 1 Hotel guest room night growth rate accelerated to 44%, compared with the first quarter of 43%. Excluding the league to buy business, the hotel room night growth of 55%; 2 The second quarter of the Art Dragon Hotel guest room night reservation amount is equivalent to Ctrip (NASDAQ:CTRP) 54.1%, with the first quarter of the 54.5% roughly flat; 3 per room Night commission income declines also from the first quarter of year-on-year decline of 21% Fell back to 11%.

We believe that some of the driving forces for hotel business growth are driven by the Art Dragon's mobile strategy: 1 Mobile bookings in the second quarter of the art dragon in the total room overnight bookings accounted for more than 45%; 2 the cumulative download volume of Art Dragon mobile applications has exceeded 80 million.

-Low-end hotel market may become a long-term opportunity for the Arts Dragon:

According to Euromonitor, there were 313,926 tourist hotels in the Chinese market in 2012, including 27,359 chain hotels, 74,910 independent hotels and 211,657 other hotel chains.

The growing demand for leisure tourism has led to strong low-cost hotels and budget hotel needs, especially in areas close to popular tourist destinations. But most of the independent hotels and inns in the Chinese market are small, lacking IT infrastructure and online marketing capabilities. These hotels, we believe, offer opportunities for the Arts dragon and its peers because, as a whole, these hotels represent the majority of guest room nights in the Chinese market, especially when these hotels are transferred from offline to online in the future.

-In the second quarter, the Arts Dragon continued to expand its network coverage:

As of June 30, 2014, the Art Dragon Network has covered more than 120,000 domestic hotels, higher than the 100,000 as at March 31, 2014, more than 10,000 hotels are using the art Dragon free, cloud-based service based hotel inventory management system cloud shopkeeper and live Zhe (owned by its investors). The number of this type of hotel may increase to 200,000 by the end of 2014.

-second-quarter results were far more than expected; third-quarter outlook was slightly less than expected:

The Arts Dragon's total revenue in the second quarter was $50.4 million trillion, exceeding the average Wall Street analyst's forecast of $46.1 million trillion, earning $0.14 per share, and well above the average Wall Street analyst's expected $0.01 trillion. However, excluding any other operating income of RMB 30 million (related to the cooperation agreement between the city suspension and the art dragon), earnings per share were zero in the second quarter. The Arts Dragon expects total revenue in the third quarter to be $56 million to $61 million (up 10% to 20%), with a value of 59 million dollars, less than the average Wall Street analyst's forecast of 61.6 million dollars (up 19.3% per cent).

-Adjust Expectations:

After the Arts Dragon released its second-quarter earnings, we adjusted its performance expectations. We expect the Arts Dragon's total revenue in the third quarter to be $60.9 million trillion, higher than the previous forecast of $54.9 million trillion, and a loss of 0.06 dollars per share, compared with a forecast of $0.19 trillion. We expect the Art Dragon 2014 total revenue to be 208 million U.S. dollars, higher than the previous forecast of 188.3 million U.S. dollars, a share loss of 0.40 U.S. dollars, compared to the previous forecast of 0.49 U.S. dollars.

We also expect the Arts Dragon 2015 total revenue to be 251.3 million U.S. dollars, higher than the previous expected 225.9 million U.S. dollars, a loss of 0.33 U.S. dollars, compared to the previous forecast of 0.42 dollars.

Valuation：

We believe that in the near future, the Arts Dragon will not make any fundamental changes to its business priorities and continue to invest in its mobile hotel strategy and preferential opportunities. Therefore, we maintain the "holding" of its stock rating unchanged. (Tangfeng)