Days Hao capital maintenance Art Dragon stock holding rating

Beijing time November 15 Evening news, investment company Days Hao Capital (t.h.capital) issued an investment report today to maintain the Art Dragon stock (Nasdaq:long) "Hold" rating.

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

Arts Dragon's third-quarter revenue exceeded Wall Street's expectations, but earnings per share were lower than Wall Street's expectations, mainly due to investment in mobile hotel business. As the scale of investment will continue in the short term, we think the art Dragon profit margin has not rebounded recently. Art Dragon also has to invest in mobile business, but because of fierce competition in the market, whether the return on investment is still uncertain. To this end, we continue to maintain the "holding" rating of its stock.

Investment movement is necessary: the third quarter, the operation of the Arts Dragon operating loss of 9.5 million U.S. dollars, this is the fifth consecutive quarterly losses. It was not because of the first market shift that led to the loss of the Arts dragon, which had happened once in 2007 to 2009. At that time, Yi Long was transferring to the online hotel reservation. The effect was significant: online bookings accounted for only 17% per cent of total bookings in the first quarter of 2008, compared with 80% in the first quarter of this year. At the same time, market share has greatly increased. This time, the transfer from the PC to the mobile platform may be faster than the previous one. If the move does not invest in the mobile business, it may lose the share that was won in the hotel reservation market. Therefore, the investment of art dragon is necessary.

Success is still unknown: So far, art dragon Investment has received positive results. In the third quarter, hotel bookings through art Dragon mobile apps and mobile sites accounted for 25% of total hotel bookings, compared with 10% in the fourth quarter last year. The investment quarter will continue, and may continue into the next few quarters, the company's management said. Because of the fierce market competition, it is still difficult to determine whether the Arts dragon can obtain investment returns. In addition, the arts Dragon also faces other uncertainties, such as user behavior, new product development and sales and marketing environment.

The quarter's FORECAST: Art Dragon expects total revenue to reach $43.2 million trillion to $46.8 million trillion in the fourth quarter, up 20% to 30% per cent year-on-year, below Wall Street's expected $50.27 million trillion. There are two reasons for the low guideline expectations: 1 A one-time adjustment in the fourth quarter of last year led to a higher base and 2 higher coupon usage rates.

Third-quarter results: Total revenue of 48.5 million U.S. dollars, slightly higher than Wall Street's expected $48.09 million trillion, reached the company's guiding expectations of the ceiling. The loss of $0.24 per share was less than $0.13 trillion per share of Wall Street's expected deficit. The hotel's commission revenue grew 63% from a year earlier, mainly thanks to a 68% per cent increase in bookings. Ticket Booking commission revenue is flat. Gross profit margin of 75%, the same period of 70%. Operating profit margin of 19.5%, the second quarter of this year-20.4%, a year ago, 28.5%.

Adjustment of performance expectations: We will be the Arts Dragon quarter revenue forecast from 50.4 million U.S. dollars to 47 million U.S. dollars, the diluted loss of each share is expected to be adjusted from 0.07 U.S. dollars to 0.10 U.S. dollars. For the entire 2013 fiscal year, we have revised our revenue forecasts from $176.1 million to $177.5 million, and the projected loss per share is expected to be adjusted from $0.40 to $0.68. As for fiscal year 2014, we have reduced our revenue forecast from $243.8 million to $235.5 million, and the projected loss per share is expected to be adjusted from $0.32 to $0.23.

Valuation: We continue to maintain the "hold" rating of the Art Dragon stock.