Downgrade the stock rating to Neutral

Goldman Sachs Gao today released a study that downgraded the Nyse:vips stock rating to "neutral" and raised its target share price to $185 trillion.

The following is the full report:

Event

Based on the recent acquisition of 80.75% per cent of the Lok Bee Net and the Better-than-expected results of the fourth quarter of 2013, we will increase the sales forecast for only 2014-2016 to 15% to 36%, and non-US general accounting standards will rise by 2% to 36% per share earnings forecasts. We will raise the 12-month target share price from USD 84 to $185 on the basis of a market-share growth ratio (PEG), which is equivalent to 50 times times the 2015 forward earnings ratio of 2014-2017, which is 1 time times the annual compound growth rate of earnings for the year, with the previous target price of 2014 forward earnings 2014-2016 Annual compound growth rate of earnings per share 1 time times.

Our new target share price is only 11% higher than the March 7 closing. Considering that there is not much room for the rise, we will downgrade the stock rating to "neutral". Since October 30, 2013, when we added the only product to the "buy" list, its share price has risen 147% per cent, while the standard and Poole 500 index has risen 6.5%.

Current point of view

1 considering the strong executive power and limited competition, we are still optimistic about the growth of the market share of the products. We expect the market share of China's apparel industry to rise from 1% in 2014 to 1.5% in 2016. We believe that the level of market share is reasonable given that the US discount retail giant TJX market share is about 5%.

2. The potential for new product categories will bring strong growth prospects. A the total number of active users of the product meeting reached 9.4 million in 2014, an increase of 129%. Although this is far below the Chinese online retail industry other companies (Dangdang 2013 20.9 million, Jingdong 2013 years ago 9 months 35.8 million), but we believe that only the 2017 active users will reach 30.3 million. (b) The recent acquisition of cosmetics electric Business Lok Bee Network opened a new growth area. We believe that this will bring synergies in 3 areas: cross-selling of complementary products, marketing, and integration of logistics systems.

3 The only product will be announced will issue 400 million U.S. dollars of convertible bonds and new shares, which the company will issue 1.14 million shares of ads through two shares (at the closing price of Friday to calculate the value of 190 million U.S. dollars). The proceeds will be used to buy the Lok Bee Network, a minority stake in the Oriental fashion, and build logistics capabilities.

4) valuation. With these considerations in mind, we expect the 2016 revenue to double to $6 billion trillion, and further increase to $9 billion in 2020. Referring to Amazon's valuation, we give only twice times the market rate, can calculate the only market value will reach the end of 2015 to 12 billion U.S. dollars, and 5 years later will reach 18 billion dollars.

Risk: The success or failure of integration, the change of market competition.